BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Buybacks signal bullishness]]>http://www.bloggingstocks.com/2007/06/20/buybacks-signal-bullishness/http://www.bloggingstocks.com/2007/06/20/buybacks-signal-bullishness/http://www.bloggingstocks.com/2007/06/20/buybacks-signal-bullishness/#commentsFiled under: ,

What is most spectacular about the buybacks announced this week is not just their size, but also that they are occurring in industries whose fundamentals are at a cyclical bottom or just beginning a cyclical upswing.
TheStreet.com has an excellent chart on share buybacks announced during the last few months.

Home Depot is buying back stock while the housing construction market is still bottoming, Expedia just started reported good results earlier this year and National Semi said in its most recent conference call that the wireless semiconductor market is exiting an industry bottom.

Why is there so much cash available for these massive share buybacks? Huge returns on invested capital (ROIC) is the answer. US companies have done a great job earning their cost of capital. Even if companies do not grow revenue quickly, as has been the case with Home Depot, they generate massive free cash flow. The same can be said of Expedia and National Semi.

The massive buybacks being announced just as industry fundamentals are bottoming or beginning an upswing is a very bullish signal for these stocks.

Buybacks signal bullishness originally appeared on BloggingStocks on Wed, 20 Jun 2007 13:36:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>buybackbuybacksdutch auctionDutchAuctionexpeexpediahdhome depotHomeDepotnational semiNationalSeminsmthe streetTheStreetWed, 20 Jun 2007 13:36:00 EST<![CDATA[Good sign for Microsoft: Shareholders aren't interested in selling]]>http://www.bloggingstocks.com/2006/08/18/good-sign-for-microsoft-shareholders-arent-interested-in-selli/http://www.bloggingstocks.com/2006/08/18/good-sign-for-microsoft-shareholders-arent-interested-in-selli/http://www.bloggingstocks.com/2006/08/18/good-sign-for-microsoft-shareholders-arent-interested-in-selli/#commentsFiled under: ,

microsoft

If you look at the insider sales at Google, there has been billions of stock dumped. Hey, I would too if I had cheap stock in Google.

As for Microsoft, it is doing just the opposite. It wants to buy back $40 billion of its stock.

Of course, this is no simple matter of, say, calling up a broker to make some trades. Rather, Microsoft had to do a so-called Dutch auction. Interesting enough, the company could not find many sellers of the stock (only about $3.8 billion at current prices). Basically, investors think there is upside with Microsoft.

Yet, Microsoft still needs to buy back this stock. In other words, we are likely to see a boost in the stock price. Also, as stock comes off the market, this helps boost earnings per share.

Something else about the lack of selling interest: this is a good sign that Microsoft's stock is at a support level. After all, it seems like much of the bad news is factored into the stock, such as its lagging performance against Google, as well as the delays with Vista.

Good sign for Microsoft: Shareholders aren't interested in selling originally appeared on BloggingStocks on Fri, 18 Aug 2006 11:54:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Dutch AuctionDutchAuctionGoogleMicrosoftFri, 18 Aug 2006 11:54:00 EST