Stockpickr: The Top 10 Buyback Stocks
In Jim Cramer's latest book,
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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV