You can't say companies are oblivious to how far their stocks have come.
Biomarin (BMRN) files 7.5 million shares, squelching that takeover rumor. U.S. Steel (X) puts out 17 million shares to fix that balance sheet, and B&G Foods (BGS) sells 3.75 million to help pay down long-term debt for that brilliant Green Giant acquisition from General Mills (GIS) . Oh, and Phillips 66 Partners (PSXP) just filed 6 million units to buy a pipeline as part of an ongoing consolidation.
These are all very smart. Biomarin has a big queue of clinical trials. Who knows how long the tariffs will last with China and Korea to keep out competing steel from America, which has boosted X's earnings, or at least cut its losses. B&G? I am surprised they waited this long. The stock is up 45% for the year. And, candidly, if I were them, I would have done a bigger one given that run. But then again, they did a 4 million share deal at $33.55 a share back in March. Still, when you are a little food company with $1.7 billion in debt, there's no time like the present to raise money.
The pipeline companies are right to do endless deals. The group is in favor enough that the market can bear it. That's when you have to issue paper.
I find that the enemy of the bull is often supply, so we have to monitor the amount of supply coming out regularly now. Three deals in one day's OK, especially given we have more IPAs being created each day than IPOs this year.
All I can say is the timing seems right, especially after that win-win Pioneer (PXD) equity offering as well as almost all the others in that segment.
Strike when the iron is hottest and you will never regret it.