Q: IIP today announced a stronger intention to buy back stock as they feel it is underpriced I assume they would be particularly interested if and when the stock price was below NAV. What is the NAV of interrent? Do you think they would buy stock even above NAV? Do you think this will be a meaningful number of shares purchased in 2005?
5i Research Answer:
Book value is in the $17 range, but book is not always a good indicator of actual value. At 17X cash flow, we would not particularly say the units are cheap. However, its distribution of 3.78% means its buyback plan is more related to the cost of capital and the offsetting distribution savings on units cancelled. Its unit count has risen every year of the past decade. It does have an automatic purchase plan in place now but we would not really expect drama here.