Not exact matches
With
stocks in general still trading so high, investors are best off ignoring the short - term hype around
buyback announcements and
instead taking a closer look at companies on repurchasing binges to see if their share prices have more room to run.
A
stock buyback is basically a secondary offering in reverse —
instead of selling new shares of
stock to the public to put more cash on the corporate balance sheet, a cash - rich company expends some of its own funds on buying shares of
stock from the public.
Instead of stimulating investment in the real economy, low interest rates have fueled
stock buybacks, M&A, and financial engineering more generally.
If
instead we use total expenditures on dividends plus net
stock buyback cash plus change in total debt divided by market capitalization, we don't need to worry about changes in share count due to
stock splits.
Instead, the company stepped up its
stock buybacks, leading to a 3 % decline in the share base.
If the company
instead devotes the cash to a
stock buyback, you have two options:
Outerwall hasn't been liquidating itself through
buybacks —
instead it has leveraged the balance sheet by issuing large amounts of debt, using the proceeds to buy back
stock, which has reduced the share count, but not the size of the balance sheet or the amount of capital employed.