RE:RE:RE:RE:RE:RE:RE:RE:Strange trading last two days!No sir you are not thinking backwards which was kind of my point as to what management might be thinking also.
Of course management may be more concerned with the company's well being on the balance sheet as opposed to shareholder returns which would make bank debt the easy choice to pay down.
I saw 7.9% posted as the bank debt interest rate which at today's share price yield of 9.51% makes buy backs, management's best bang for their buck. To me it is like paying down debt too.
PAGE 8 of the Q2 ER
"Cardinal was in compliance with the terms of the Facilities at June 30, 2023. For the six months ended June 30, 2023, the effective interest rate on the Company's bank debt was 7.9% (2022 – 5.0%)."
https://cardinalenergy.ca/wp-content/uploads/2023/07/Q2-2023-FS-FINAL.pdf Jay I am not worried about the div at all as I stated in previous posts that I think management hit on that sweet spot of maximum sustainable shareholder returns while maintainling a healthy balance sheet and sufficient cap-ex funding. Net debt does include a lot of payables that incurr no interest charges as negotiated payment rates can include terms of credit anywhere between 30 and 180 days so yeah the longterm debt may be less. I know CVE has lower net debt due to their cash on hand as opposed to their longterm debt which happens in an extremely high cash flow business like theirs. Lastly, if it seems like I am whining here, I apologise. I do not mean to. I was just offering up ideas of who may have been behind the 600 000 share purchases that the OP had mentioned. Buybacks IMO is one justifiable explanation.
GLTY two and all.
NonCredibleSrc wrote: Does net debt mean anything without understanding the interest rate that is applied to that debt?
In my opinion, no.
Given today's prime rate, and the fact that CJ has not aquired any net-new debt over that last year or so, the interest rate that their debt is negotiated at is likely far less than the current 9.51% that they are paying shareholders. To my simple way of thinking, that would make share buy-backs the priority as it may better contribute to the bottom line moving forward.
Am I thinking backwards?