Don’t hold your breath

Finweek English Edition - - MARKETPLACE -

ELB Group is buy­ing back 9.9% of its shares at cur­rent mar­ket prices and will can­cel the shares af­ter the pur­chase, re­duc­ing the num­ber of shares in is­sue by al­most 10%. This means if you hold ELB shares your stake in the com­pany in­creases by a sim­i­lar amount. It’s a good deal as the ELB has a pile of cash that is equal to around 1 000c a share, so by buy­ing the shares at 1 737c it’s ef­fec­tively pay­ing just over 700c per share. Now, you could also buy these shares at an ef­fec­tive 700c in the mar­ket, but ELB Group is in a very tough sec­tor of the econ­omy. While I am watch­ing the stock, I ex­pect it to be a long wait be­fore this com­pany starts pump­ing prof­its again and be­comes a po­ten­tial in­vest­ment.

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