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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Carl Worth who wrote (24957)	10/10/2006 3:44:12 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78751

The buyback might not attract new buyers but maybe it has attracted old buyers like me. I would see the company as being worth more, and so with more confidence, I'd buy more stock. Putting in a dividend might attract more buyers, but it's a dinky company, and so it might still not be attractive to new people. Further if the dividend is seen as some return while waiting for some catalyst to jump up the stock price, maybe that catalyst comes quicker if the company has fewer shares and higher p/book. Not sure it makes much difference either way. Among all the value investors on this thread, I'm guessing if more aren't tempted to buy now, not many will be with a 3,4 or 5% div. on the stock. Jmo, I could be wrong. (And maybe all those other people who will avoid this stock regardless are right to be doing so.)

To: Carl Worth who wrote (24957)	10/10/2006 4:34:06 PM
From: MCsweet	Read Replies (1) \| Respond to of 78751

Carl, We can agree to disagree, but I'd like to make one last point. A high volume buyback, even if implemented over an extended time period, can have a tremendous impact on stock price for illiquid stocks. Just think supply and demand. If they have 500k shares to buy, with 1k average trading volume, the stock definitely has some room to run as supply dries up ;) I have experienced this before, and that is why I bought some of this dog. If the buyback is in addition accretive to book value, then it is a no-brainer and much preferred over dividends in my view. That being said, who knows when (and even if) they will start implementing the buyback. Best regards, MC