February 8

3 Blue Chip Stocks with Significant Share Buybacks

Many stocks have reached record highs all around the world while some have been woefully left behind. Investors are generally piling into high growth technology stocks. Many stocks which are in the older industries and with strong fundamentals did not get the attention.

As a result, shrewd management of these stocks started share buybacks. Share buybacks are usually conducted as the management of these companies felt that the company’s shares are undervalued.

Here are 3 blue chip stocks that have been doing share buybacks that you should know.

Blue Chip Stock #1 – OUE Limited

OUE Limited manages commercial, retail and residential properties that are situated in prime locations, hotels that are found in gateway cities, as well as properties in the healthcare sector. It has also diversified into commercial, retail and residential developments, fund management businesses and, recently, healthcare.

As of its half-yearly report, OUE’s revenue decreased by 28% to $311.4 million. Its net profit clocked in a negative value which is due to a fair value paper loss of $305.7 million. Free cash flow came in at a healthy $52.5 million. Cash balance of the company was at a healthy and sustainable level of $297.4 million.

OUE started purchasing its shares from October 2020 onwards. Since October 2020 it has purchased a total of 18.95 million shares with a total transacted value of $22.26 million. Share prices bought back range from $1.14 – $1.21/share.

OUE last closed at $1.14 which values it at a dividend yield of 1.75%. P/E ratio is not a meaningful indicator since it had a net loss in the first half of the year.

Blue Chip Stock #2 – Yangzijiang Shipbuilding

Jiangsu Yangzijiang Shipbuilding Group Ltd. (YZJ) is a large enterprise group with shipbuilding and offshore as our core business, trade logistics, ship-leasing and real estate as supplementary business.

Yangzijiang has three large drydocks and three large and medium size slipways, with annual shipbuilding capacity of over 6 million deadweight tons.

As of its half-yearly report, YZJ’s revenue decreased by 38% to RMB 8.27 billion. Its net profit decreased by 33% to RMB 1.18 billion. Free cash flow came in at an extremely healthy level of RMB 688 million. As a result, cash balance of the company doubled to RMB 10.05 billion.

YZJ started purchasing its shares from August 2020 onwards. Since August 2020, it has purchased a total of 70.25 million shares with a total transacted value of $66.6 million. Share prices bought back range from $0.85 – $0.995/share.

YZJ last closed at $0.98 which values it at a P/E of 7.84 and a dividend yield of 4.57%.

Blue Chip Stock #3 – Jardine Matheson

Jardine Matheson (JMH) is a diversified Asian-based group operating principally in Greater China and Southeast Asia.

Across the Group, they have a wide range of businesses in major sectors including motor vehicles and related operations, property investment and development, food retailing, health and beauty, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining, energy and agribusiness.

As its latest half-yearly report, JMH’s revenue decreased by 21% to USD15.9 billion. Its net profit decreased by 49% to USD 373 million. Cash flow from operating activities came in at USD1.59 billion. Cash balance of the company was at a healthy and sustainable level of $7.5 billion.

JMH started purchasing its shares from January 2020 onwards. Since August 2020, it has purchased a total of 15.8 million shares with a total transacted value of USD 762.3 million. Share prices bought back range from USD 38.88 – USD 57.38/share.

JMH last closed at USD 57.80 which values it at a P/E of 5.53 and a dividend yield of 2.80%.

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Tags

blue chip stocks, jardine matheson, oue limited, share buybacks, undervalued stocks, yangzijiang


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