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What is your opinion or view on Sigma Healthcare (SIG), formerly Sigma Pharmaceuticals (SIP)?
Their recent announcements about future court action over contracts for supply has seen their share price plummet. I recently noticed also, that they advised the ASX this month of a ‘Daily Share buy back’ , but seemed to be dated September 2012.
What is the link between this buy back, and how would it affect the share holdings I have in my SMSF?
A: Thanks for the question.
Sigma Healthcare (SIG) has an ongoing buyback that allows the company to buy back up to 10% of its shares. It has been refreshed several times.
To complete the buyback, they will need to buy another 101.2m shares (there are about 1,075m shares on issue).
Potentially, an on-market buyback will provide support for the share price, and improve earnings per share.
As for the company, can’t say I am a huge fan, and don’t like the idea that it is in dispute with its major customer.
The brokers are also a touch bearish – with 1 buy and 3 sells (according to FN Arena). Consensus target price is $0.79, very close to the current price of $0.805
Regards
