QAV AU 837 — Buybacks, Breakthroughs & Boardroom Bombshells

QAV AU 837 AUDIO

[00:00:00]

Cameron: Wel­come back to QAV Aus­tralia. Tony, episode 8 37. Time­stamp, 16th of Sep­tem­ber, 2025. How you doing tk.

Tony Kynas­ton: Very well, thank you. Very good.

Cameron: That’s good. Hap­py birth­day, Alex. Twen­ty sev­en, six. I should know that she’s one year old­er than my boys, not two. I always remem­ber what’s she doing to cel­e­brate.

Tony Kynas­ton: make sure it’s 26, not 27. Not much. I think she’s going out with friends tonight. We had a din­ner with her on Fri­day night and then we saw her on Sat­ur­day night at the par­ty we were at, we caught up a cou­ple of times.

Um, but yeah, it was a good week­end up in Mel­bourne. social. Hmm.

Cameron: You um, I was just think­ing, I was on my bike ride like yes­ter­day. I was think­ing you are com­ing up to your one year, uh, down there, aren’t you? Was­n’t it Jan­u­ary? You moved?

Tony Kynas­ton: Yeah. So what’s that nine months [00:01:00] now? Yeah.

Cameron: What, what are the plans?

Tony Kynas­ton: Uh, we’re just decid­ing whether we extend the lease in Syd­ney or put it back on the mar­ket. Um,

Cameron: Right.

Tony Kynas­ton: so the just to wait it out and see, well, we’re wait­ing for the prop­er­ty mar­ket to improve

Cameron: Right. Has has­n’t improved yet, huh?

Tony Kynas­ton: I don’t know.

Cameron: Oh,

Tony Kynas­ton: of but,

Cameron: right,

Tony Kynas­ton: if improved a heck of a lot.

Cameron: right.

Tony Kynas­ton: So we’ll see.

Cameron: Well, I’ll tell you what has improved Tony. My segue, our dum­my, our, sor­ry. Light port­fo­lio results. Uh, killing it. Killing it. The, um, light group, uh, all four port­fo­lios put togeth­er, which has about 80 stocks in it. Wow. 60 to 80, some­where like that. Giv­ing or take.

Um. Which you would expect to sort of start to approach the all odds sort of per­for­mance, I guess, real­ly. Um, [00:02:00] but it’s cur­rent­ly since incep­tion, uh, per return­ing 18 point some­thing one 5% per annum ver­sus the SPD 200 at 11.63. So it’s well and tru­ly ahead of that. There’s four port­fo­lios in there. As I said, the first one that I launched is still try­ing to catch up.

It’s 6.6 ver­sus 10.21 for the index ’cause it launched at the worst pos­si­ble time. But the oth­er three are doing great. The sec­ond one is 17.6 ver­sus 9.3. The third one is 18.18 ver­sus 12.45, and the fourth one is 22.96 ver­sus 12 point 18. It has PRN in it, which is up 102% since I added it. I think all the ones that are doing well have got PRN in them.

Actu­al­ly, let me see if that’s true. Um, [00:03:00] oh no. But, um, the third one has GNP in it, which is up 118%. And the sec­ond one is got PRN in it, which is up 96%. Um, so, you know, I think I’ve said this a while back, but the dif­fer­ence between those three and the first one, apart from the tim­ing when the first one just, you know, was in that rule one death spi­ral for the first year or 18 months, it has­n’t real­ly had a huge win­ner.

It’s got WGN in it now, which is up 92% since I added it. When did I add that? Let’s see. Wag­n­er’s hold­ing com­pa­ny Decem­ber 24, so that’s not bad, but uh, the oth­ers have had some real rock stars, but, uh, there you go. So I’m quite hap­py about how that’s going after, uh, a rough start. The dum­my port­fo­lio since [00:04:00] incep­tion, let’s go back to 2019, 2nd of Sep­tem­ber through to, we’ll say yes­ter­day, 15th of Sep­tem­ber, up 17.83 per annum ver­sus 8.68 for the index.

So just slight­ly bet­ter than dou­ble mar­ket. And let me look at the US port­fo­lio singers. I’m not doing a US show today. I should just check where it’s at any­way. Um, all time it’s up 73% ver­sus the s and p 500 up 49. Not bad. So there you go. Things are cook­ing. Things are cook­ing. Good look­ing.

Tony Kynas­ton: [00:05:00] Hmm. They’re doing well.

Cameron: inter­est­ing load.

The one year for the US is basi­cal­ly equal to the mar­ket. We’re up 18.6 ver­sus the s and p up. 17.5. We’re slight­ly bet­ter, but not that much. But, um, we did col­lapse a lot at the begin­ning of the Trump admin­is­tra­tion as you know. But, uh, yeah, QAV works. Tony, I don’t know if you’ve, uh, I dun­no if you’ve, I dun­no if you’ve worked this out.

