News Stocks 

Many are saying we are at ‘peak earnings.’ Here’s why we are not

“Despite many positive signs for the economy and earnings, a small but significant group is insisting we are near “peak earnings.”” writes Michael Nagle for cnbc.com. They believe that earnings will be topping out in the next few quarters and the rate of growth in earnings will slow.Everyone on the Street knows we are expecting phenomenal earnings growth this quarter.”You will have more difficult comparisons in 2019,” Christine Short, who follows corporate earnings for Estimize, told CNBC. “The benefits from tax reform will wane some in 2019. Source: cnbc.com Share This:

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Traders pin hopes for rally on company plans for buybacks and capital spending

“Traders are relieved that there is finally a chance to change the conversation from the chaos of trade wars to the calm of revenue and profit” writes unknown author for cnbc.com. “Unless something goes badly awry, companies are really looking strong this year,” Christine Short from Estimize told CNBC. The numbers are phenomenal: Earnings estimates for the first quarter were already strong at the end of the third quarter — analysts were forecasting an increase of 10.6 percent for Q1 — as the U.S. and global economy continued to expand. Source:…

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Markets News Stocks 

The tumbling stock market is stuck in free fall without its most important safety net

“If the stock market is to recover from its ongoing free fall, it’ll have to do so without its most important buyer: companies themselves” writes Joe Ciolli for businessinsider.com. Overall, even as stock market pressures mount, there are still plenty of experts forecasting a full recovery for stocks sometime this year.This is a big deal — and a potentially grave situation — for the stock market. But as the specter of a trade war grows larger, it will get increasingly difficult to rationalize being a bull in this environment.In a…

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News Stocks 

CITI: There are 2 ways America’s biggest companies dole out cash to shareholders — and one is way better than the other

“There are two primary ways public companies return capital to their shareholders: by paying out dividends or buying back shares” writes Akin Oyedele for businessinsider.com. Examining share-price performance is the most useful way to assess which is better between buybacks and dividends, Levkovich said.When companies throw cash at their own stock, they reduce the number of shares outstanding and signal their stock is undervalued.”Episodic buybacks are less interesting to us versus companies that seem to have the excess cash flow and strategic desire to return cash regularly.But the chart below…

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News Stocks 

21 stocks set to surge as companies spend billions buying their own shares, according to Deutsche Bank

“These are high free-cash-flow yield, low capex relative to sales, high return on equity, low debt leverage, and strong price momentum” writes Business Insider for businessinsider.com. Several companies have said they plan to spend the gains from tax cuts on paying debt, capital investments, dividends, and buying back their stocks.In recent years, share buybacks have been a key source of support for the stock market’s gains. Source: businessinsider.com Share This:

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Markets News 

S&P 500 companies expected to buy back $800 billion of their own shares this year

“S&P 500 companies will buy back a record $800 billion of their own shares in 2018, funded by savings on tax, strong earnings and the repatriation of cash held overseas, J.P. Morgan said Friday” writes Ciara Linnane for marketwatch.com. INTC, +1.14% Read also: These companies spent over $1 billion buying back shares while their CEOs were dumping them It also includes Lam Research Corp.Analysts are expecting a combination of improving economic growth and lower taxes to contribute $100 billion of buybacks.That will far exceed the $530 billion in share buybacks…

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Markets News Stocks 

Companies projected to use tax cut windfall for record share buybacks, JP Morgan says

“Breaking it down, J.P. Morgan expects companies to dedicate $100 billion generated through tax cuts and resulting stronger earnings plus $200 billion from the repatriation windfall” writes Michael Nagle for cnbc.com. J.P. Morgan strategists estimate that firms in total will authorize at least $800 billion of buybacks, a whopping 51 percent increase from 2017.”Corporates tend to accelerate buyback programs during market sell-offs,” Dubravko Lakos-Bujas, U.S. head of equity strategy at J.P. Morgan, said in a note to clients.During the nearly completed fourth-quarter earnings season, companies already have announced a record…

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Markets News Stocks 

Executives aren’t buying their company’s shares after market correction

“Corporate executives aren’t using their own personal funds on average to buy their company’s stock during the market swoon, according to a research firm” writes Michael Nagle for cnbc.com. Companies have bought back $113.4 billion of their own shares this month, good for the highest total since April 2015, according to market data firm TrimTabs.In contrast, Argus Research said its Vickers’ overall Insider Index, a measure of insider buying by corporate executives, went negative this week for the first time since August 2017.”Insiders are clearly in a cautious mood as…

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While everyone else was selling stocks this month, companies were buying heavily

“With both traders and retail investors selling at a frenzied level earlier this month, corporations swept in looking for bargains” writes Michael Nagle for cnbc.com. That’s part of an overall strong trend for buybacks, which stand at $5.8 billion a day during the current earnings season, a record. Source: cnbc.com Share This:

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Berkshire shares jump as Buffett says buybacks are an option

“Berkshire shares rose 3 percent in morning trade following the Buffett interview” writes Jeff Cox for cnbc.com. Berkshire Hathaway’s buyback benchmark is when shares hit 120 percent of book value.Buffett called Berkshire stock a “savings account.”. In a letter to Berkshire Hathaway shareholders released over the weekend, Buffett revealed that the conglomerate has been having a difficult time finding bargains as market prices continue to increase.Some shareholders and analysts over the years have called for Berkshire to raise the threshold, but Buffett did not indicate if he is considering a…

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