Buybacks

Studying buyback activity can provide valuable clues about the future prospects of a company and help to predict movements in share price

Information related to Buybacks

When companies repurchase their own stock (commonly known as a buyback) it reduces the number of shares available to other investors. By limiting supply in this way the basic laws of economics suggest that the price of the remaining stock increases.

Therefore, buybacks are a means of supporting the share price as an alternative to paying dividends by reducing the number of shares available to the investment community. Companies may decide that they can offer existing shareholders the best return by utilising spare cash in this way.

Buybacks are the converse of issuing new shares for sale under a secondary offering which often dilute the ownership of existing shareholders by increasing the number of shares.

Such issuances are designed to raise cash for a project or acquisition, whilst buybacks do the reverse. In the case of a buyback, the company spends cash on shares and may decide to hold them in Treasury or cancel them. Either way, they become unavailable to existing or new shareholders.

However…

In many companies, particularly those with a large market cap, buyback trades happen daily, so monitoring each and every trade becomes meaningless.

As is often the case in equity markets, news influences price more than business fundamentals.


Predictions related to buybacks

Past

Our data is collated from daily buyback announcements and can easily be aggregated to look at buybacks and study behavioural patterns or anomalies.

Present

This methodology can be applied to your investment research process, decisions and analysis. Create notifications for new data and receive such alerts in a comprehensible format.

Future

Our data includes ‘Intentions and Authorizations,’ allowing us to inform clients on what is likely to occur. You can study the fundamentals of such data by reviewing a company’s stated intentions.

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INSIGHTS

perspectives on buybacks

In addition to announcing trades that have occurred, companies mention their intentions in advance. Intentions may take the form of an authorisation by a board which authorises a number of shares to be repurchased over a specified time period and subject to certain conditions.

We collect, sort, and put such information into a readable format that is easier for our clients to comprehend. We can inform clients on what is likely to happen as well as what has already occurred.

How to find a hint for a future in buybacks. Smart Insider

At a company level, through the process of aggregation, buyback data allows sophisticated investors to gain valuable insights

Buybacks in sector or market. Smart Insider

Sector and Market specific buybacks

Aggregating data by market sector can provide insights into the confidence associated with each sector.

Similarly, reviewing data according to an individual market or index can highlight regional nuances.

This data is most useful when studied historically.
Our time series reports makes it easy to identify the relevant trends and changes associated with share buybacks .


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