In fact, this may explain why companies have been borrowing to
buy back stock in the past several years.
Corporate financial managers, for example, can raise their company's stock price simply by
buying back shares from investors — financing the move by borrowing money.
Given the substantial discount to its current asset backing, any shares
bought back at these levels have a huge positive effect on its per share value.
But be mindful of the superficial loss rule, which prevents investors from selling a stock to claim a loss and
then buying it back in right back.
Every good management team should have their schedule of possible projects for investment, but always recognize there is the alternative
of buying back stock as a last resort.
The one important catch is that when you sell a security to claim a capital loss, you can't
buy it back for at least 30 days.
We always recommend betting against the public and
buying back on artificially inflated lines.
With the company trading significantly below net cash / investments per share management has a great opportunity to create value
by buying back shares, or paying a special dividend.
It even had enough left over to fund some expansion projects and
buy back $ 250 million in stock.
Good companies don't report earnings in excess of what shareholders obtain, and they do
n't buy back stock except when it is cheap.
My general rule for
buying back options is to do so if the position reaches 75 % of the max gain prior to expiration.
It's a common practice for clubs to sell young talents
with buy back clauses inserted so they can buy the player back if they do turn out to be world class.
This is a phenomenon where the stocks that were dumped at the end of one year in order to make portfolios look better are
bought back up at now cheaper rates.
When things get cheap enough, people start
buying back into that market and then everyone starts to pile in.
Not only is the company increasing their dividend but they are also
buying back more shares in an effort to return as much capital as possible to shareholders.
Companies have been using stock
buy backs as an alternative to dividends for years.
Once you receive the borrowed equity, immediately sell it before
buying it back later at a lower price.
They also announced a new $ 1 billion dollar
buy back program but as great as that is I am way more interested in the dividend.
Only buy back when there is a significant discount to the fair market value of the firm.
As long as I didn't
buy it back after this loss, I can claim this $ 50 loss as capital loss.
I sold my disc long ago, and I've been debating lately on if I should
just buy it back.
Open - end funds
also buy back shares when investors wish to sell.
A few months after we bought it and began renting the units, the previous owner approached us
about buying it back for basically the same low price that we paid for it.
An excellent strategy is to find companies whose shares are very cheap already (like the banking sector) and invest in those companies taking advantage by
aggressively buying back shares.
They would then get to keep living in their homes, the company was supposed to keep them out of foreclosure and then one
day buy back their home.
So buying back stock is a great option — you can do the math yourself.
Well, I can sell the stock at a loss and then
buy it back again, but I can't take the loss off my taxes.
Wouldn't it be smarter to cash out and wait for the next market to fall
before buying back in at much lower prices?
When things get cheap enough, people
start buying back into that market and then everyone starts to pile in.
A shareholder friendly management team,
which buys back shares and pay a decent dividend.
Those who sold to developers for $ 75,000 an acre a few years ago are
now buying it back for $ 15,000.
You'll want to be careful to avoid a superficial loss, which occurs when someone sells a stock and then
buys it back within 30 days.
The store might ask a designer to
buy back what it did not sell or to accept a smaller cut of the profits.
Once you've sold them all,
buy them back all at once at his reduced price and repeat the process.
Or should the
investor buy back the short put and risk tying up even more money in a losing position?
Banks have also kept underwriting standards tight in recent years due to uncertainty about whether they'll be forced to
buy back loans made in the housing boom.
You can also buy the current issue for 99 cents, although unfortunately, you can't
buy back issues or choose to «start» your subscription elsewhere than at the current issue.
If it can raise the dividend significantly over a couple years or so I'd strongly
consider buying back in.