S&P 500 Stocks Snap Up Shares

11/21/2011


As bulls and bears debate the merits of purchasing shares of large U.S. companies, one group of big spenders has weighed in on the bullish side. Those large U.S. companies.

BIG BUYERS
Company (Price; Ticker)
Net
Buybacks
Last Qtr.
($Bil.)
Share-
Count
Chg.,
5 Yrs.
(%)
CSX ($22; CSX)
1.0
(23)
DirecTV ($47; DTV)
1.5
(40)
Exxon Mobil ($79; XOM)
5.3
(18)
Hewlett-Packard ($28; HPQ)
4.6
(27)
IBM ($189; IBM)
3.4
(21)
Microsoft ($27; MSFT)
1.6
(15)
Wal-Mart ($57; WMT)
1.4
(17)

As of Nov. 11, U.S. companies had authorized more than $453 billion in repurchases this year, on pace for the third-highest total in history. While not all announcements turn into buys, the growth is real. Over the last four quarters, S&P 500 stocks more than doubled their buybacks.

Buybacks have risen year-over-year in each of the seven quarters ended June 2011, based on Standard & Poor's official numbers, which are not released until more than 60 days after the end of the quarter. The index's $109 billion in buybacks in the June quarter were the highest since the March quarter of 2008, and the September quarter looks even better.

Our research and studies conducted by others suggest stocks tend to outperform after buybacks. The table above lists seven recommended stocks that spent at least $1 billion on buybacks in their last fiscal quarter and have repurchased enough shares to shrink the share count by at least 15% over the last five years.


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