Management has reasons for not doing buybacks, which is basically, "we sold shares at $15 to the public, so we don't think we should be using our money to buy them back higher than that."
I'm not as dismissive as you with respect to their leases. I think you should include them as debt in an enterprise valuation as they are necessary for the company to stay in business. As net income falls with renewals and spot rates, I'd expect dividends to come down to 5-10% of the existing share price. I just can't see this one recovering rapidly.
Let's say dividend comes down to 5-10% if we assume that 5-10% divident still comes from profits and not just by draining the cash pile. I still paid around 2 billion for around 4 billion of total cash. That is pretty attractive even if company just makes enough money to pay the leasing cost, which is essentially their Finance cost, but you don't have to touch the cash pile to pay the "principal" for that if you want to treat it like debt. I think Zim will find Its more accurate share price when earnings stabilise to lower levels and people can start calculating how much the business is worth on top of their assets.
The dollar is strong- all foreign-based stocks have dropped over the past several months.
Management has reasons for not doing buybacks, which is basically, "we sold shares at $15 to the public, so we don't think we should be using our money to buy them back higher than that."
I'm not as dismissive as you with respect to their leases. I think you should include them as debt in an enterprise valuation as they are necessary for the company to stay in business. As net income falls with renewals and spot rates, I'd expect dividends to come down to 5-10% of the existing share price. I just can't see this one recovering rapidly.
Let's say dividend comes down to 5-10% if we assume that 5-10% divident still comes from profits and not just by draining the cash pile. I still paid around 2 billion for around 4 billion of total cash. That is pretty attractive even if company just makes enough money to pay the leasing cost, which is essentially their Finance cost, but you don't have to touch the cash pile to pay the "principal" for that if you want to treat it like debt. I think Zim will find Its more accurate share price when earnings stabilise to lower levels and people can start calculating how much the business is worth on top of their assets.