CDW Holdings

ongoing share buy back program activated and confirmed with another chunk of 500lots gone in the morning. Looks like company is collecting to top up treasury for ESOS next year.

A bit late but join in this SBB party today, hopefully a "Santa Claus" rally for CDW this year end ;P

-v-

Yesterday's SBB results... Will they buy some more this week?

=====================================================

Daily Share Buy-Back Notice 
5/12/2016 - 600,000 shares. Price Paid per share SGD 0.2492 
Total Consideration (including stamp duties, clearing changes etc) paid or payable for the shares SGD 150,028.36

Cumulative No. of shares purchased to date^ Number Percentage#
By way of Market Acquisition 1,932,300 0.814

Number of issued shares excluding treasury shares after purchase 236,024,808
Number of treasury shares held after purchase 16,152,302

(06-12-2016, 10:47 AM)BlueKelah Wrote: Yesterday's SBB results... Will they buy some more this week?

=====================================================

Daily Share Buy-Back Notice 
5/12/2016 - 600,000 shares. Price Paid per share SGD 0.2492 
Total Consideration (including stamp duties, clearing changes etc) paid or payable for the shares SGD 150,028.36

Cumulative No. of shares purchased to date^ Number Percentage#
By way of Market Acquisition 1,932,300 0.814

Number of issued shares excluding treasury shares after purchase 236,024,808
Number of treasury shares held after purchase 16,152,302

Possible to have something to do with the Patent they got recently? because it really does not make sense why they do share buyback currently?

http://infopub.sgx.com/FileOpen/CDW-%20A...eID=418609

(06-12-2016, 04:10 PM)TUBInvesting Wrote:

(06-12-2016, 10:47 AM)BlueKelah Wrote: Yesterday's SBB results... Will they buy some more this week?

=====================================================

Daily Share Buy-Back Notice 
5/12/2016 - 600,000 shares. Price Paid per share SGD 0.2492 
Total Consideration (including stamp duties, clearing changes etc) paid or payable for the shares SGD 150,028.36

Cumulative No. of shares purchased to date^ Number Percentage#
By way of Market Acquisition 1,932,300 0.814

Number of issued shares excluding treasury shares after purchase 236,024,808
Number of treasury shares held after purchase 16,152,302

Possible to have something to do with the Patent they got recently? because it really does not make sense why they do share buyback currently?

http://infopub.sgx.com/FileOpen/CDW-%20A...eID=418609

Whilst anything biotech seems to always push up share prices and command lofty valuations, Pterostilbene Glycoside which is a Resveratrol derivative, is still under research for their antioxidant, anti-aging(for dementia), hair growth benefits. Both compounds are usually found in mainly red wine and grapes. This is mostly another health fad I reckon. But hey if the patents to end up bringing in royalties from those health companies in Japan I wont be complaining, so long as it doesn't involve too much expenditure and depletion of the cash pile.

The more highly effective treatment and now mainstream treatment for hair loss is still Finasteride which blocks male hormone receptor found in hair cells.

My bet is more on some orders coming in which will boost revenue and profit, thus giving management excuse to issue ESOS as performance bonus or whatever they like to call it. If you remember, in the past they had rewarded themselves well for taking care of the cash fiasco which was an oversight by them and no reason for a big reward for doing their management job in the first place.

from recent quarterly :
[As at the date of this report, a major player has asked the Group to prepare for a Work Sample Challenge Stage and an assessment of capability in mass production.]

[Although the sales of this segment for the third quarter showed a temporary recovery due to replacement orders for old models of gamesets, the foreseeable future is covered by low utilisation, a lack of orders and the uncertainty over the timing for new model launches. As a result, the Group has decided to consolidate the operation at the Dongguan plant into the Shanghai plant. The Dongguan plant will be designated for other OEM products.]

Whilst I dunno WTH is a work sample challenge stage (sounds more like a japanese variety show activity/game ), assuming its successful, it will be likely the newly empty Dongguan plant is being prepared for this "mass production" challenge. Major player == Big order rite?

This alone is a good reason for suddenly activating another round of share buyback. (They could have started SBB much earlier as share price has been down for a while already.)

(07-12-2016, 03:49 AM)BlueKelah Wrote:

(06-12-2016, 04:10 PM)TUBInvesting Wrote:

(06-12-2016, 10:47 AM)BlueKelah Wrote: Yesterday's SBB results... Will they buy some more this week?

=====================================================

Daily Share Buy-Back Notice 
5/12/2016 - 600,000 shares. Price Paid per share SGD 0.2492 
Total Consideration (including stamp duties, clearing changes etc) paid or payable for the shares SGD 150,028.36

Cumulative No. of shares purchased to date^ Number Percentage#
By way of Market Acquisition 1,932,300 0.814

Number of issued shares excluding treasury shares after purchase 236,024,808
Number of treasury shares held after purchase 16,152,302

Possible to have something to do with the Patent they got recently? because it really does not make sense why they do share buyback currently?

http://infopub.sgx.com/FileOpen/CDW-%20A...eID=418609

Whilst anything biotech seems to always push up share prices and command lofty valuations, Pterostilbene Glycoside which is a Resveratrol derivative, is still under research for their antioxidant, anti-aging(for dementia), hair growth benefits. Both compounds are usually found in mainly red wine and grapes. This is mostly another health fad I reckon. But hey if the patents to end up bringing in royalties from those health companies in Japan I wont be complaining, so long as it doesn't involve too much expenditure and depletion of the cash pile.

