RE:The bleeding resumesWheresMeGold wrote: There likely won’t be any catalysts to stop the bleeding for weeks, if not months. As a shareholder, I hope Input is using these prices as an opportunity to fully utilize its buyback program to retire stock at a low price.
Two things could be done to stop the bleeding, although the chances of either happening is practically nil imo. One, Input could increase the amount of money available for stock buyback. The message of confidence this would bring would improve the stock price imo. Two, Input could double the dividend. Doing this would undoubtedly increase the stock price significantly.
Whether or not Input is financially in a position to do this or if making these moves would be the best use of capital is another story. I just believe these are likely the only moves available to turn the stock price around at the moment.
You know that buybacks are public information right? You don't have to hope and wonder if Input is buying back shares. Monday they bought back shares for the first time since May 31st, and the vast majority of buybacks have been at much higher prices. The buyback tap has essentially been shut off since the share price dropped below $1.30.
https://www.canadianinsider.com/node/7?menu_tickersearch=INP+%7C+Input+Capital
While you are looking at that link, you may also want to notice all of the insider selling. Input does a great job of proclaiming "Our management owns so many shares because they believe in the company!". The presentations seem to neglect when they sell shares though. I realize there are many reasons that a person may sell shares they like (want to diversify, big expenses coming up, etc), but they are standing here telling the market "Input is cheap, we believe in it and love owning so much stock." and then they turn around and sell stock at the lowest its ever been. Doesn't make sense to me.
I'll also argue that increasing the buyback (by doing an SIB rather than NCIB) or doubling the dividend would not increase the share price. There may be a temporary spike from the uninformed buying in, but capital allocation is just one reason the share price is low. A higher dividend would be a terrible idea, something I trust the market would see through. And doing a SIB (you can't just "increase the money available for stock buyback" you have to file for permission) makes no sense since Input isn't even maxing out the current NCIB. Financial manipulation just to increase the share price seems like a waste of time and money, if you run a good business the market will eventually reward you. But with all the options and management selling shares, I wouldn't be shocked if money was spent just to increase the share price, at the expense of the long term business.
What would increase the stock price is growth in reserves. And perhaps more importantly, I think the market needs to see that Input can still sell capital streams, while growing the marketing and mortgage streams. Right now it really appears that Input comes out with a new product when they realize they can't sell enough of the old one. Farmers don't want anymore capital streams? Sell them marketing streams. Not enough demand for marketing streams? Sell mortgage streams.
Input Capital is a growth story that isn't growing much. I originally bought in because I took management at their word that they could deploy $50 million a year. That was a pipe dream, and I only blame myself for falling for it. If growth is jumpstarted, the investment opportunity completely changes, and so would the share price.
In the meantime, the floor is somewhere around today's price. Despite the poor execution by managemement (both growing the company and capital allocation), Input is still a business that would have free cash flow if they quit reinvesting. At today's price, you could run out the current streams and make shareholders almost whole, which is why the share price can't go much lower. But there isn't much upside either until management proves they know what they're doing and show they can execute the business plan. I see Input as mostly dead money for the foreseeable future.