Monday, November 28, 2011

Share Buybacks, Part 1

I recently read an interesting article on SeekingAlpha about IBM's share buyback record. The article says that over the past 16 years, IBM has been able to half its outstanding share count, which Warren Buffett claims as one reason why he bought $10B worth. That got me thinking, there is at least one ETF focused on share buybacks, PKW PowerShares Buyback Achievers. The fund has 139 components. What is IBM's performance relative to the rest of these? The fund has only been around since 12/2006, but presumably the index (Mergent DRB) has been around a while longer. Some of the components include TGT, DTV, TWX, TJX, COH, AZO, and GPS at 4.77%, 13.4%, 4.99%, 4.82%, 9.11%, 10.62%, and 10.35% decrease in common stock shares outstanding from FY 2010 to FY 2011 respectively. From the SeekingAlpha article, IBM has bought back anywhere from 0.01% to 8.73% of shares in a single year. Stay tuned for more information on the share buyback data point.

This is the first post in a series. The next post is here.

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