The more highly effective treatment and now mainstream treatment for hair loss is still Finasteride which blocks male hormone receptor found in hair cells.

My bet is more on some orders coming in which will boost revenue and profit, thus giving management excuse to issue ESOS as performance bonus or whatever they like to call it. If you remember, in the past they had rewarded themselves well for taking care of the cash fiasco which was an oversight by them and no reason for a big reward for doing their management job in the first place.

from recent quarterly :
[As at the date of this report, a major player has asked the Group to prepare for a Work Sample Challenge Stage and an assessment of capability in mass production.]

[Although the sales of this segment for the third quarter showed a temporary recovery due to replacement orders for old models of gamesets, the foreseeable future is covered by low utilisation, a lack of orders and the uncertainty over the timing for new model launches. As a result, the Group has decided to consolidate the operation at the Dongguan plant into the Shanghai plant. The Dongguan plant will be designated for other OEM products.]

Whilst I dunno WTH is a work sample challenge stage (sounds more like a japanese variety show activity/game ), assuming its successful, it will be likely the newly empty Dongguan plant is being prepared for this "mass production" challenge. Major player == Big order rite?

This alone is a good reason for suddenly activating another round of share buyback. (They could have started SBB much earlier as share price has been down for a while already.)

Don't think it's related to the patents. Those are a -ve IMO, not a +Ve for the company.

Everyone's focused on the company doing SBB, but who are those selling these shares to the company? If they are the other members of the public, that's fine. If they are the same guys who have just recently exercised their share options, well, think about that. 
The options do not have a lock in period upon exercising.

The recent rise is likely to be just due to the share buy backs. The buy backs account for the vast bulk of the volume on most days, and are done at prices that are close to the closing price on each day. To date, there are still 8.5mil share options outstanding (not exercised)

@TTTI : you are right : The recent rise IS due to the share buy backs. 1.9million shares bought back on a usually low volume counter sure push the price up.

Unless you are one of the top management it is unlikely you have a batch of 500lots to exercise and sell. And if you are top management, it is likely you will be a SSH and will have to declare your change in interest. And even if its CDW own people selling, why would they sell from 22c - 26c? why dun just put a few million shares in sell queue to block the price so company can buy cheap cheap (such as in the previous case of memtech, they had 100+lots blocking the sell queue everyday fora few months before they collected enough and the price boom up suddenly)If somehow insiders are "recycling" the 8.5m share options, then we can look forward to more price appreciation and buy backs as history has shown they like to top up the treasury shares before giving ESOS.

It doesn't really matter who is selling. What matters is how much they are eventually gonna buy and also why they are buying-> is there catalyst coming? or it is just for annual ESOS payout.

Of course as OPMI i do not like CDW doing share buy backs or share buy backs in general, even if at a price below NAV it is beneficial for certain metrics like EPS but does nothing much for the business itself. And since CDW does not cancel the treasury shares, the ones given out as ESOS is actually an expense on the company.

That's why i am buying, if the cheeky management are going to do SBB to fill up treasury and have ESOS party next year, then I am sure as hell gonna get at least a couple hundred lots and enjoy the ride up. Sell off next year before next quarter result in feb and let the price drop if there is really nothing exciting happening to the earnings or outlook.

At the moment its still near net cash and business is breakeven, even if next year make a small loss co. still can survive easily till next upturn. And if really nothing happen at dongguan factory, CDW style is they will sell it off and there will be a big cashflow into the company next year.

(07-12-2016, 11:38 AM)BlueKelah Wrote: @TTTI : you are right : The recent rise IS due to the share buy backs. 1.9million shares bought back on a usually low volume counter sure push the price up.

Unless you are one of the top management it is unlikely you have a batch of 500lots to exercise and sell. And if you are top management, it is likely you will be a SSH and will have to declare your change in interest. And even if its CDW own people selling, why would they sell from 22c - 26c? why dun just put a few million shares in sell queue to block the price so company can buy cheap cheap (such as in the previous case of memtech, they had 100+lots blocking the sell queue everyday fora few months before they collected enough and the price boom up suddenly)If somehow insiders are "recycling" the 8.5m share options, then we can look forward to more price appreciation and buy backs as history has shown they like to top up the treasury shares before giving ESOS.

It doesn't really matter who is selling. What matters is how much they are eventually gonna buy and also why they are buying-> is there catalyst coming? or it is just for annual ESOS payout.

Of course as OPMI i do not like CDW doing share buy backs or share buy backs in general, even if at a price below NAV it is beneficial for certain metrics like EPS but does nothing much for the business itself. And since CDW does not cancel the treasury shares, the ones given out as ESOS is actually an expense on the company.

