Shares in Stobart Group Limited (LON:STOB) moved higher this morning after the infrastructure and support services unveiled details of a proposed share buyback scheme.
Stobart is looking to buy back up to 3mln of its shares, which it will keep in treasury to be used for share awards granted to employees.
The maximum price has been set at no higher than i) 5% above the average share price for the five business days immediately before the purchase; and ii) the higher of the price of the last independent trade, and the highest independent bid at the time of the purchase.
Buybacks are generally seen as a good thing for a couple of reasons.
Firstly, an investment in itself shows the company has confidence in its future while, all else being equal, fewer shares on the market boosts earnings per share (EPS) which could in turn beef up its valuation.
Stobart shares gained 2.7% on Friday morning to trade at an all-time high of 242.4p.