RE:RE:RE:RE:RE:5MM shares buy backI found that the company has a very good history of utilizing most of their share buy backs over the last 5+ years. 5% share buybacks are pretty standard. Financial theory states that a company that can re-invest capital at a higher rate than the risk adjusted return in the market should keep redeploying that return into investments until the return on investment = that of the market. Otherwise the company should return cash back to shareholders. At this point its reasonable not to initiate a quarterly dividend. Considering the companies small size, a special dividend or quarterly dividend may have additional associated costs over a share buyback just on administrative fees. Also management is biased against special dividends because it lowers the value of the stock on a book value basis (Which is unfortunate because a dividend is more valuable) and therefore impacts their options. At this point as long as the strategy on capital redeployment is well communicated I am happy in any outcome of cash use back to shareholders or in reinvestment, as long as it's being well communicated to the shareholders and the reinvestment into the business keeps occuring and ROE remains above 20%. Its the non-use of cash that has me more concerned, so this to me is at least some kind of positive activity.
As for next year. Considering the average CDN to US spot is at least 10% lower. A no growth in business volume scenario should see revenues higher by 10% and expenses lowered by 10%. Margins should push higher (subtracting for any increased R&D and sales spending).