Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: reaper who wrote (196396)	10/9/2002 11:08:52 AM
From: Perspective	Read Replies (2) of 436258

One way I'm evaluating companies now is to look at the cash flows being diverted to share repurchase + dividends. Basically, a stock will come under pressure if mutual fund selling exceeds the share repurchases. Also, the share repurchase plus dividends gives you an idea of how much cash flow the company is diverting to investors. Looking at CL, I see an expensive stock, with 400M/qtr recycling to investors. If the demands on the stock exceed that in the future, it will fall even if the company continues to perform. More interesting is AIG - they have been diverting less and less cash to dividends and stock repurchases, and if they are exposed to the financial markets (where the hell else would they park their assets?) increasing cash flow will have to go to service their liabilities. What do you think? Are you looking at many insurers? Seems like the continued financial market deterioration will start to bite cash flows that had been used to pay divies and prop stock prices. BC

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