2018 capital strategy not appropriate for 2019The 2018 share buy back strategy was wildly succesfull in terms of volume purchases at amazingly low prices i.e. outstanding common shares are now still lower than at 2016 levels, mostly below $17. No dividends were paid on the common shares which would have been contradictive to the buyback program targets in that dividends would have raised share prices.
A second disadvantage was in that, I believe, all purchases were made in large blocks from larger corporate holders e,g, Hathawy and possibley Tree Island and none from much smaller shareholders These buybacks had little effect on Dec 18 to Feb 19 share prices and deterents to short sellers.
This strategy continued through Jan and Feb 2019 without dividends and I believe contributed to the very high short purchases i.e. 14 million against now 60 million outstanding..Significant common share dividends to all shareholders should now be paid to recognize improved earnings, the fewer shares outstanding and as an aggressive attack on the existing short shareholders on outstanding and revolving cyclical sales and buybacks.
I believe it is now time and turn HCG's attention to declaring substantial dividends to all common shareholders and I don't mean 20 cents a share. The 2018 book values per share were calculated correctly but in fact understated book value since so many shares were purchased in late 2018. This understatement will continue to lesser extent in the first quarter of 2019 because of the continuing buyback purchases.
To start the squeese on the short sellers, I am thinking of dividends between 35 cents and 40 cents. This will seem supportable when the earnings are calculated for Quarter 1 for 2019. (my guess of 60 cents and climbing)