AGF Management Limited, a stalwart in the Canadian investment landscape, has long been known for its steady performance and diverse portfolio of financial products. A close look at their recent financial data, however, reveals a tantalizing trend, a hidden gem that seems to have slipped under the radar of most analysts. This unassuming detail, buried within the numbers, hints at a potential surge in AGF's profitability and a possible re-evaluation of their market position.

The secret lies in AGF Management's aggressive reduction of outstanding shares. While a share buyback program in itself isn't groundbreaking, the sheer scale and consistency of AGF's approach suggest a deliberate and strategic maneuver.

Looking at the chart above, we see a clear downward trajectory in the number of outstanding shares, particularly in recent years. In 2019, AGF Management had a staggering 78,280,700 shares outstanding. Fast forward to their most recent quarter, ending February 29, 2024, and that number has shrunk to 66,455,242. This represents a reduction of over 15% in just a few years.

Now, why is this significant? A reduction in outstanding shares has a direct and powerful effect on earnings per share (EPS). With fewer shares circulating, the company's net income is divided among a smaller pool, resulting in a higher EPS. This makes the company appear more profitable to investors, often leading to an increase in share price.

AGF's shrinking share count is already having a noticeable impact. Their EPS for the most recent quarter stands at $0.3418. Applying this EPS to the share count from 2019, their net income for the quarter would be approximately $26.7 million. However, with the reduced share count, their actual net income for the quarter is closer to $22.7 million. This means that, despite a slightly lower net income, AGF's EPS is significantly higher due to the share buyback program.

This trend, if sustained, could be a game-changer for AGF Management. A higher EPS makes the company more attractive to investors, potentially driving up demand for their stock. This could lead to a higher valuation and a stronger market position for AGF.

The implications are clear: AGF Management is playing a shrewd game. By systematically reducing their outstanding shares, they are silently boosting their EPS and enhancing their appeal to investors. This strategy, if continued, could result in a substantial increase in their share price and a significant shift in their market perception.

This, however, is more than just a numbers game. AGF Management's commitment to this strategy suggests a strong belief in their own future prospects. They are essentially putting their money where their mouth is, betting on their ability to deliver strong performance and increase profitability in the coming years.

"Fun Fact: Blake Goldring, the Executive Chairman of AGF Management, is a member of the Order of Canada, one of the country's highest civilian honors, recognizing his outstanding contributions to the financial industry and his philanthropic endeavors. Learn more about Blake Goldring's contributions."

This quiet move by AGF Management to bolster its EPS might be a sign of things to come. It's a subtle yet powerful strategy that could pay off handsomely for investors who recognize its potential. While Wall Street may still be oblivious, those who pay close attention to the numbers could be in for a pleasant surprise.