Dark pool activity was detected in BPOP stock on January 10, 2020, in after-hours trading.
The dark pool print occurred in after-hours trading so it’s hard to say if this was a delayed print from earlier in the day. Dark pools don’t have to report trades in real-time but most of them do now after increased public and SEC scrutiny over the last couple of years. With that said, if the dark pool print was reported to us in real-time, we think it was probably a buy order because of how BPOP stock responded immediately after the print.
Another reason we think the dark pool trades in BPOP stock were buy orders is that we’ve identified a news catalyst. Last week, the company announced that it plans to raise its dividend from 30c per share to 40c per share and it plans to repurchase up to $500 million of common stock. Stock dividend hikes and share buybacks are also powerful catalysts that will power a stock higher. We think it’s likely that large players liked this news last week and are buying the stock over dark pools.
On January 9, 2020, Popular, Inc. (NASDAQ: BPOP) announced the following planned capital actions for 2020:
- An increase in the Company’s quarterly common stock dividend from $0.30 per share to $0.40 per share, commencing with the dividend payable in the second quarter of 2020, subject to the approval by the Company’s Board of Directors.
- Common stock repurchases of up to $500 million.
“We are pleased to announce our proposed capital actions for 2020 which are in line with our continued goal of delivering enhanced shareholder returns while maintaining prudent capital levels,” said Ignacio Alvarez, President & Chief Executive Officer. “This increase in capital return to our shareholders reflects Popular’s strong financial and capital position. We remain focused on executing our strategic initiatives in order to continue driving long-term shareholder returns.”
Common stock repurchases may be executed in the open market or in privately negotiated transactions. The timing and exact amount of the share repurchases will be subject to various factors, including market conditions and the Company’s capital position and financial performance.
The announcement of the planned common stock repurchases follows the non-objection from the Board of Governors of the Federal Reserve System.
The Company also announced that, on December 12, 2019, the Company completed the previously announced $250 million accelerated share repurchase transaction (“ASR”) with respect to its common stock. In connection therewith, the Company received an initial delivery of 3,500,000 shares of common stock during the first quarter of 2019 and received 1,165,607 additional shares of common stock on December 12, 2019. The final number of shares delivered at settlement was based on the average daily volume weighted average price of its common stock, net of a discount, during the term of the ASR, which amounted to $53.58. The Company accounted for this as a treasury stock transaction.
We absolutely love the revenue growth we’re seeing from Popular, Inc. (NASDAQ: BPOP).
Revenue has grown by 10.75% in the past year. Over the past 5 years, BPOP shows a strong growth rate of 13.16% on average per year.
Popular Inc. CEO Ignacio Álvarez says increasing Puerto Rico’s labor participation rate from 40% to 50% or 55% would do more for the economy than an influx of federal funds. The CEO says its bank clients are trending higher even though the population of Puerto Rico is down.
Popular Inc’s decision to increase its dividend and share buyback is likely from a letter from Raging Capital on December 9, 2019.
On December 9, 2019, Raging Capital announced that it has delivered a letter to the Board of Directors of Popular Inc which stated in part: “Raging Capital Management is a long-term shareholder of Popular and currently owns approximately 700,000 shares of common stock of the company. We believe BPOP is significantly undervalued and we call upon you, in your capacities as directors of the company and fiduciaries of all shareholders, to take timely and aggressive action to unlock shareholder value. Specifically, we call upon the Board to: Adopt a $1 billion stock repurchase plan (representing ~20% of the float), at a minimum, to be executed over the next two years; and Double the current dividend payout ratio. These two steps would materially boost BPOP’s annual earnings power to over $8 per share and return on equity to more than 15%.”
What’s Next? Make Sure To Review This Lesson On Dark Pool Trading!