The upbeat perception for corporate profitability primarily relates to companies buying
back shares of stock.
The management has wisely bought
back shares of the stock at severely depressed levels, and doesn't seem to get too carried away with regular buybacks, preferring to return excess cash to shareholders in the form of special dividends (much preferred to buybacks).
The act of buying
back shares of stock is a separate capital allocation decision, regardless of the reason why you're buying those shares.
It will suppress their ability to buy
back shares of their stocks and inhibit necessary capital expenditures.
Not exact matches
Capping off 2017, the company say its
stock jump 3.9 % when Metro Inc. began selling
back the majority
of its Couche - Tard
shares — about $ 1.55 billion worth — to help fund its purchase
of sister drug store chain Jean Coutu Group Inc..
Citi, along with HSBC, Goldman Sachs, and Nomura, initially arranged the $ 1.8 billion loan,
backed by some 628 million
shares of Steinhoff's now - crippled
stock.
The company said in February that it planned to buy
back up to $ 5 billion
of stock over 2018 - 2020 to
share the benefits
of higher oil prices with investors.
Moreover, Boeing has been buying
back swaths
of its own
shares — a boon for both its shareholders and its
stock price.
The moves higher in the region came on the
back of U.S.
stocks finishing the Friday session little changed despite strong earnings as technology
shares pulled
back.
WA - based LNG Ltd has fallen
back to earth as an oversupply
of liquefied gas worldwide is hitting the
share prices
of gas - exposed
stocks.
On Monday, U.S.
stocks pulled
back from record highs, with the Dow and the S&P 500 indexes marking their biggest one - day percentage declines in about five months, weighed down by a slide in Apple
shares on reports
of poor iPhone X demand.
He referred to the trend
of companies buying
back their
shares to drive up their
stock price, instead
of making investments that will benefit the companies for years to come, as simply being unsustainable and dangerous.
We're
back in a frothy market where in stead
of being considered that they might be spending tons
of money winning
shares a company that one day could be worthless (like the
stock of many startup companies)-- they always believe they're fighting for millions.
Though the IPO only gave Rovio half the market value the company had hoped for ($ 900 million ($ 1.1 billion) instead
of its anticipated $ 2 billion),
stock bounced
back when a bank
backing the IPO started purchasing
shares to «stabilize» the price, according to Bloomberg.
He points out that the company's business model allows it to turn its inventory around about twice as many times as its peers and its strong free cash flow — the company has about $ 4
of cash per
share, he says — could be used to buy
back stocks, which it has done in the past.
Though the billionaire investor recently
backed down from his fight with Apple for a
stock buyback, he still may have won the battle; CEO Tim Cook announced Apple repurchased $ 14 billion
of its
shares.
Some foreign investors, rather than crunching data on earnings and
stock valuations to come up with investment strategies, actively mimicked the actions
of China's so - called «national team» — a group
of state -
backed financial institutions that were tasked with propping up
share prices in the height
of the market rout.
Disney also announced that it would buy
back $ 10 billion
of stock to offset the
share dilution from the deal.
Amgen, the biggest independent biotechnology company in the world, said it bought
back $ 10.7 billion worth
of stock last quarter — seven times bigger than its 2017 buyback and an 8.5 percent decrease in its total
share count.
That's why the «Mad Money» host
backed the
stock of Lowe's even when the retailer's
shares plummeted on Wednesday in the wake
of a weaker - than - expected earnings report.
Yahoo says it is buying
back 40 million
shares of stock owned by Daniel Loeb's Third Point for $ 29.11 a
share.
The uptick in investor confidence has brought the company's
stock back up after an October swoon that dropped
shares of Unilever more than 18 % in less than two months.
That's because many big enterprises regularly issue more
stock than they buy
back, using the proceeds for repurchase
of new
shares from newly exercised options and vested restricted
stock, for M&A, and for secondary offerings.
Finally, dividends can be reinvested
back into more
shares of dividend - paying
stock, supercharging your ability to build wealth.
Examples
of such projects providing marginal benefits are: improving financial reporting systems through better information technology, minor tweaks to supply chain logistics, cutting
back on marketing or increasing low - cost advertising (like social media), «rationalization»
of head count, holding average wages as low as possible, squeezing suppliers a little bit, not repatriating earnings to stave off taxation, refinancing rather than retiring debts, and the
share buyback that is insensitive to a company's current
stock price.
Echelon is now focusing its growth on «smart» commercial & municipal LED lighting (although its fab-less chip business has apparently now stabilized after a long decline), and if the lighting business accelerates (and it could, due to recent sales force hires and new products), I think there's a chance it can hit a break - even annualized revenue run - rate
of $ 40 million by Q4 - 2019 (pushed
back from my earlier hoped - for timeline) at which point — assuming $ 14 million
of remaining net cash (vs. an estimated $ 18 million at the end
of Q2 2018) and 4.7 million
shares outstanding (vs 4.52 million today), an enterprise value
of 1x revenue on this 53 % gross margin company would put the
stock in the mid - $ 11s per
share.
