Longs, Momentum Traders, and Beer Drinkers,
It’s been a fortunate time for me to be able to post this much. I will try to make it count.
Now that buybacks are here, we have some idea what to look for. (FYI WTI OIL US $105.20)
Days remaining in the year: 243 Trading Days remaining in the year: 169 (Approximate)
Funds to be applied to buybacks: 175 Million (30 Million of that in hand from Q1)
Here is a table showing how many shares can be bought per day, at an average price, in 169 trading days.
| Share Price | Share Quantity |
| | |
| $5.00 | 207,101 |
| $5.50 | 188,273 |
| $6.00 | 172,584 |
| $6.50 | 159,308 |
| $7.00 | 147,929 |
| $7.50 | 138,067 |
| $8.00 | 129,438 |
| $8.50 | 121,824 |
It looks small, and it compounds over time. Where regular buys and sells count as volume only, buybacks count as a reduction in outstanding shares, as every purchase is also a cancellation of those shares. At today’s prices, approximately 775 thousand shares each week, will come out of the float, and be removed from the outstanding number.
I believe this is why the delay in buying back the shares. The exchange and the transfer agent, need to know when this activity occurs, to keep accurate statistics. I would also guess the way those shares are traded, would likely be a monetary amount specified, for a given time frame, and an upper/lower limit to be paid for those shares, which are to be canceled. The execution of the buyback could be a single block, or it could require a long report, depending on how it is filled.
This is the part that may be hard to accept. It is now in our best interest for the price to go lower, because we get more buyback for the money. This is a hard to take win/win for longs. We now benefit long term, if the price goes either way. So I am personally rooting for a reduction in share price, while still being thrilled if it goes higher!
Will this change how institutions take their positions? My opinion is they will get more for their money near term. Their valuation models, if automated and living, will change more rapidly, with per share metrics resembling my table reducing share count. If institutions were waiting for the details of the buybacks to be announced, before deciding what kind of position to take, or how much to increase it by, the waiting is now over, and the needed information can be plugged in to the models, that give them the information required to make a decision. I think models work fast, and meetings will take up to three days. I think Thursday this week, will be the day to look for more institutional interest. Since pros trade in the afternoon, look for a little more afternoon volume than we have had lately.
This is the new DYNAMIC Baytex, the static Baytex of old, has retired.
Another way to think of buybacks, is a dividend that compounds daily, instead of quarterly, that is tax free. The short interest is really low, and that does not mean the buybacks are not like a vice jaw on each ear of the shorts, being closed a little tighter each trading day! This is one more reason for shorts to reconsider their side of the trade.
On the topic of beer, beer o-clock has been mentioned. Beer :30 is also an option.
What is the best Canadian Beer:
https://www.bartenderone.com/news/2013/11/what-is-the-best-canadian-beer/
This is the best link I could find in a short time.
Enjoy the improving weather, and if you drink it, the beer!
RS
Message Board Distorters Post
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Baytex and those who make the markets.
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