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The companies below have announced substantial share repurchase plans. I regularly seek out companies that are enacting major company share buybacks to help me find stocks that might be undervalued. When companies buy shares back, it reduces the number of shares outstanding, which can increase the earnings per share over time. When a board acts to repurchase shares, it can be a sign that the company is undervalued, and it puts a floor under the stock price, so I think these companies are worth looking into as possible investments:
Myriad Genetics, Inc. (NASDAQ:MYGN) recently authorized a share repurchase of $100 million. Based on a market cap of about $1.76 billion, this would repurchase over 5% of the outstanding shares at current prices. MYGN shares trade for $19.52 per share. This company has plenty of cash on the balance sheet, so more repurchases are possible later. You can read about the share repurchase plan here: http://finance.yahoo.com/news/Myriad-Announces-New-100-pz-237423168.html?x=0&.v=1
Kroger (NYSE:KR) recently authorized a share repurchase of $1 billion. Based on a market cap of about $15 billion, this would repurchase around 6% of the outstanding shares at current prices. KR shares trade for $23.60 per share. You can read about the share repurchase plan here: http://finance.yahoo.com/news/Krogers-Board-of-Directors-prnews-1371866561.html?x=0&.v=1
Hewlett-Packard (NYSE:HPQ) currently has a $10 billion share repurchase plan authorized. Based on a market cap of about $93 billion, this would repurchase over 10% of the outstanding shares at current prices. HPQ shares trade for $42.61 per share. This company has plenty of cash on the balance sheet, so more repurchases are possible later. You can read about the share repurchase plan here: http://www.hp.com/hpinfo/newsroom/press/2010/100830c.html
Cisco Systems, Inc. (NASDAQ:CSCO) currently has a $10 billion share repurchase plan authorized. Based on a market cap of about $102 billion, this would repurchase around 10% of the outstanding shares at current prices. CSCO shares trade for $18.40 per share. This company has plenty of cash on the balance sheet, so more repurchases are possible later. You can read about the share repurchase plan here: http://www.rttnews.com/content/topstories.aspx?Id=1485590
Microsoft (NASDAQ:MSFT) currently has a $40 billion share repurchase plan authorized. Based on a market cap of about $218 billion, this could repurchase almost 20% of the outstanding shares at current prices. MSFT shares trade for $25.95 per share. This company has plenty of cash on the balance sheet, so more repurchases are possible later. You can read about the share repurchase plan here: http://www.thedailycrux.com/content/5754/Microsoft
Pepsico, Inc. (NYSE:PEP) currently has a $15 billion share repurchase plan authorized. Based on a market cap of about $101 billion, this would repurchase around 15% of the outstanding shares at current prices. PEP shares trade for $63.40 per share. You can read about the share repurchase plan here: http://www.businessweek.com/news/2010-03-15/pepsico-authorizes-15-billion-buyback-boosts-annual-dividend.html
BHP Billiton (NYSE:BHP) currently has a $10 billion share repurchase plan authorized. Based on a market cap of about $267 billion, this would repurchase over 4% of the outstanding shares at current prices. BHP shares trade for $95.76 per share. You can read about the share repurchase plan here: http://www.reuters.com/article/2011/02/15/us-bhpbilliton-idUSTRE71E27J20110215
International Business Machines (NYSE:IBM) currently has a $10 billion share repurchase plan authorized. Based on a market cap of about $197 billion, this would repurchase around 5% of the outstanding shares at current prices. IBM shares trade for $161.83 per share. This company has plenty of cash on the balance sheet, so more repurchases are possible later. You can read about the share repurchase plan here: http://www.businessweek.com/news/2010-10-26/ibm-adds-10-billion-to-its-share-repurchase-plan.html
AT&T (NYSE:T) currently has a $9 billion share repurchase plan authorized. Based on a market cap of about $165 billion, this would repurchase around 5% of the outstanding shares at current prices. T shares trade for $27.92 per share. You can read about the share repurchase plan here: http://blogs.barrons.com/techtraderdaily/2010/12/17/att-ups-dividend-okays-9b-of-share-repurchase/
While share repurchases do not guarantee a stock will go up, it does support the stock price, and can boost future earnings. It is good to see that while many companies are busy issuing more stock and diluting existing shareholders, these companies are putting some of their cash to work by buying stock.
The data is sourced from Yahoo Finance and company websites. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I am long CSCO, HPQ.
Source: 9 Stocks With Major Share Repurchase Plans