RE:RE:RE:RE:RE:RE:RE:Share buy backsThe operative word there is "should".
If a company buys back its shares and doesn't just reissue them as stock grants to management and employees, then the total number of shares
should go down and metrics like earnings or cash flow per share
should go up. At that point,
if the market continues to apply the same multiples to those metrics, then the stock price
should go up. The theory is correct, but it still depends on the market behaving rationally and paying a higher price. Meanwhile, if the company pays a dividend then I know that the dividend amount
will hit my bank account every month.
Personally, I'm happy with the company's current approach that balances out debt reduction with both dividends and buybacks.
MadeInHeaven wrote: You all miss the point. If company buyback 10% in ideal scenario based on the same market cap price should go up 11.1% if 20% price up 25% if 30% buyback price should go up by 43% etc this is advantage over dividend that share price increase goes parabolic if company buys back 90 % of the shares price should be up 900%.