That's why i am buying, if the cheeky management are going to do SBB to fill up treasury and have ESOS party next year, then I am sure as hell gonna get at least a couple hundred lots and enjoy the ride up. Sell off next year before next quarter result in feb and let the price drop if there is really nothing exciting happening to the earnings or outlook.

At the moment its still near net cash and business is breakeven, even if next year make a small loss co. still can survive easily till next upturn. And if really nothing happen at dongguan factory, CDW style is they will sell it off and there will be a big cashflow into the company next year.

"That's why i am buying, if the cheeky management are going to do SBB to fill up treasury and have ESOS party next year, then I am sure as hell gonna get at least a couple hundred lots and enjoy the ride up."

IF, and that's a big IF, the management are doing SBB, using company's money of course, then issuing options, exercising and immediately selling it off, how can a shareholder view this as a positive?
Maybe you can try to time it such that you ride on the rising share price and if you're lucky, get out together or before them. I would be more cautious about any long term position

If you're the sole owner of the company, would you allow company funds (aka shareholders money) to be used to buy back shares, issued at below market price, with no lock in period upon vesting? Isn't this just a way of transferring funds from the company to the receipants of the options then?

I'll emphasize that from my past dd and correspondence with CDW's CFO, my impression is that the company's management is honest and open. I don't think this is what's happening here, I am just responding to the suggested scenario above. The current share BB seems to be a legit means of adding on to the treasury shares to support their past obligations (ESOS options given out)

Because of low liquidity, naturally if the company is buying in such large volumes, it'd make the share price rise rapidly as it clears hurdles quickly.
Ultimately though, unless there are major developments like new orders won, that'd bring in real cold hard cash, it'll be hard to see this being sustained after the BBs conclude.

@ TTTI:

IF, and that's a big IF, the management are doing SBB, using company's money of course, then issuing options, exercising and immediately selling it off, how can a shareholder view this as a positive?
*In the case where SBB is done at a good discount to NAV, it is better than SBB done above NAV for and eventual ESOS payout. Since we all know when times are good, the mgt. of this company (and many other listco) WILL REWARD themselves with ESOS at some point, so its much better they do the SBB at a lower than higher stock price.

Maybe you can try to time it such that you ride on the rising share price and if you're lucky, get out together or before them. I would be more cautious about any long term position.
** Yep that is my intention. But no need to time, for sure the SBB will be done before 4Q year end report and AGM where they will get agreement to start granting ESOS and renew SBB mandate and all the usual stuff. So no need to time much, just buy now when they are doing SBB and sell before the FEB 4Q result, anytime in JAN. The mgt. will be unable to get their ESOS until afer the 4Q result and subsequent AGM.

If you're the sole owner of the company, would you allow company funds (aka shareholders money) to be used to buy back shares, issued at below market price, with no lock in period upon vesting? Isn't this just a way of transferring funds from the company to the receipants of the options then?
** YES and YES. I would love to do it as sole owner, it will reduce float, increase my % holdings and make all the rest of employees be very happy.

I'll emphasize that from my past dd and correspondence with CDW's CFO, my impression is that the company's management is honest and open. I don't think this is what's happening here, I am just responding to the suggested scenario above. The current share BB seems to be a legit means of adding on to the treasury shares to support their past obligations (ESOS options given out)
** I emailed the CFO as well before and got prompt answer, but that alone doesn't prove anything. Lol in fact he wouldnt reveal who their major customer is with the usual excuses... "tok kok" man, if other company can reveal orderbook, why cant this company. Dun reveal order book just means lack of transparency. If i really want, as shareholder i have rights to visit the factory and find out where they shipping to and who they buying supplies from. Also look at how mgt. reward themselves the last cash fiasco then you tell me if you still think management is HONEST and OPEN.

Ultimately though, unless there are major developments like new orders won, that'd bring in real cold hard cash, it'll be hard to see this being sustained after the BBs conclude
** Correct. It may not be sustained after SBBs finish and of course stock price only be up if company starts making some good money as usual.

Go and look at 2013 /2014 which were better times for the company. back then business good and co. gave out tons of stock options. Last year business bad, no stock options and cut to dividends. My estimate from past figures is if business recovers next quarter and is good again, they have reason to give out another ~9million options with price which is around 20% discount to whatever price the stock is around late April /May next year, so they will be looking to top up somewhere near there. The recent round only 1.9m not quite there yet and they need to do it before Jan, likely there is some lock out period for SBB before a quarterly report.

which leads back to why they need to top up treasury now if they know next few years is going to be bad years and challenging. Is it just as simple as wanna top up treasury when prices are at a bottom?

Why don't you try email CFO again and ask him why they are doing SBB, see what excuse he gonna give you??? after all he will be the one in charge to authorize the funds and execute it being the CFO and knows the real reason.

lol CDW mgt. must be reading VB. Paused their SBB 3 days and resume again last Friday. 182lots @ 0.2482.

Another 600 lots likely got wacked by them again today @~25c , looks like for now that is their SBB level. 

Total so far should be 2.7m shares bought back this round liao, on track towards my estimate of ~8million.

-v-

http://www.channelnewsasia.com/news/tech...63556.html

Industry is moving towards OLED, just a matter of time