Monday, December 23, 2013

Stock Buybacks Continue At A Strong Pace Through The Third Quarter

Today, S&P Dow Jones Indices reported preliminary buyback activity through the third quarter of 2013 continued at a strong pace. S&P noted in the report that buybacks are at their highest level since the fourth quarter of 2007. A couple of notable facts from the report,
  • "For the 12 month period (ending September 2013), S&P 500 issues increased their buyback expenditures by 15.0% to $445.3 billion from the $387.3 billion posted in the prior 12 month period. The high mark was reached in 2007, when companies spent $589.1 billion over the 12 month period. The recession low point for a quarter was $24.2 billion, recorded in the second quarter of 2009."
  • Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, notes, "...we are starting to see excess buying, where the repurchases outnumber the issuance, and therefore reduce the share count. The lower share count leads to higher EPS, and the market likes higher EPS (emphasis added)."
From The Blog of HORAN Capital Advisors

S&P 500 Stock Buybacks Increase In Third Quarter; Buybacks at
Their Highest Level Since the Fourth Quarter of 2007
S&P Dow Jones Indices
By: Howard Silverblatt, Senior Index Analyst
December 23, 2013

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