Uh. But it works. It’s still, it’s still kind of crazy to me, to be hon­est. Not that it works, but that you taught me how to do this and I’m run­ning these things and it just, it just works. It’s like, it’s still, every time I think about it, like I don’t think about it often when I do think about it, I’m like, oh my God, I know how to invest and get dou­ble mar­ket results.

That’s, it’s crazy real­ly.

Tony Kynas­ton: Yeah.

Cameron: It’s crazy that the sys­tem is that easy to fol­low and works and every­one’s not doing it real­ly

Tony Kynas­ton: [00:06:00] And it’s repeat­able and, yeah.

Cameron: fea­ture, bul­let and repeat­able.

Tony Kynas­ton: repeat­able at dif­fer­ent mar­kets. It works. Yep.

Cameron: Crazy. Any­way.

Tony Kynas­ton: teach­ing it for 60 years and it still has­n’t caught on.

Cameron: Well, um, let’s get into some, uh, well, we’ll talk about the news news, but I just wan­na talk about some spread­sheet stuff for the mem­bers. Um. Last week I men­tioned that I had fig­ured out a way to flag buy­backs and I went to add it to the check­list and then had some ques­tions that you and I talked about offline.

And I, uh, you end­ed up com­ing to the con­clu­sion that what we real­ly want to do is only score com­pa­nies that have exe­cut­ed a buy­back in the last 12 months where there’s been a greater than 5% reduc­tion of their out­stand­ing [00:07:00] shares.

Tony Kynas­ton: Yeah. So yeah, we had talked a bit over the week­end and last week about what the rules would be for buy­backs and um, I went back to what works on Wall Street and looked at what O’Shaugh­nessy did and. Just as a quick sum­ma­ry, O’Shaugh­nessy looked at share mar­ket data going back a long time, decades and decades and decades. He had a cou­ple of data­bas­es which enabled him to do that, and he did, um, analy­sis using regres­sion test­ing. so he was­n’t search­ing for buy­back announce­ments as such. He was just com­par­ing num­ber of shares on this, the most recent finan­cial reports with the num­ber of shares the past finan­cial report.

And if there was less shares, he was say­ing, well, that’s a buy­back. And in fact, he, he main­ly focused on a thing he called share­hold­er yield, which was a com­bi­na­tion of reduc­tion in shares. Plus the increase in any div­i­dends, less the reduc­tion in debt. So that kind of [00:08:00] was what he focused on. But there was a ref­er­ence to the fact that if he just pulled out buy­backs, it still improved his invest­ing. Um, so that got me think­ing, well, let’s do some research on buy­back announce­ments. And it’s a bit like we talked about last week. If you focus on some­thing, it gets gained. And so orig­i­nal­ly I think we talked, you talked about cod­ing, uh, to look for announce­ments, um, announc­ing a buy­back, but then I did some research chat.

GPT told me that some­where between 30 and 60% of announced buy­backs go uncom­plet­ed. Um, so, you know, com­pa­nies like to announce buy­backs and for what­ev­er rea­son, they may not get to do. Um, what they’ve announced. It could be that the share price goes up and I just stop buy­ing back. But it could also be that, um, they are look­ing for the bounce that comes with announc­ing a buy­back.

And then we’ll do a lit­tle bit of work to buy back shares, but not a whole lot. so the next ques­tion is, can we search [00:09:00] for a com­ple­tion announce­ment? And that might be pos­si­ble, cam, with your code. I’m not sure. Um, we need to look through announce­ments for com­ple­tions. There is a mar­ket code for it.

I now what the appen­dix is called. Three FI think from mem­o­ry. But, um, when I did some that appen­dix has nev­er, well, hard­ly ever ref­er­enced in the announce­ment. So you’ve got­ta do a tech search for buy­back com­ple­tion and then you’ve got a search in the doc­u­ment if it has it you how many shares were actu­al­ly bought back, and then com­pare that to what the num­ber of shares. at the start of the year to work out whether it’s a mean­ing­ful buy­back. So there’s a bit of work in that, but that, that might be the best way to do it. but the sec­ond best way is def­i­nite­ly just get­ting the lat­est results and then com­par­ing num­ber of shares on issue this half or this year with the, the pre pri­or peri­od. and then it comes down to mate­ri­al­i­ty. ’cause the whole point of look­ing for buy­backs, in my opin­ion, is that if a com­pa­ny’s doing well, throw­ing off cash, mak­ing prof­its, and [00:10:00] it then reduces the shares on the issue, then that should boost its met­rics. Earn­ings per share, for a start will go up. If not, you know, and all the oth­er met­rics will as well. so. That’s real­ly only gonna be an impact if there’s a mate­r­i­al num­ber of shares brought back. And so I, I think five per­cent’s prob­a­bly a good hur­dle for that if they buy back shares, but it’s less than that. It’s not gonna have a real boost to earn­ings per share. And the oth­er met­rics, um, if they buy back more, great. So I thought we’d score it for a 5% share, back share buy­back, and we test it by, this year’s shares ver­sus last year’s shares when they release their num­bers. A cou­ple of com­ments on that. Uh, the, the buy­back might already be baked into the share price. ’cause as I said, com­pa­nies that announced buy­backs and then pro­gres­sive­ly announced how many shares they bought back will get some kind of stock mar­ket price lift from that. again, when I researched that to see whether it was the case that they got their biggest bump when the announce­ment was [00:11:00] made, always appear to be the case. And it was often that the buy­back was announced when they were report­ing num­bers and there was oth­er things in the announce­ments that were dri­ving. share price, like, you know, what they see what their out­look was for, um, their finances going for­ward. whether they, whether there was oth­er things hap­pen­ing with the busi­ness, whether the results were good, for exam­ple. So not, it’s was­n’t clear that you could, um, use the announce­ment. And then there was also the case that they may not buy the shares, so, or buy the shares that they said they would buy.

