7 Perfectly Timed Buybacks
I hope I'm preaching to the choir when I say that the current market panic is the perfect time to buy stocks.
After all, we're all aiming to buy low and sell high, right? There's no better way to do that than by starting with ridiculously low prices.
What's good for the buck is good for the doe: Some companies are taking advantage of low share prices. New and re-upped share-buyback plans are all the rage right now.
Have a gander at these opportunistic businesses:
Company | 1-Month Return | Buyback Increase (Millions) | Market Cap (Billions) | CAPS Rating (out of 5) |
|---|---|---|---|---|
AOL (NYS: AOL) | (46%) | $250 | $1.2 | * |
Century Aluminum (NAS: CENX) | (30%) | $60 | $0.98 | *** |
Akamai Technologies (NAS: AKAM) | (28%) | $250 | $4.1 | **** |
Southwest Airlines (NYS: LUV) | (25%) | $500 | $6.7 | *** |
TiVo (NAS: TIVO) | (23%) | $100 | $0.95 | ** |
iStar Financial (NYS: SFI) | (22%) | $65 | $0.58 | ** |
JA Solar (NAS: JASO) | (11%) | $100 | $0.7 | **** |
Data from Capital IQ (a division of Standard & Poor's), Google Finance, and Motley Fool CAPS.
Most of the buybacks cover less than 10% of available shares, but some are more audacious: iStar Financial wants 11% of its capitalization back, TiVo is grabbing just over 10% with a brand-new repurchase program, and AOL's buyback is the biggest potential difference-maker, at a jaw-dropping 20.8% of the current cap.
TiVo CEO Tom Rogers explains the motivation behind his shareholder-friendly move: "We believe that the repurchase of our common stock represents one effective use of our capital and underscores our commitment to maximize value for our shareholders, given the significant recent market weakness and the cash on our current balance sheet."
In other words, the stock is cheaper than it should be, and we're taking advantage of that -- thank you very much. In general terms, he's speaking for all of these buyback-crazy companies.
A generous and opportunistic buyback policy doesn't make an entire investment strategy, but it's a good place to start looking for your own opportunistic investment. Here's a handful of other ways to find bargains in this market:
At the time thisarticle was published Fool contributorAnders Bylundowns shares of TiVo but holdsno other position in any of the companies discussed here.Motley Fool newsletter serviceshave recommended buying shares of Southwest Airlines and formerly recommended Akamai but don't anymore. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. You can check outAnders' holdings and a concise bio, follow him onTwitterorGoogle+, or peruseour Foolish disclosure policy.
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