RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Renewables IPO Timing - August + $585 million to TWMI don't know that we're too far apart, I just don't think stock buybacks are the best use of discretionary cash outside of extraordinary circumstances. In hindsight, if the acquisition of PGR hadn't been so tragically timed, buying back TWM stock at a 7-10% yield and ridiculous EV/EBITDA multiple last year would have been an ideal use of debt.
Even KEY and PPL could have retired shares that cost them 10-15% in dividends. I did my own version of that, emptying my home equity line of credit into a margin account last March and buying 10k PPL and 10k KEY (and an embarrassing amount of TWM, though it wasn't and isn't marginable).
If they had credit availability then, in retrospect, it would have been an incredible time to reduce the share count. But they were already in a corner from PGR and to be fair, no one knew what was going to happen next.
Now though, at $1.38, they'd be retiring equity that costs them 3% and trades at roughly 6x EBITDA. Too cheap to sell, too expensive to buy back. The equity from LCFS is a clever trick if they pull it off, but they won't be conserving cash and buying back shares if history is any indication. An increased dividend would be nice: see what their plan is for the LCFS cash in a week.
For ~$3.5M/yr they could raise the dividend 25% to $0.05/yr and likely get some share price appreciation. For the same amount of cash they could retire about 2.5M shares, or 0.6% and accomplish very little, especially if the goal is to raise the price so they can sell more equity later.
Given the potential project backlog and their relative small size, a $30M project that returns $10M in cashflow a year is my preferred use of their cash. As debt drops from Pioneer and LCFS sales and new capital projects