Tony, In my mind long-term stability would translate to a support from which the share price would grow somewhat parallel to that of earnings. Obviously, that is not the case (or at least, not the perception in the investment community w/ sellers exceeding buyers driving the price further down.
I'm looking at CHRB as more than just a potential takeover candidate. W/ earnings on the rise and the co. being in an enviable position w/in a country that has the potential in the short- or mid-term to experience the greatest economic growth in modern history, CHRB has a lot of appeal, IMO.
At the same time, if mgmt. looks at the big picture in a similar fashion, wouldn't one of the highest-yielding investments they could possibly make at this time be buying back some of the outstanding shares? Besides the obvious return they'd see when (if?) the stock takes off, if mgmt. reduces the number of o/s shares, wouldn't they also be increasing their control over the co.? Such a strategy would certainly benefit Everbright. If Everbright currently owns 40% of the co., for example, a buyback of 5% of the o/s shares now gives Everbright over 42%. Add this to the potential share price if the PE rises to a level one would expect for a co. of CHRB's characteristics, and Everbright stands to make out very well.
I don't begrudge Everbright anything at this point, as I'm thinking that what's in their interest is in ours and vice versa. Doing anything to enchance shareholder value would benefit us all.
I think Chris' idea of CHRB shareholders communicating our thoughts to mgmt. would drive home the point that it is our desire to see the co. succeed but not unduly at our expense. |
