QUOTE(abbyjoseph @ Feb 7 2014, 06:21 AM)
As evidence of the fervor that corporations have to try to keep shareholders happy, 3M Company (MMM) just announced that its board of directors authorized another major share repurchase program.
The company bought back $5.2 billion worth of its own shares in 2013 and can now repurchase up to $12.0 billion.
Stock buybacks are an old-school business strategy. Excess cash that management feels isn’t worth investing in new businesses, plant, equipment, and employees is simply allocated back to shareholders.
And whatever the endgame is for company management—to boost a falling share price, pay for dividends, meet earnings guidance or simply because it’s the easiest thing to do—share repurchases work for investors.
The stock market is a secondary market where share prices reflect relative values until a company becomes non-public (i.e. is taken private).
Some view share buyback programs as a tool a public company can use to prop up its earnings results, but in the large-cap space, this isn’t the case. The fact of the matter is that big business generates a lot of cash and cash management has been and will continue to be one of the main operations (usually part of the executive branch) of a company.
Continue Reading : http://www.profitconfidential.com/stock-ma...y-buying-stock/
There’s lot of advice out there on how to invest, when to invest, what to invest in, and even why to invest. Enough books have been written on the stock market to fill libraries (or flash drives, these days), yet many investors struggle to keep up with today’s turbulent markets. One of the reasons for this is that it can difficult to judge exactly what steps to take when looking to invest in a given stock. By the way very nice article.