If Tim Hortons increased its ratio
of adjusted net debt to four times earnings with C$ 2 billion
of debt it could fund a special dividend
of $ 13 a
share or buy
back up to 23 percent
of the
stock, the note said.
In January 2014, the Company's Chief Executive Officer contributed 8,976,000
shares of preferred
stock back to the Company for no consideration.
After soaring 33 % after earnings yesterday, Intelsat (NYSE: I)
stock is giving
back some
of its gains today, with
shares down 9.4 % as
of 11: 15 a.m. EDT.
In January 2015, the Company's Chief Executive Officer contributed 5,068,238
shares of common
stock back to the Company for no consideration.
Figure 1 shows this value - destroying behavior in action for GE (GE) by comparing between the amount
of money spent buying
back shares and the price to economic book value (PEBV), a measure
of the growth expectations embedded in the
stock price.
For the first time since it went public, Snap Inc.
shares went
back down to $ 17, which is the price
of the company's
stock for its initial public offering in March.
In buying
back billions
of dollars worth
of stock last year, ORCL retired its
shares cheaply without compromising its ability to invest in future growth.
That means executives can pay employees (and themselves) with
stock instead
of cash, buy
back shares to offset the dilution, and increase these adjusted metrics without doing anything to improve real operating performance.
In 2015, CSCO bought
back 155 million
shares, but after the effects
of employee
stock compensation it only reduced the total
shares outstanding by 38 million.
Corporate raiders pay their high - interest bondholders, while financial managers also are using this ebitda for
stock buy -
backs to increase
share prices (and hence the value
of their
stock options).
The
shares used are for the purposes
of the
stock ownership plan, and the company pays
back the original loan with annual contributions, as it is able.
In the body
of the e-mail, Yaffe wrote «Just wanted to follow - up with you and put this to bed ASAP... In a perfect world would love to have you wire him
back $ 170,000 and gift him 15,000
shares of Retrophin
stock and that would fulfill the note obligation and more importantly doing the right thing and manning up as we spoke about.»
For example, when we put Amazon (AMZN) in the Danger Zone
back in May 2013, we highlighted that the current
stock price
of $ 267 /
share embedded the expectation that the company would grow profits by 25 % compounded annually for 25 years.
In 2015, ORCL bought
back $ 8.1 billion in
stock (5 %
of market cap), reducing
shares outstanding by nearly 120 million.
Aflac also announced a 5.4 % increase in their quarterly dividend to $ 0.39 a
share and increased the size
of their buyback plan from $ 1 billion to $ 1.2 billion which I like since it shows management is being smart when it comes to buying
back stock on cheap valuations.
To get more specific, our dynamic DCF model shows that even if we assume OCLR's NOPAT declines by 50 % in 2018 and takes a decade to get
back to current levels, the
stock has a present value
of $ 7.60 /
share, a 12 % premium to the current valuation.
When these loans became illiquid, and the firm had no ability to pay
back its creditors, Lehman Brothers experienced a credit crunch; it could no longer cheaply raise cash via debt issuance, and issuing
stock under such conditions led to both dilution
of shares and negative sentiment, which caused its
share price to fall.
In spite
of this long record
of federal support for profit
sharing and employee
stock ownership, the Federal Government has
backed off its support for broad - based employee
stock ownership and profit
sharing during virtually every recent Presidential administration for almost four decades, a trend that has lasted to the present.
Back in August
of this year, I
shared with you the comparison charts
of gold and silver
stocks.
Recommended Trade (based on the charts) Buy Price: If you want to get in on this trade, you can purchase
shares of HAL when the
stock pulls
back to the neckline
of the pattern breakout.
«When the board
of directors
of a company decides to buy -
back its
stock in the open market, it may well be a sign that they believe the
shares are undervalued and do not adequately reflect the prospect for growth.
While the points made by these gentlemen are both valid and critically important, they fail to take note
of four other dangerous subsidies: (1) the market perception that the Washington and Wall Street revolving door has rendered these firms immune from prosecution — even for repeated, illegal cartel behavior; (2) the ability to spend billions buying
back their own
stock, effectively propping up their own
share price and bad behavior; (3) self - regulation with compromised bodies creating the market perception and reality
of a competitive edge; and (4) Congress and the Supreme Court tolerating Wall Street running its own private justice system (mandatory arbitration) where corrupt acts are kept hidden from public view until they blow up into catastrophic events to the economy.
Short sellers profit when the price
of a
stock (or another asset) falls; they accomplish this by borrowing
shares, selling them, and buying them
back later to return to the original owner.
Offering bank investors a view
of the company
stock, Dimon contended that it still made financial sense for JPMorgan to buy
back shares «even at or above two times tangible book value» per
share, which was $ 53.56 at year - end.