COMPANY
REPURCHASES
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CHAIN BRIDGE INVESTING
JANUARY 24, 2010
COMPANIES ANNOUNCING REPURCHASES FROM JANUARY 18 - 22, 2010
Chain Bridge Investing (“CB”), on a weekly basis, will shift through publicly held companies that have announced share repurchase plans during the past week. Share repurchase programs represent a strategic capital allocation decision by the company’s management. In a world where all other variables are held constant, repurchases will increase the value of the shares held by the current investors. Theoretically, a company should only repurchase its shares when it believes the shares are cheaply priced in the market and does not have other more profitable uses of its cash. On the other hand, a company tends to issue shares when it needs additional financing or believes the current market pricing is expensive. A company that has decided to repurchase its shares usually merits the attention of investors. In general, few companies make these repurchases, which tend to be implemented by managements considerate of the shareholders’ interest. Instead, many companies, especially those straddled with debt, will frequently issue additional shares to obtain necessary financing. Yet, share repurchases can indicate a company has limited growth potential or management is missing other investment opportunities. Nevertheless, share repurchases should not be ignored. This week, CB found four companies announcing repurchases ranging from 5.00% to 8.24% of the current shares outstanding. These companies are: (1) Matthews International Corp. (“MATW”); (2) Washington Post Co. (“WPO”); (3) Simulations Plus (“SLP”); and (4) First South Bancorp (“FSBK”). The fundamentals of these companies are show in the exhibits below. If CB discovers any future investment potential in these companies, it will be posted on www.chainbridgeinvesting.com. As a final note, these listings are in no way to be construed as financial advice or investment recommendations. These listings are meant to provide ideas to readers for their own research and show parts of the investment research process of CB. All data is pulled from Stock Pro Investor and Yahoo! Finance. CB is not an investment advisor, please read the disclaimer at www.chainbridgeinvesting.com/disclaimer/.
EXHIBITS
Exhibit A: Companies Announcing Share Repurchases from January 18 - 22, 2010 Announced Shares Shares Currently Percentage of Shares Company Ticker To Be Repurchased Outstanding Being Repurchased Matthews International Corp. MATW 2,500,000 30,331,000 8.24% Washington Post Co. WPO 750,000 9,399,000 7.98% Simulations Plus SLP 1,000,000 15,681,000 6.38% First South Bancorp FSBK 487,100 9,742,000 5.00%
Date 1/22/2010 1/21/2010 1/20/2010 1/19/2010
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REPURCHASES
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PAGE 2 JANUARY 24, 2010
EXHIBITS (CONTINUED)
Exhibit B: Companies Announcing Share Repurchases from January 18 - 22, 2010
# 1 2 3 4 Company Name Matthews International Corpora Washington Post Company, The Simulations Plus, Inc. First South Bancorp, Inc. Ticker MATW WPO SLP FSBK Industry Furniture & Fixtures Printing & Publishing Software & Programming Regional Banks Exchange Nasdaq New York Nasdaq Nasdaq Website http://www.matw.com/ http://www.washpostco.com/ http://www.simulations-plus.com/ https://www.firstsouthnc.com/ Country United States United States United States United States
Exhibit C: Companies Announcing Share Repurchases from January 18 - 22, 2010
# 1 2 3 4 Company Name Matthews International Corpora Washington Post Company, The Simulations Plus, Inc. First South Bancorp, Inc. Price $ 34.19 446.82 1.59 10.22 % of 52- Mkt. Cap. Cash Wk. High (m) Debt (m) (m) 84.4% $ 1,045 $ 252 $ 58 90.2% 4,201 399 501 77.6% 24 8 73.5% 100 10 16
PE PE - 3 Yr. Yr+1 Avg. EPS PEG 13.4x 15.9x 1.3 nm 18.8x nm nm 17.5x nm nm 6.8x nm
EV (m) $ 1,239 4,099 16 94
Short Gross Ratio Margin 8.3x 37.8% 3.0x 55.3% .0x 74.5% 28.0x nm
Oper. RoA RoE Margin (LTM) (LTM) 12.9% 6.3% 13.6% 2.4% 0.6% 1.0% 19.1% 12.7% 15.0% 53.2% 0.9% 8.7%
Exhibit D: Companies Announcing Share Repurchases from January 18 - 22, 2010
# 1 2 3 4 Company Name Matthews International Corpora Washington Post Company, The Simulations Plus, Inc. First South Bancorp, Inc. P/E PE Yr+0 17.9x 15.3x 144.8x 104.4x 17.2x 15.9x 13.9x nm P/S 1.32x .93x 2.62x 2.66x % S 1 Yr. P/B P/ FCFPS CapEx/S Gwth 2.4x 14.5x 2.5% -4.6% 1.5x 11.7x 6.0% 6.7% 2.3x 11.4x 7.4% 1.1% 1.1x nm 0.4% -15.3% S 3 Yr. EV/ LT Debt/ Net Debt/ CAGR EBITDA Total Cap. EBITDA 2.9% 8.83x 35.3% 1.38x 7.9% 7.59x 12.1% -.19x 15.5% 7.90x 0.0% -4.0x 3.7% nm 10.5% nm
* Abbreviations: EV = Enterprise Value; M = Millions; LTM = Latest-12 Months; RoA = Return on Assets; RoE = Return on Equity; P/E = Price/Earnings; PEG = Price/Estimated Earnings Growth; P/S = Price/Sales; P/B = Price/Book; P/FCFPS = Price/Free Cash Flow per Share; CapEx = Capital Expenditures; S = Sales; CAGR = Compounded Annual Growth Rate; EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization; NM = Not Material. * All company financial data is downloaded from Yahoo and Stock Investor Pro, Chain Bridge Investing does not guarantee the accuracy of these figures and encourages readers to do their own research. This presentation is meant to provide the reader with some research ideas. * Due to formatting some company names may be abbreviated.
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