SLW share buyback from SA article: "the company buried news of a share buyback. Of course now in retrospect, the release does have a snippet in the title, but this should without a doubt have been announced separately. Both the new stream, which was the centerpiece, and the repurchase plan are key pieces of news.
So all of that aside, what do you need to know? Well. no other colleague on Seeking Alpha has discussed the repurchase plan, so I will tell you that Silver Wheaton has entered into "an automatic securities purchase plan" do that it can continue conducting repurchases of its common shares under its previously announced normal course issuer bid. Under the prior board approved plan, the company could purchase just over 20.2 million shares on both the Toronto Stock Exchange and New York Stock Exchange as well as other Canadian and US marketplaces.
Now here is the key. This plan will last 9 months. Purchases under the Plan will be made by Silver Wheaton's broker. Under the Plan, the broker may purchase shares under the Bid when Silver Wheaton management would ordinarily not be permitted (such as within specified dark periods around earnings etc.). The plan kicked off last week on January 27, 2016 and expires on September 22, 2016, and has been approved by the stock exchange. Randy Smallwood President and Chief Executive Officer of Silver Wheaton stated:
"We continue to believe in the underlying value of Silver Wheaton shares and that with our consistently strong cash flows, purchasing shares is an excellent way to provide further value for our shareholders."
The news is strong in tandem with its continued new streaming agreements. It is in shareholder's favor to buyback shares which increased earnings per share and reduces the float to which dividends would have to be paid. It also takes the pressure off of the company to actively watch share prices and decide when and how much stock to repurchase. One could argue of course correctly that the broker under the automatic plan may not get the best price because they are likely trying to buy as many shares as possible. Still the stock is under $12. Retiring shares here and below is a strong move for the company.
I know some would rather see the cash being applied toward the repurchase instead go right to shareholders. But this is a long-term play. Silver Wheaton has tied its dividend to be ~20% of cash flow. Cash flow will rise with silver in conjunction with the volume of streams in place. But having less shares on the float benefits everyone."
