That was not planned, but definitely pretty consistent between the two, north of 700,000 shares. The buyback was $126.7 million in the second quarter and $127.1 million in the first. Well, we’ve been, if nothing else, consistent. As pointed out on their most recent earnings call, the Board of Directors has authorized the repurchase of up to two million shares by Maand Executive Vice President and Chief Financial Officer Bret Eckert expects the pace of buybacks to continue. While the company does pay a small dividend, the overwhelming majority of the capital return is through buybacks. That's a 12% reduction in shares in a year. As of the June 2023 filing, they've reduced that number to 16.8 million. On the June 2022 filing, WIRE had 19.1 million shares outstanding. The tangible book value is $107.09 per share, with $39.80 being in cash and short-term investments and an additional $29.14 in receivables.įurther, they've been aggressively returning capital to shareholders. WIRE has an extremely strong balance sheet with no debt, and a current ratio of more than 8, so there are no concerns whatsoever in those areas. That gives it an attractive earnings yield of more than 17% and earnings growth over the last decade is impressive overall, but has not been consistent - which does lead to some concerns over whether or not this is a one-off as opposed to actual growth in the company. On a trailing 12 months basis, WIRE's earnings are $30.76 per share, which gives us a price-to-earnings ratio of 5.77 based on the closing price of $177.44 on September 20, 2023. Let's start off with the earnings, since any debate on Encore Wire is likely to hinge on whether earnings have peaked at what is going to be a unique all-time high due to the impact of inflation on spreads, are currently in a cyclical peak, or can continue growing. The result is an excellent opportunity for value investors to get a great price on a company that could have a significant growth runway in front of it. Demand for copper is expected to increase dramatically over the next decade due to its increased use in a transition to more renewable energy and an increase in the number of electric vehicles produced. Kulagina/iStock via Getty Images Encore Wire Investment ThesisĮncore Wire Corporation ( NASDAQ: WIRE) is a well-run business with a strong balance sheet that is underpriced due to being caught up in the crossfire of shorts betting on copper prices dropping in the short-term, which ignores the mid-term and long-term tailwinds for both copper and the business itself.
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