Buyback stocks outperform the market year after year.However, just following Buyback announcements is not the best way to see investment gains related to buybacks.
This is true for 2 reasons:
- Not every company that announces a stock buyback actually follows through and executes the buyback as announced. Sometimes the actual number of shares purchased is far fewer than announced – converting a major buyback into a minor, insignificant one you should simply ignore.
- Many times, a company will cancel its stock buyback initiative – often, with no public announcement.
Therefore, the only way you’ll know for certain that a buyback has taken place is by looking at a company’s quarterly and annual reports. Well who has time for that?
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Announcements – We will keep you informed of the announcements corporations make related to their share repurchase plans.
Actual Repurchase Activity – We continue to monitor the companies that announce buyback plans to make sure they are actually repurchasing. It is the actual share repurchasing that can lead to an appreciable reduction in shares outstanding – which in turn can trigger a valuable move in the stock price beyond any move related to the buyback announcements.