Bekaert's Buybacks and Liquidity Maneuvers Signal a Bullish Turn—Time to Buy?

Bekaert (BEKR.BR), the global leader in advanced steel wire technologies, has been making bold moves in 2025 to reclaim shareholder value through strategic capital allocation. The company's recent share buybacks and nuanced liquidity agreements not only reflect management's confidence in its long-term prospects but also hint at a stock undervalued by the market. Let's dissect the data and see why investors should take notice.

The Buyback Blitz: Reducing Shares, Boosting EPS

Bekaert's share buyback program, launched in February 2025, has been aggressive. By June 4, the company had repurchased 1.82 million shares, representing 3.45% of outstanding stock, with a total consideration of over €8 million in the first half of 2025 alone. This isn't just about reducing dilution—it's a clear signal that management believes the stock is cheap.

The math here is straightforward: fewer shares outstanding mean higher diluted EPS. For instance, if Bekaert's earnings remain stable, reducing shares by 3.45% could boost EPS by roughly 3.5%—a tangible benefit for shareholders. This move isn't just about optics; it's a calculated play to reward investors while positioning the stock for upside.

The Liquidity Agreement: Balancing Market Stability

Bekaert's liquidity agreement with Kepler Cheuvreux SA adds another layer of strategy. While the buyback program cancels shares permanently, the liquidity agreement allows the company to buy and sell shares to stabilize the market. For example, in May 2025, Bekaert sold 3,500 shares on May 2–7 and 1,800 shares on May 8–14, but also purchased 2,800 shares during the latter period.

This balancing act is key. Selling shares under the agreement doesn't indicate doubt about the stock's value—it's a tool to ensure liquidity and prevent volatility. Meanwhile, the net purchases under the buyback program (over 1.5 million shares canceled by June 4) are the real driver of shareholder value. The result? A reduction in total outstanding shares from 54.3 million to 52.7 million, a 3% drop that amplifies EPS gains.

Why This Spells Undervaluation—and a Bullish Call

The market isn't pricing in Bekaert's strategic moves yet. At current levels, the stock trades at a P/E ratio of 14x, below its five-year average of 16x, despite strong cash flows and low debt. Management's aggressive buybacks suggest they see the stock as a steal at these prices.

Consider this: If Bekaert continues repurchasing at its current pace, it could reduce shares by another 2–3% by year-end, further boosting EPS. This creates a virtuous cycle: higher EPS attracts investors, lifting the stock price, which gives management more flexibility to buy back shares at cheaper prices.

The Bottom Line: Buy Now, Ride the Upside

Bekaert's actions are a textbook example of shareholder-friendly capital allocation. The 3.45% ownership reduction isn't just a metric—it's proof that management is laser-focused on value creation. With a strong balance sheet (debt-to-equity ratio of 0.3x) and a 5.96% dividend yield, the stock offers both growth and income.

Investors should initiate long positions now, especially with the buyback tailwinds and a P/E discount. The liquidity agreement ensures no wild swings, while the buybacks set the stage for EPS growth. This isn't just a stock to watch—it's a buy.

The message from Bekaert is clear: the stock is undervalued, and management is acting decisively. For investors seeking a blend of safety and growth, this could be a rare opportunity to buy low before the market catches up.

Action Item: Go long on Bekaert before the EPS boost from share cancellations and dividend payouts drives the stock higher. Set a stop-loss at -10% of your entry price and target a 15–20% return within 12 months.