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That's quite small in the scale of things
That's quite small in the scale of thingsThere are rules requiring all directors sales or purchases of shares be openly declared, this serves to maintain transparency for both the shareholders and the market in general. The director in question now holds 15,996 shares in FMG.
I believe the way it works is that they know how many shares need to be issued, because they know who has the reinvestment plan activated, but they don’t announce the price the shares will be issued at for 9 days after ex dividend, over those nine days they purchase the shares needed on market, and then issue them at the average price paid.That is interesting. I'm wondering how that is achieved and also how many shares are in effect bought back.
I'm aware they have had provision to buy back shares but Is there any notification of how many shares have been effectively transferred through the div reinvestment program ?
directors are no longer 'glued to their seats '( and in some cases i wish SOME were )There are rules requiring all directors sales or purchases of shares be openly declared, this serves to maintain transparency for both the shareholders and the market in general. The director in question now holds 15,996 shares in FMG.
there should be a notice ( already or soon ) on the DRP which SHOULD state whether the shares were issued , bought on-market , or any other way the DRP was filled ( like an off-market buy-back )I believe the way it works is that they know how many shares need to be issued, because they know who has the reinvestment plan activated, but they don’t announce the price the shares will be issued at for 9 days after ex dividend, over those nine days they purchase the shares needed on market, and then issue them at the average price paid.
I think the job of most directors at FMG is vote yes, or say “I resign”, when the chairmen holds 35% of the voting shares, you probably aren’t there to disagree with him, you are probably there for advice in your field eg if you are a lawyer, engineer, financier etc but not make big calls as to the direction of the ship.directors are no longer 'glued to their seats '( and in some cases i wish SOME were )
there is a modern trend of board refreshes , and while they can be good on poorly performing companies , one can only hope Twiggy is recruiting more TALENT and not just 'diversity ',
so a relatively new director buying a few extra shares probably won't excite anyone but that director
BTW i am all in favour of that 'transparency ' sometimes it gives a useful hint into the company
The drp announcement states all shares will be purchased on market.there should be a notice ( already or soon ) on the DRP which SHOULD state whether the shares were issued , bought on-market , or any other way the DRP was filled ( like an off-market buy-back )
in some companies that is not a big deal , but companies where the directors own more than 20% of the company ( combined ) it can be
FMG seems to be better than most at dotting Is and crossing Ts , so let's see
I prefer on market DRP purchases, otherwise they are technically capital raisings, which if a company required more capital I would just prefer them to pay a smaller dividend.PS have mixed feelings on on-market DRP buying especially in a company with solid growth plans ( it is a cheap way to increase capital reserves )
it’s not about voting power, it’s about diluting the earning power of the DRP/capital raising is done at a price lower than fair value.my holdings are normally tiny compared to the company issued share base , so only rarely does my voting power matter ( even when i had a fair slab of WOW )
it should be noted some of those Institutional holders looked at as a positive influence are the same managers that are lending out those shares for extra returns
it MIGHT be worth your time to peruse the change of holding releases to help detect which 'rent shares ' and which don't
Before raising capital by selling equity, I would rather my companies exhaust other optionssome companies use the cash saved by issuing the extra shares wisely , and some DON'T
That’s where I would have to disagree, I think FMG handing over the cash to the owners of the company actually shows huge discipline.you might have noticed SOME companies lack discipline , and personally i would rather have seen FMG pay a smaller div. and use the extra cash reserves wisely , i suspect there will be wild times ahead , whether they diversify from iron or not
now some companies ( especially REITs like their gearing , but need to snap up opportunities at relatively short notice )
WOW seems to get mostly fizzle for their retained divs , while spin-off SCP seems to do better with the extra cash
i guess time will tell and we will see if FMG needs to raise more cash in the next two years
That’s where I would have to disagree, I think FMG handing over the cash to the owners of the company actually shows huge discipline.
Yep, Andrew has charities and other business interests to invest in outside Fortescue, so as long as FMG has enough liquidity inside to keep its projects funded then there is little point keeping cash in the business bank account earning 0.5%In theory the concept of the managers of a company handing over profits to the owners as dividends is very sound. Plenty of companies where the managers just want to burn cash on almost anything except dividends.
FMG's situation is a bit different because the biggest shareholder is the founder and Chairman who is very happy to see maximum dividends to moi. He doesn't take any salary - just dividends.
I also note Twiggy reviewed executive bonuses because the last years super profit results made them too big in his view.
Fortescue posts record profit, dividend but cuts management bonuses
Fortescue Metals Group Ltd reported its highest ever annual profit and dividend on Monday due to sky-high iron ore prices but senior management received a surprise cut to bonus payments.www.reuters.com
Exactly, As an investor we have a choice to reinvest in the company who paid the dividend or to use the money to buy something else...until we need the money for something else.Yep, Andrew has charities and other business interests to invest in outside Fortescue, so as long as FMG has enough liquidity inside to keep its projects funded then there is little point keeping cash in the business bank account earning 0.5%
Many claim FMG should be spending their owners earnings on big diversification M&As, but if they pay big dividends, then the owners can diversify themselves into any assets they choose themselves.
Over the years my FMG dividends have helped me buy into Airports, electric car factories, film studios, industrial real estate, farmland, banks, smart phone makers, Themeparks and many more, so I don’t need FMG to diversify, their dividends allow me to diversify my own portfolio into exactly the industries I want.
have an order in for $15 ( which i MIGHT move lower next week ) after buying some yesterday @ $17.60
and on order in for more MGX @ 44c
remember i believe the recent commodity highs ( except PMs ) have been out of cycle and the real demand boom is still a few years away
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