So, um, you can’t real­ly bank on it. Uh, and the oth­er risk, I think, with wait­ing for the results to cal­cu­late the less­en­ing of the num­ber of shares is that the met­rics like earn­ings per share, that we’re look­ing for a boost and they’ve already been boost­ed so that, you know, at the, at the results time we’re get­ting you earn­ings per share num­bers, for exam­ple.

And it’s on the, the low­er share base. So the uplift has already hap­pened. But I guess, you know, that’s [00:12:00] the way Shaw­nessy did it. And I guess what his point is, and I guess what my point is, is that if the com­pa­ny’s good and it’s throw­ing off lots of cash and earn­ings. the net reduc­tion in share base is gonna keep it in good stead going for­ward.

So it’s, it’s mak­ing the com­pa­ny even more robust. So I think by doing it the way that I’m sug­gest­ing, we may not get the ini­tial kick­er from the buy­back, but the com­pa­ny’s bet­ter off going for­ward. So we wan­na, we’re real­ly scor­ing it for its robust­ness going for­ward.

Cameron: So what I end­ed up doing was writ­ing some code that looks at the Stock Doc­tor fig­ures for out­stand­ing shares from the end of last finan­cial year, so 30th of June fig­ure and the end of the finan­cial year, pre­vi­ous year, and com­par­ing the two and then see­ing if there was a greater than 5% reduc­tion. And then cross-ref­er­enc­ing that to announce­ments of buy­backs and if there, if they did­n’t announce a buy­back in [00:13:00] that 12 year peri­od and the shares have been reduced by more than 5%, I gave them a score of one.

Tony Kynas­ton: Yeah, I don’t think you need to search for the buy­back nec­es­sar­i­ly. ’cause if the shares go down, it’s a good thing any­way. I can’t, can’t think of why they, why they would go down oth­er­wise.

Cameron: Okay, so that’s built in, and there was only three com­pa­nies that turned up on the buy list this week that got a score for that E‑D-U-K-A‑R and TWR Tow­er. So plen­ty of buy­backs, but announce­ments and buy­backs that hap­pened, but not greater than 5% reduc­tion. So

Tony Kynas­ton: that’s inter­est­ing, isn’t it? So that like, we’ll be. Those ones that have been announced now we’ll be check­ing in 11 months time or what­ev­er. Um, it’ll, it’ll be inter­est­ing to see how many actu­al­ly get to the stage of a mate­r­i­al buy­back. but what you’re say­ing is for the what, for the ones that were announced last year, which I guess is gonna be kind of equiv­a­lent to the num­ber an ounce, [00:14:00] now only had three that actu­al­ly got to a mate­r­i­al thresh­old of buy­ing back com­plet­ed.

Cameron: yeah, that’s right.

Tony Kynas­ton: that, also says to me, ignore the announce­ment and go on the fact.

Cameron: Yeah. Yeah. Yeah. So that was fun. And it was inter­est­ing because when you came back to me over the week­end or late last week and said you want­ed to ignore the announce­ment and look at the fig­ures, I was like, I can do that. Because I’d already script­ed look­ing at Stock Doc­tor to get the, um, man­u­al data stuff.

So I, I had a script already. I just said, Hey, take this script and change it to look for this data instead of that data. And it was a pret­ty easy job.

Tony Kynas­ton: Right.

Cameron: The oth­er thing, I, Hmm.

Tony Kynas­ton: Well, well, thanks of all, first of all, thanks for doing that. ’cause that’s a, a big help. But, but sec­ond­ly, can you scrape the co the cor­po­rate results for things like that? Or do you have to use Stock Doc­tor?

Cameron: I could do that. Yeah. Now I have all the annu­al [00:15:00] reports down­loaded. I can write scripts to search the annu­al reports and pull out all sorts of data. It’s prob­a­bly gonna be a lit­tle bit more com­pli­cat­ed ’cause I have to, you know, look for cer­tain, I guess, uh, stan­dard­ized phras­es in the reports. But I’m already doing that for the audits.

So that’s the way my audit check­er works, is it scans all the annu­al reports for men­tions of an audit, so I could get it to scan them for any­thing that’s in the reports. Real­ly?