Stagecoach "Transaction in Own Shares"

Looter

I've noticed the Stagecoach share price has come down a bit today, on their website they've stated the company bought 26,000 shares in the company on 7 July and and 75,000 on 8 July.

Is this considered a negative thing to do and is why the share price is coming down?

I am in the company BAYE scheme but don't really have any expertise in shares so thanks for any replies!

vectistim

I would guess those are fairly small purchases (I have no idea of the share price/no. of shares issued, etc.), but _generally_ a share buy back pushes the price up, eg:
Acme Widgets PLC has 10,000,000 shares worth £10 each. - company value £100,000,000
Acme has just won £5,000,000 in a court case against Wile E Coyote Ltd.
It doesn't have anything in mind to use that money for and so can return it to shareholders - it can do this by a special dividend, or by a share buy-back.
It now buys £5,000,000 worth of its own shares, so the number of shares in the marketplace decreases, so the value of the shares goes up.

I would _guess_ a few tens of thousands of shares in Stagecoach is neither here nor there and you are just seeing general market movement. How does it's movement compare with the rest of the market and in particular with the sector?
Has the company issued any statements today?

Looter

The company issued a statement today regarding yesterday's purchase, upon closer inspection they've done this numerous times lately.

The price has been steadily rising since I've been enrolled into the scheme in Nov 2011, I guess I'm just not used to seeing the share price go down as much as it has in the last few weeks. Hopefully nothing to worry about!

Reaper

Yes, share buy backs do not cause the share price to fall, they make it rise.

I'm pretty cynical about them. If the company is undervalued then there might be a case for doing it, but that's not usually the reason they are done.

Remember first of all the money being used is likely diverted from the dividend so it means less cold hard cash in your hand. In my opinion it may also indicate a lack of investment ideas.

Continuing with my cynicism - by artificially boosting both the share price and the EPS (earning per share) you can be pretty sure the guys in charge are boosting their bonuses which are likely to be linked to one or both of those indicators, or they have stock options - different mechanism, same result. They feather their nests without actually doing anything to grow the business.

SammenForLivet2

One reason in particular, why the stagecoach shareprice may have fallen is the fact that it did not win a number of rail franchisees, such as The DLR or a number of London Based Services.