The company sold off its global products business to Saudi Arabian energy company Saudi Aramco in March for $2.65 billion. The proceeds of the sale were used to fund the buyback, the company said in a press release.

“One billion dollars is a lot of money, considering the size of outstanding shares,” John Yackley, president and chief investment officer of Chicago-based asset management company Golden Horn Capital, told Lube Report.

Valvoline’s market capitalization is $6.2 billion, meaning the buyback returned more than 16% of its outstanding shares to the company.

“This is a strong signal from management that they think their stock price is cheap,” Yackley said.

Yackley explained that if Valvoline thought its stock price was fair to expensive, it could have simply left the proceeds from the sale of its global products business in the coffers and carried it as cash while looking for other ways to deploy the money.

The company announced in March that it was holding a modified “Dutch auction” tender offer to repurchase its common stock for no more than $40 per share or less than $35 per share.