When Canadian energy player EnCana
Why teased? Well, the program's paused as long as the spinoff of Cenovus Energy, EnCana's integrated oil arm, is still in the offing. Since the split is a non-starter in this market, the buyback can't resume anytime soon.
The sequence here defies logic. Once the markets are cheery enough to enable a split-up and recapitalization of EnCana's two businesses, the shares won't be on sale anymore. The break-up could be implemented at anytime in the future, while a repurchase program would be most effective in the near term.
As proposed, this is no tentative top-up. The repurchase authorization covers fully 10% of EnCana's public float. While that doesn't quite match Anadarko Petroleum's
My fellow Fool Rich Duprey has decided to presume buybacks guilty until proven innocent. This is understandable. When liquidity was sloshing around the world not so long ago, a huge amount of shares were repurchased with borrowed money, at any old price, all in the name of value enhancement.
That chapter is closed. If a company is buying back shares in this horrid market, where financing is next to impossible to secure, that speaks volumes about the firm's fortitude.
EnCana, with its enchanting financial position, would join my "innocent" list right alongside Anadarko and PotashCorp
So, come on EnCana -- get with the (repurchase) program.
EnCana is rated a full five stars by Motley Fool CAPS players. That's a strong endorsement -- but we could use even more points of view. Weigh in with your own call right here.