6 Companies Buying Back Stock That Are Worth a Look
October 8, 2008 at 1:01 PMPosted by Thomas Catino
It’s encouraging to know that management is confident enough to buy back their own stock and put their money where their mouths are. Here is a brief list of stocks of stable, solid firms that should probably be at the top of anyone’s shopping list in this kind of market in addition to a couple of more speculative names.
1. Microsoft Corp. (MSFT): Hit a new 52-week low of $22.74 as the bear market did not leave any stock untouched. Trading at 10 times earnings with a good balance sheet and a $40 billion buyback is pretty much all that needs to be known.
2. Nike Inc. (NKE): Was able to beat Street expectations in the latest quarter, posting $5.4 billion in revenue and 47.2% gross profit margins, better than the $5.2 billion in revenue and 44.8% gross margin consensus analyst estimates, and more importantly in this economy, future orders rose 10%. Yet for all that, the stock has had an uncalled for 14 point “swoosh” lower since hitting a post-earnings high of $68.
3. Hewlett Packard Co. (HPQ): This tech name has lost 25% of its value since the end of September and similar to Microsoft, is trading at a historically low multiple of 10 times earnings. It recently approved an $8 billion share buyback plan.
4. International Business Machines Corp. (IBM): Has suffered greatly from rumors of an earnings warning, which at $90.85 a share should largely be reflected in the stock. Big blue announced earlier this year a new $15 billion repurchase program and expects to spend $12 billion of the buyback in calendar year 2008.
5. Sun Microsystems Inc. (JAVA): Revenue growth is minimal to non-existent for this tech company as the stock wanders back to pre-reverse split levels, but it does have $3.3 billion in cash and marketable securities and is using about $1 billion to repurchase shares - that’s significant when your market cap is just $4.4 billion.
6. Joy Global Inc. (JOYG): This volatile commodity name has gotten slaughtered but it recently doubled its stock buyback program to $2 billion which again should be intriguing because the stock has a market cap of just $3.3 billion.
1. Microsoft Corp. (MSFT): Hit a new 52-week low of $22.74 as the bear market did not leave any stock untouched. Trading at 10 times earnings with a good balance sheet and a $40 billion buyback is pretty much all that needs to be known.
2. Nike Inc. (NKE): Was able to beat Street expectations in the latest quarter, posting $5.4 billion in revenue and 47.2% gross profit margins, better than the $5.2 billion in revenue and 44.8% gross margin consensus analyst estimates, and more importantly in this economy, future orders rose 10%. Yet for all that, the stock has had an uncalled for 14 point “swoosh” lower since hitting a post-earnings high of $68.
3. Hewlett Packard Co. (HPQ): This tech name has lost 25% of its value since the end of September and similar to Microsoft, is trading at a historically low multiple of 10 times earnings. It recently approved an $8 billion share buyback plan.
4. International Business Machines Corp. (IBM): Has suffered greatly from rumors of an earnings warning, which at $90.85 a share should largely be reflected in the stock. Big blue announced earlier this year a new $15 billion repurchase program and expects to spend $12 billion of the buyback in calendar year 2008.
5. Sun Microsystems Inc. (JAVA): Revenue growth is minimal to non-existent for this tech company as the stock wanders back to pre-reverse split levels, but it does have $3.3 billion in cash and marketable securities and is using about $1 billion to repurchase shares - that’s significant when your market cap is just $4.4 billion.
6. Joy Global Inc. (JOYG): This volatile commodity name has gotten slaughtered but it recently doubled its stock buyback program to $2 billion which again should be intriguing because the stock has a market cap of just $3.3 billion.
Post a Comment
<< Home