Money and Finance
Companies have a few options when it comes to creating shareholder value. The most important is the ability to improve the underlying operations of the company through growth. My favorite is through dividends and of course share buybacks are another option. I want to ignore the dividends for the time being and focus on growth and share buybacks.
When a company is growing and able to buy back shares at a cheap valuation, shareholders win. You benefit from both the underlying growth of the company and a lower share count. That's the icing on top of the cake that can lead to out-sized returns over the long haul. While a decreasing share count is excellent, you now own more of the same company, that's not the be all and end all when it comes to analyzing a share buyback program.
Let's take a look at one of my holdings, Visa.
Read more »
- Share Repurchase From All Angles: Assessing Buybacks, No Matter Where You Sit - By Michael Mauboussin
In his latest strategy piece, Share Repurchase from All Angles: Assessing Buybacks, No Matter Where You Sit, Michael Mauboussin discusses the sometimes misused and misunderstood importance of share buybacks to maximize long-term value for shareholders...
- Exxon Mobil's Dividend Could Be In Danger
Earlier this month, Exxon Mobil (NYSE:XOM) reported Q4 2015 earnings which, as expected, looked ugly considering the large decline in the price of oil over the last one and a half years. Exxon Mobil has long been one of the largest repurchasers of shares,...
- Buybacks Aren't Doing Much For Shareholders Right Now
"If everyone is doing (buybacks), there must be something wrong with them." - Henry Singleton, former Teledyne CEO (profiled in The Outsiders) With the exception of 2009, gross buybacks have outpaced dividends paid by U.S. companies each year since...
- Can A Total Shareholder Yield Etf Work?
A rare mid-week post, but earlier today I read an interesting article on Forbes about the Cambria Shareholder Yield ETF (SYLD), which was based on an interview with the Cambria CIO. So I decided to dig into the story a little this evening. The SYLD...
- Seventh Pick In The Wmd Portfolio - Occidental Petroleum
The more real they are, the more fun blogs are to follow. So in that spirit, rather than talking about ideas in the abstract I maintain a hypothetical portfolio to track ideas where I'll semi-regularly (and hypothetically) invest and track buying...
Money and Finance
How effective are those share buybacks?
Companies have a few options when it comes to creating shareholder value. The most important is the ability to improve the underlying operations of the company through growth. My favorite is through dividends and of course share buybacks are another option. I want to ignore the dividends for the time being and focus on growth and share buybacks.
When a company is growing and able to buy back shares at a cheap valuation, shareholders win. You benefit from both the underlying growth of the company and a lower share count. That's the icing on top of the cake that can lead to out-sized returns over the long haul. While a decreasing share count is excellent, you now own more of the same company, that's not the be all and end all when it comes to analyzing a share buyback program.
Let's take a look at one of my holdings, Visa.
Read more »
- Share Repurchase From All Angles: Assessing Buybacks, No Matter Where You Sit - By Michael Mauboussin
In his latest strategy piece, Share Repurchase from All Angles: Assessing Buybacks, No Matter Where You Sit, Michael Mauboussin discusses the sometimes misused and misunderstood importance of share buybacks to maximize long-term value for shareholders...
- Exxon Mobil's Dividend Could Be In Danger
Earlier this month, Exxon Mobil (NYSE:XOM) reported Q4 2015 earnings which, as expected, looked ugly considering the large decline in the price of oil over the last one and a half years. Exxon Mobil has long been one of the largest repurchasers of shares,...
- Buybacks Aren't Doing Much For Shareholders Right Now
"If everyone is doing (buybacks), there must be something wrong with them." - Henry Singleton, former Teledyne CEO (profiled in The Outsiders) With the exception of 2009, gross buybacks have outpaced dividends paid by U.S. companies each year since...
- Can A Total Shareholder Yield Etf Work?
A rare mid-week post, but earlier today I read an interesting article on Forbes about the Cambria Shareholder Yield ETF (SYLD), which was based on an interview with the Cambria CIO. So I decided to dig into the story a little this evening. The SYLD...
- Seventh Pick In The Wmd Portfolio - Occidental Petroleum
The more real they are, the more fun blogs are to follow. So in that spirit, rather than talking about ideas in the abstract I maintain a hypothetical portfolio to track ideas where I'll semi-regularly (and hypothetically) invest and track buying...