This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stockpickr: The Top 10 Buyback Stocks

In Jim Cramer's latest book, Mad Money: Watch TV, Get Rich, he mentions that a good metric for purchasing stocks is to find companies that have been buying back as many of their shares as they can.

This indicates the companies believe their own stock is cheap, and that they can increase their earnings per share substantially by reducing the supply of shares on the market.

We have set up a portfolio of my top 10 buybacks stocks called Mad Money Buybacks, which tracks companies that have not only announced significant buybacks in the future, but have also bought back significant shares over the past year.

No. 1 on the list is IBM (IBM).

A major criticism of share buybacks is that they are just used to counterbalance the increase in shares that results from giving employees stock options. However, IBM actually decreased its shares significantly last year because of its buyback. Shares outstanding at the end of 2006 were 1.6 billion, down 4.6% from the year-ago period. IBM bought back 97 million shares during the year, and has plans to continue buying back shares.

IBM has been slowly buying back its company ever since 1995, having bought back 1.2 billion shares since then. And it has made an average of 50% on every purchase, given that the average price of its stock is $62.

What I find intriguing about IBM is that among its large shareholders is Intel Capital, which invests all of Intel's (INTC) money. Certainly Intel has some insight into who is buying what in technology.

Additionally, super hedge fund Citadel is a buyer of IBM. And if you believe IBM is just about mainframes and "old" technology, it's interesting to note that the PowerShares Nanotech ETF is also a shareholder.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs