A quick comment on the Reckon buyback12.06.2014

Reckon just announced it had signed a selective buy-back agreement for Intuit's 11.5 per cent holding at a 13 per cent discount to current levels ($2.13). We  take a quick look at what this means.

The funding of $27.4m will not be a problem because Reckon's balance sheet is strong, with net debt of only about $15m.

We reguard it as a minor positive because the overhang has been removed and it’s a sign of management’s confidence, because it already has a sizeable position.

The company was already planning to buy back about 8 per cent of the 10 buy back announced last year. So, it means they get this stock on the cheap.

It is a minor positive because there are much bigger issues for the company than this, ie the take up of its new products.
 

 

About the Author

Richard Hemming

Investment analyst and Editor of Under the Radar Report

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