Canon Inc. to Acquire Own Shares

[Canon Rumors]

According to a press release from Canon, the company plans to acquire about 14 million of its own shares which will cost between $450-$500 million dollars.</p>
<p>The company is doing the stock acquisition with the “aim of improving capital efficiency and ensuring a flexible capital strategy that provides for such future transactions as share exchanges.”</p>
<p>Canon plans to acquire the 14 million shares between June 1, 2017 – July 14, 2017.</p>
<p>You can see the press release <a href="http://www.canon.com/ir/release/2017/p2017may31e.pdf">here</a>.</p>
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[Mt Spokane Photography]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

 

[vangelismm]

I wont sell mine.

 

[Hector1970]

It's often done just to raise the share price to keep shareholders happy if the share price is stagnating. It's usually not a great sign but it can help to reduce shareholder interference or if Canon are sure their share price is under valued currently it can be a good move.

 

[deorum]

thats good.
it shows that canon believes in her job.
Maybe is about to introduce something ground breaking.

 

[RGF]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

Why buy stock and then use it for an acquisition. If I were to sell my company (if I had a company) I would want cash (though there might be a tax reason to take shares).

The cynical side of me thinks there is no good investment in house so they are spending this $ to avoid being a take over target. This bodes poorly for the future of photography - no big investments.

 

[Mt Spokane Photography]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

I think you are right on.

Profits are on the way.

There is a spike in RandD spending late last year. Maybe a breakthrough in tech is not to far away.

https://ycharts.com/companies/CAJ/r_and_d_expense

Canon's R&D from their financial report shows little change from quarter to quarter as a percentage of sales.

I'm in doubt about the link you show, it does not seem to correlate with Canon financial releases.

Canon has not released financial data past March 2017, where there is a slight increase in R&D dollars for the first quarter of 2017 over a year ago, but a decrease as a percentage of sales. The reason for the increase in R&D dollars is due to the acquisition of Axis and Toshiba last year. Their R&D is added to the totals after the acquisition, but as a percentage of total Canon sales, R&D has dropped.

R&D forcast for all of 2017 - 345,000 million yen

Actuals:

2016 - 302,376 million yen

Canon does business in Yen, not dollars, which depend on exchange rates and can give a wrong idea.

 

[scrup]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

I think you are right on.

Profits are on the way.

There is a spike in RandD spending late last year. Maybe a breakthrough in tech is not to far away.

https://ycharts.com/companies/CAJ/r_and_d_expense

Canon's R&D from their financial report shows little change from quarter to quarter as a percentage of sales.

I'm in doubt about the link you show, it does not seem to correlate with Canon financial releases.

Canon has not released financial data past March 2017, where there is a slight increase in R&D dollars for the first quarter of 2017 over a year ago, but a decrease as a percentage of sales. The reason for the increase in R&D dollars is due to the acquisition of Axis and Toshiba last year. Their R&D is added to the totals after the acquisition, but as a percentage of total Canon sales, R&D has dropped.

R&D forcast for all of 2017 - 345,000 million yen

Actuals:

2016 - 302,376 million yen

Canon does business in Yen, not dollars, which depend on exchange rates and can give a wrong idea.

The numbers are quite off from official reports so i have retracted that post.

 

[Wizardly]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

Why buy stock and then use it for an acquisition. If I were to sell my company (if I had a company) I would want cash (though there might be a tax reason to take shares).

The cynical side of me thinks there is no good investment in house so they are spending this $ to avoid being a take over target. This bodes poorly for the future of photography - no big investments.

Fun fact, Canon is *NOT* just a camera company. They are an office equipment and medical equipment company that sells imaging equipment on the side (synergies FTW). Imaging in total is less than 1/3 of the business. Your cynicism is probably better channeled to the lament that there aren't any good office or medical equipment or imaging investments that link to their existing businesses.

A stock buyback means that cash is retained in the company as value rather than distributed as dividends. New shares can always be used later if needed.

I'm optimistic. Unlike Nikon that needs to restructure, and other makers that need to change direction, or Sony that can barely stay profitable, Canon is rolling along.

 

[Mt Spokane Photography]

The cynical side of me thinks there is no good investment in house so they are spending this $ to avoid being a take over target. This bodes poorly for the future of photography - no big investments.

Canon has recently made some huge investments, they have been sitting on lots of cash, and are putting it to work. If you do not believe buying Axis and then the Toshiba Medical Unit counts as a investment, I'd disagree. Their problem is that after buying the two companies, they started making a decent profit, and, once again need to do something other than let the cash sit. Canon likes to buy a industry leader, even if it costs a lot of money, they hit home runs doing that last year. Expect them to be looking to invest more money in imaging companies.

 

[TeT]

When you research Canon stock, camera's, lenses and related items are about the 8th product area mentioned.

 

[YuengLinger]

Somebody doesn't think we are at the top of the market.

 

[Mt Spokane Photography]

When you research Canon stock, camera's, lenses and related items are about the 8th product area mentioned.

Cameras are becoming a much smaller part of Canon's business. However, they are a very visible part, and create Brand Recognition, which is a very valuable commodity.

Sales by business unit (millions of Yen)
Three months ended
March 31, 2017

Office 457,745
Imaging System 242,059
Industry and Others 294,215 (Up 126% over last year due to purchase of Axis and Toshiba Medical)


Office Business Unit :
Office multifunction devices (MFDs) / Laser multifunction printers (MFPs) / Laser printers /
Digital production printing systems / High speed continuous feed printers / Wide-format printers /
Document solutions

Imaging System Business Unit :
Interchangeable lens digital cameras / Digital compact cameras / Digital camcorders / Digital
cinema cameras / Interchangeable lenses / Compact photo printers / Inkjet printers / Large format
inkjet printers / Commercial photo printers / Image scanners / Multimedia projectors / Broadcast
equipment / Calculators

Industry and Others Business Unit :
Semiconductor lithography equipment / FPD (Flat panel display) lithography equipment / Digital
radiography systems / Diagnostic x-ray systems / Computed tomography / Magnetic resonance imaging /
Diagnostic ultrasound systems / Clinical chemistry analyzers / Ophthalmic equipment / Vacuum
thin-film deposition equipment /
Organic LED (OLED) panel manufacturing equipment / Die bonders / Micromotors / Network cameras /
Handy terminals / Document scanners

 

[RGF]

With the value of the Yen rising, and profits going up, Canon stock may be a good buy. As they said, the stock can be used for trade in the event of a future acquisition, I expect that Canon is shopping, their two big acquisitions have turned nice profits, and bigger profits may be on the way.

Why buy stock and then use it for an acquisition. If I were to sell my company (if I had a company) I would want cash (though there might be a tax reason to take shares).

The cynical side of me thinks there is no good investment in house so they are spending this $ to avoid being a take over target. This bodes poorly for the future of photography - no big investments.

Fun fact, Canon is *NOT* just a camera company. They are an office equipment and medical equipment company that sells imaging equipment on the side (synergies FTW). Imaging in total is less than 1/3 of the business. Your cynicism is probably better channeled to the lament that there aren't any good office or medical equipment or imaging investments that link to their existing businesses.

A stock buyback means that cash is retained in the company as value rather than distributed as dividends. New shares can always be used later if needed.

I'm optimistic. Unlike Nikon that needs to restructure, and other makers that need to change direction, or Sony that can barely stay profitable, Canon is rolling along.

I know Canon's photo business is a small portion of their overall (imaging) business. History has shown that company that buyback their own shares on average have performed less well than those who did not.

Just wondering if a buyback is the best use of capital.