Entertainment and lodging company, The Marcus Corp. (
) has approved an additional share repurchase of up to 3 million
outstanding common shares of the company. The buyback will be
made through open market operations and it has no expiration
The latest sanction expands the company's existing share
repurchase program that had approximately 955,000 shares
remaining under prior authorizations as of December 31, 2012.
According to the company, the new share repurchase program may be
suspended, modified or discontinued at any time.
The Milwaukee-based company bought back around 1.8 million shares
since June 1, 2012. During its recently concluded second-quarter
fiscal 2013 earnings, Marcus repurchased 1.6 million shares. Cash
and cash equivalents were $17.7 million at the end of the second
quarter versus $12.4 million at the end of May 31, 2012.
We appreciate Marcus's effort to bolster long-term shareholder
value. We believe that the share repurchase authorization affirms
the company's positive outlook and reflects its confidence in its
At the same time, the share buyback will help the company reduce
outstanding share count, thereby increasing earnings per share
and return on equity. Apart from bolstering shareholder value,
this strategic move lifts the relatively undervalued share price.
Besides its share repurchase program, the company has a regular
dividend distribution program in place. Last month, the hotelier
also approved a special dividend of $1.00 per share in
anticipation of a dividend tax rate increase in 2013.
Additionally, the company had brought forward the date of payment
for the next two regular quarterly dividends.
Marcus currently carries a Zacks Rank #1 (Strong Buy). Besides
Marcus, other hoteliers currently performing well include Choice
Hotel International (
), and Orient-Express Hotels Ltd. (
). Both the companies carry a Zacks Rank #2 (Buy).
CHOICE HTL INTL (CHH): Free Stock Analysis
MARCUS CORP (MCS): Free Stock Analysis Report
ORIENT EXP HOTL (OEH): Free Stock Analysis
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