Stand Strong With the Buyback Kings

The handful of companies that have mastered this art will be the places to go on the next bad down day.
Publish date:

This column was originally published on RealMoney on May 22 at 5:27 p.m. EDT. It's being republished as a bonus for readers.


(C) - Get Report



(XOM) - Get Report


United Technologies


Bank of America

(BAC) - Get Report

all worked well today.

One might ask what these companies have in common. I would tell you one word: buybacks. They, along with

Sears Holdings


, which didn't do badly considering the


(LOW) - Get Report

debacle and last week's strength -- hold in better than most stocks I follow.

The buyback as a method of cash deployment doesn't work that well in a non-volatile stock market. There are always buyers somewhere in a decline in a non-volatile market.

Not so in this market. There's not enough of a chance for buyers to be there underneath. The velocity of the decline is just too swift.

But when you have companies that are adept at buying back stock, it is a godsend. These companies all buy back stock through thick and thin. They are underneath constantly, making sure that no sellers can overwhelm the market.

I think that the buyback is a bit of a lost art. Companies announce them all the time, but most don't mean it or don't do anything with it. Not so Citi, Exxon, Bank of America and Sears: They are there to sop up the selling, whether it's from real sellers, futures sellers doing arbitrage or the latest, mad-bombing selling from ETFs.

Think of these companies the next time we get a whopping day down. They will be the place to go.

At the time of publication, Cramer was long Sears Holdings. Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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