If you’re looking for good penny stocks to buy, look no further. Deswell Industries announced that the company’s board of directors voted unanimously and approved a share repurchase program on the company’s common stocks. Deswell Industries is a penny stock which trades on the Nasdaq exchange under the ticker symbol DSWL.
The unanimous vote authorizes Deswell’s management to use corporate funds to purchase up to $4 million of the company’s outstanding common shares over the course of the next two years. Investors who are looking for good penny stocks will understand that when a company agrees to use its own funds to repurchase shares in the open market, fewer shares are available and the stock price usually goes up.
The repurchases of Deswell common stock are expected to be made occasionally in open-market transactions. The company is also planning to make repurchases in block transactions or through privately negotiated transactions. As with any stock repurchase, the timing, volume and nature of share repurchases are subject to management’s discretion and also dependent on market conditions.
It should be understood that the share repurchase program does not obligate Deswell to repurchase any particular number or dollar amount of its common stock and may be suspended, modified, extended or discontinued at any time.
The stock buyback plan affirms the confidence Deswell management has in the long-term prospects for their company. This is always a good indicator for investors considering an investment into Deswell. The company has a strong capital structure and liquidity which indicates that Deswell’s stock not only represents a good investment for the company, but also demonstrates the company’s commitment to increase stockholder value.
At the end of 2011, Deswell had roughly $28 million in cash and the company plans to use available cash balances to fund the share repurchase program.
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