October's Largest Buybacks (PPG, OKE, CY, EBAY, WTW, EMC, KO, VAL, WAG, IRM, FDO, CVX)

Despite the rise of the stock market, many companies are continuing to repurchase their shares in the open market.  Many investors prefer dividends over buybacks, but asking which is a better reward for shareholders depends solely upon whom you ask.  While these are not all of the buybacks throughout October, we have tracked some key buybacks from the likes of PPG Industries Inc. (NYSE: PPG), ONEOK Inc. (NYSE: OKE), Cypress Semiconductor Corporation (NYSE: CY), eBay Inc. (NASDAQ: EBAY), Weight Watchers International, Inc. (NYSE: WTW), EMC Corp. (NYSE: EMC), Coca-Cola Company (NYSE: KO), Valspar Corporation (NYSE: VAL), Walgreen Co. (NYSE: WAG), Iron Mountain Incorporated (NYSE: IRM), Family Dollar Stores, Inc. (NYSE: FDO), and Chevron Corp. (NYSE: CVX).

We have offered color on each with applicable data on how each compares to size and volume, along with other statistical reference.

PPG Industries Inc. (NYSE: PPG) approved an additional 10 million shares of outstanding common stock, effective immediately and without an expiration.  Back in December 2009,  PPG authorized 5 million shares in a buyback and approximately 3.1 million shares of that plan are still available for repurchase.  Average volume here is 1.2 million shares and the market cap is $12.65 billion.  This is large in dollar terms, but not a massive game-changer on its float if it buys shares back at roughly the same rate it has.  At $76.60, the 52-week range is $55.89 to $77.95.

Natural gas distributor ONEOK Inc. (NYSE: OKE) has approved $750 million over a three year period.  The market cap here is $5.33 billion and with shares at $50.05 the 52-week trading range is $29.56 to $50.85.  This buyback is large in size and large in scope as the current share price would retire 14% of the stock based on today’s prices and the buyback represents over 22 days worth of trading volume.

Cypress Semiconductor Corporation (NYSE: CY) may have found an alternative to M&A.  After announcing a buyback plan of up to $600 million, the market cap today is only about $2.15 billion.  At $13.35, the 52-week trading range is $8.05 to $13.89.  This won’t happen overnight as the cash and equivalents on the books come in at about $279 million.

eBay Inc. (NASDAQ: EBAY) rose after earnings, but the buyback and leveraging of the books may have contributed more than anything here along with $300 million spent buying back stock in the last quarter.  eBay said that the company authorized up to $2 billion for additional share buybacks.  It also authorized a commercial paper program of up to $1 billion and has approved the sale of up to $1.5 billion in term-debt financing under an existing shelf registration.

Weight Watchers International, Inc. (NYSE: WTW) approved a buyback plan of up to $250 million, which is a combination and add-on to a prior share buyback plan.  This represents 10% of the implied shares that could be bought back and at current prices it represents almost 29-days worth of volume.

EMC Corp. (NYSE: EMC) announced $1 billion for buybacks, which is large only in the nominal amount that it has ‘billion’ in it.  With a $43 billion market cap, this is probably just an offset to stock options.  Maybe it should consider a dividend instead.

Coca-Cola Company (NYSE: KO) gave an important buyback update this week.  The company had not been repurchasing shares due to its CCE deal.  The company has targeted $2 billion for share buybacks, but this is very accelerated because that is to be completed by year-end.  This represents about 4-days worth of trading volume between now and year-end.  Also worth noting is that shares hit a 52-week high and it is still buying the stocks back.  With shares still down so much from all-time highs, maybe this will get Buffett’s pick back in favor.

Valspar Corporation (NYSE: VAL) may not be the most known name for the public in coatings, but the company authorized a share buyback plan of 15 million shares.  This represents about 15% of its outstanding shares and represents close to 27 days worth of trading volume.

Walgreen Co. (NYSE: WAG) is not large in scope of the size of the company because the market cap is $32.9 billion.  But a $1 billion buyback has be noted either way, roughly 3% of the outstanding shares.  This represents about 4 trading days worth of share volume.

Iron Mountain Incorporated (NYSE: IRM) has a $4.5 billion market cap, so $200 million may not sound huge.  The prior $150 million buyback plan had $55 million remaining to be purchased.  This adds to the prior plan.  What is interesting here is that Iron Mountain shares are still close to 52-week lows and it remains a Warren Buffett holding.

Family Dollar Stores, Inc. (NYSE: FDO) already had a $750 million share buyback plan, but the company entered into an accelerated share  buyback plan of $250 million that was deposited with Wells Fargo Bank to buy more shares faster.  The market cap is now $5.9 billion and at $45.51 the 52-week trading range is $27.15 to $46.43.

Chevron Corp. (NYSE: CVX) is deciding to aggressively repurchase shares.  Earlier this month, the company announced that it would buy between $500 million to $1 billion in common stock each quarter ahead.  The plan will also begin this quarter.  The problem is this… with a $169 billion market cap, this buyback plan would take more than 40-years to take out the share count.  Again, maybe a larger dividend would have been better.

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JON C. OGG