Hogfan: BJS
The investor in me (he's the little guy in white that sits on my left shoulder) sees a company that is rebuying its shares (at signifigantly higher prices than current pps) at the expense of taking on LT debt. They either really believe the stock is a bargain or they are really making a big mistake (or it's something else beyond my understanding - always a possibility).
The trader in me (he's the little guy in red on my right shoulder) sees a solid company sitting in a zone of support from a cup-and-handle formed late '05/early '06.
When the two little guys agree, I usually go long.
From the 10-K:
"On June 8, 2006, we completed a public offering of $500.0 million aggregate principal amount of Senior Notes, consisting of $250.0 million of floating rate Senior Notes due 2008, with an annual interest rate of three-month LIBOR plus 17 basis points, and $250.0 million of 5.75% Senior Notes due 2011. The net proceeds from the offering of approximately $497.1 million, after deducting underwriting discounts and commissions and expenses, were predominantly used to repurchase outstanding shares of our common stock. In addition, the proceeds were used to repay indebtedness, fund capital expenditures and for other corporate purposes. As of September 30, 2006, we had $250.0 million of the Senior Notes due 2008 issued and outstanding and $249.7 million of the 5.75% Senior Notes due 2011 issued and outstanding."
And:
"On December 19, 1997, our Board of Directors authorized a stock repurchase program of up to $150 million. Through a series of increases, the stock repurchase program is now authorized to repurchase up to $2.2 billion. Repurchases are made at the discretion of management and the program will remain in effect until terminated by our Board of Directors. We purchased 48,366,000 shares at a cost of $499.0 million through fiscal 2004. During fiscal 2005, we purchased a total of 3,982,000 shares at a cost of $98.4 million. During fiscal 2006, we purchased a total of 31,725,882 shares at a cost of $1,133.3 million.
Subsequent to September 30, 2006, we have purchased 668,889 shares for $20.0 million through November 30, 2006 under our stock repurchase program as discussed in Note 14 of the Notes to the Consolidated Financial Statements. We have authority remaining to purchase up to an additional $449.3 million in stock as of November 30, 2006."
There's lots and lots of other good info in the 10-K, if you really want to get into it. It's very well-written and thorough, in my opinion: http://www.sec.gov/Archives/edgar/data/864328/000119312506248527/d10k.htm
Of course, their rev/earnings/pps will be tied-in to the price of nat gas & crude, and hence the weather (still 50's here in western Ohio, and my kids have yet to make a snowman this year).
Hope this provides a start for you.
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