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Investing

Is The Market Against Share Buy-Backs?

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By Douglas A. McIntyre Published

The Wall Street Journal makes the point that the markets are starting to turn against share buy-backs. And, in the case of companies like Fannie Mae (FNM) or Freddie Mac (FRE), that may make sense. But, most shares buy-backs are still a good deal for stock holders as companies that have large cash position and stocks that may be down. Or, companies that simply have more cash than they can ever use.

Hewlett-Packard (HPQ) has certainly made a good decision to bring in shares. It throws off huge amounts of cash and the move increases EPS. Target (TGT) is not dong well, but with a strong balance sheet, it can bring in shares which its board thinks are cheap now. When retail rebounds, they are likely to look smart.

Share buy-backs are actually likely to increase if the market drops more. Companies with the money will view their shares as the best deal in town. And, that is not a bad way to get rid of some cash that earns 5% in the bank.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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