As part of its shareholder friendly moves,
Signet Jewelers Ltd
) announced a new share buyback program. The board of directors
of this retailer of jewelry and watches authorized the repurchase
of shares worth $350 million, indicating its commitment toward
utilizing cash flow to enhance stakeholders' return.
The announcement followed the completion of the earlier
two-year share repurchase program worth $350 million on May 4,
2013. The program was initiated in Jan 2012. During this period,
Signet bought back 7,430,782 shares at a price of $47.10 per
share by utilizing its cash reserves.
Signet confirmed that share repurchases under the new
authorization would be made through cash reserves and other
avenues providing liquidity. We observe that cash and cash
equivalents stood at $263.7 million as of May 4, 2013, when the
company's first-quarter fiscal 2014 ended. Cash flow from
operating activities generated during the quarter was $45.1
million, whereas free cash flow was $21.9 million.
We believe Signet is well positioned to support earnings
growth in the long run by leveraging capital investments made
over the past several years. If we look at the company's earnings
surprise history, it has outperformed the Zacks Consensus
Estimate by an average of 12.4% in the last 10 quarters.
Management now projects second-quarter earnings between 79
cents and 84 cents a share. The current Zacks Consensus Estimate
is in line with the higher end of the company's guidance
Signet, which operates over 1,900 stores, also declared a
quarterly dividend of 15 cents a share to be paid on Aug 28, 2013
to shareholders of record as of Aug 2, 2013. The dividend yield
based on the payout and the last closing market price is
Through share buyback and dividend payment activities, the
companies bolster investors' confidence in the stock, thereby
persuading them to either buy or hold the scrip instead of
selling them. Looking ahead, the company remains confident of its
growth potential, suggesting enhanced value for shareholders.
However, the news did not provide much impetus to this Zacks
Rank #3 (Hold) stock, which rose 2.9% or $1.94 to close at $69.91
Other Stocks to Consider
Other stocks worth considering in the retail sector include
Flowers Foods, Inc.
Bon-Ton Stores Inc.
) all of which carry a Zacks Rank #1 (Strong Buy).All these
companies are expected to continue with their upbeat
BON-TON STORES (BONT): Get Free Report
CONNS INC (CONN): Free Stock Analysis Report
FLOWERS FOODS (FLO): Free Stock Analysis
SIGNET GRP PLC (SIG): Free Stock Analysis
To read this article on Zacks.com click here.