MENU

Could CSL’s buyback continue?

Blood plasma and vaccine manufacturer CSL (ASX: CSL) is tipped to carry out a new $900 million share buy-back after its current buy-back concludes, according to a report by the Australian Financial Review.

Analyst Matthew Prior from Bank of America Merrill Lynch has suggested management at CSL will be looking to capital management initiatives given the company’s high cash generation. These initiatives could include acquisitions to expand its presence in China and a renewed buy-back. Given the rosy outlook for growth and cash flow, Prior has upgraded his price target for CSL to $71.25 which compares with a current trading price of $66.40.

Share buy-backs, when conducted at a reasonable price, can be a great way to improve shareholder value. However share buy-backs conducted on overpriced shares can be value-destroying to shareholders, so they are not without risk. Other firms currently conducting buy-backs include media and entertainment company Twenty-First Century Fox (ASX: FOX), pharmacy wholesaler Sigma Pharmaceuticals (ASX: SIP) and engineering contractor Clough (ASX: CLO).

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Tim McArthur owns shares in Twenty-First Century Fox.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.