Tag: stock buybacks

The Stock Buyback Scam

The Stock Buyback Scam

Prior to the 2008-2009 Financial crisis, stock buybacks were typically used by management teams to offset options dilution and to acquire undervalued company shares. Today, companies primarily use stock buybacks to goose the value of CEO options packages as well as to goose the value of shares held by CEOs and large institutional holders. The … Continue reading The Stock Buyback Scam

The Forever Bubble-Blowing Fed

The Forever Bubble-Blowing Fed

The Fed's behavior in recent months has been something out of a horror movie. The low interest rate, expansionary monetary policies introduced by former Fed Chair Bernanke and continued by former Fed Chair Yellen have dramatically accelerated under current Fed Chair Powell. Bernanke dealt in $Billions, Chairman Powell prefers $Trillions. Click any of the charts … Continue reading The Forever Bubble-Blowing Fed

Binging On Buybacks At Innovation’s Expense

Binging On Buybacks At Innovation’s Expense

Short-term greed has gripped some of the world's largest Technology companies. A number of CEOs and Boards are guilty of trading long-term innovation and customer value for short-term share price support. Innovative companies (we provide examples), have bucked the buyback trend. Record high corporate debt levels have funded record share buyback activity in recent years. … Continue reading Binging On Buybacks At Innovation’s Expense

Now Would Be A Good Time To Execute That Stock Buyback

Now Would Be A Good Time To Execute That Stock Buyback

We prefer dividends, investment in R&D and M&A programs to share repurchases. However, for those companies that include share repurchases as part of their capital allocation strategy, today would be a good day to exercise a portion of that repurchase authorization. Markets hate uncertainty. Markets like it when companies and insiders step-up and buy their … Continue reading Now Would Be A Good Time To Execute That Stock Buyback

Insider Selling & Share Repurchases – A Corporate Governance Problem

Insider Selling & Share Repurchases – A Corporate Governance Problem

It is a corporate governance problem when insiders sell shares in the face of share repurchase programs. Take the example of Copart (ticker: CPRT). CPRT insiders have not purchased any shares over the past several years, yet they have done plenty of selling. Further, CPRT share repurchases helped support the stock while insiders sold (see … Continue reading Insider Selling & Share Repurchases – A Corporate Governance Problem