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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", sykesix asked the members: "What do you do if you arrive early at movie besides go to the snack bar?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Author: TheReitStuff ⎊☼  😊 😞
Number: of 88930 
Subject: Re: Unite Group UTG, couple of notes
Date: 07/08/26 11:49 PM
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BTW, an interesting subtle aspect of these big buybacks. Please correct this view if it's incorrect.

When the company estimates forward what their earnings will be, they use the weighted average number of shares across the year. Similarly for reporting. However, I believe the cash/asset values are taken at a point in time of the results.

In other words, UTG or any company will only get 'half the buyback benefit' in the current tax year from the buybacks across the year, assuming a constant rate all year. However, the loss of assets fully affects the results.

There is also a gap between selling an asset, losing those rental yields, cancelling some debt, and buying back shares to cancel (very slow; there's a speed limit).

Again, this creates a lag where earnings drop in the current year, then the benefit shows up in the following year.

Adding these effects, I think more than half the earnings jump from the asset sales/buybacks this year will show up in the following year's results.

On the other hand, the market notoriously looks ahead to the future only when Murphy's Law says it will.

TRS
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This community has written 606 posts about Non-US Stocks. The article-length ones it recommended most:
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