RE:TVE vs UPLGreat story bows333, it's always great to get some real life examples and lessons learned from others so thank you for this!
I only hold about 40K shares of TVE at this time but am seriously looking to buy another 40K or so if this thing will ever drop back down below $4.00 bucks ($3.50 level would be great). My average is cost is very near today's price but mainly what is holding me back from buying more right now is 2 things:
1.) While their cash flow is great at today's oil prices and they are seriously paying down debt, roughly a $ Billion dollars debt still outstanding is not exactly chump change.
2.) While share buybacks are great, with over 500 million issued and outstanding shares, even buying 500,000 shares a day based on about 240 trading days a year is only 120 million shares a year and so it would take ~ 4 years to buy back all their shares. And since the SEC only allows them to buyback a max of 25% of their daily volume that 25% changes each year as they buy back more and more shares. So the question is, should they increase the Divy or just keep the price collared here and keep buying back more shares is the dilema. It's a 2 edged sword because if they raise the Divy the share price will go higher and then it'll just cost them more to buy back shares.
So, given the above, me buying more shares at this time to get a 3.66% divy (based on today's closing price) seems a little counter intuitive considering that it seems TVE management will continue to slowly pay back debt and just continue to buy shares.
Don't get me wrong, I agree that this is a great stock and will have it's day, my question is when will that day be? Technically the stock is topping out (at least short term) and if management could just come up with some bad news (just kidding or maybe I'm not), we could all buy this stock cheaper, including TVE itself as a company.
This stock is trading in a very tight range of about .20 cents so I (and others) can't make huge profits day trading it like we did 2 years ago so it's a close watch for me for now. TVE management is clearly working with a hedge fund(s) (Ninepoint perhaps??) to collar its share price while they acquire all the buyback shares they can and so it's hard to get too excited about it right now until something changes. And I'm not quite sure what that will be considering that TVE likes buying back their shares and won't likely stop and let the share price run until they're done acquring what they want. So what will that number be? 120 million shares? 250 million shares?
For perhaps a clue, look at Trican Well Services - TCW. It went through a similar exercise these past 3 or so years and they've since bought back about 50% of their initial 400,000 plus shares and are now a different company (balance sheet wise) than they were and TVE will no doubt be the same, but in how many more days, weeks, years? And after all the buyback, etc their share price has roughly doubled as a result. Is that all we can expect from TVE when all is said and done in another year or two?
Maybe the answer is in your story, just buy all the TVE shares you want now and don't sell any until they are at $20 bucks or more. And that would be great except most of us don't have unlimited funds like the deep pocketed funds and so we small players need to diversify or risk gettinhg beat to death if things go south.
Do you or any other posters have any idea how many shares TVE management plans to buy back or when their buyback program is expected to end? ... because to me that's the million dollar question right now.
HB77