Share price falls after 'savage' note

Market watchers said the stock has been surprisingly resilient since falling 9 per cent on its first day of trading on 17 April.

But it fell 4.75 per cent to £14.45 after Collins Stewart analyst Gareth Thomas said the share price has been held up by the company’s buy-back programme, now 80 per cent complete.

A blog posting on The Guardian website said it was a “savage” sell note.

The broker said: “Since its disastrous first day of post-merger trading when it fell 9%, Thomson Reuters has performed relatively well, outperforming the FT All Share by 1.2%. Why is this? We don’t believe the company is less cyclical than the market, nor particularly cheap. But what may explain its resilience is a $500m buyback programme. But this is now 80% complete. There remains a risk that once it is finished, Thomson Reuters’ shares will fall to reflect its inherent cyclical risk.”

Collins Stewart reckons that the buyback has accounted for nearly 15 per cent of the daily volume in Thomson Reuters shares since the merger. At that rate it estimates the programme will be complete in 12 trading days.

“Given that there is a willing buyer in the market, Thomson Reuters itself, we recommend catching ‘em well (sic) you can, they’ll be gone in 12 trading days. Don’t wait to see if the buyback is holding the shares up; sell now.” ■