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Technology Stocks : Novellus
NVLS 2.400+2.1%Jul 24 5:00 PM EST

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To: brushwud who wrote (3677)2/15/2008 12:29:01 PM
From: Cary Salsberg  Read Replies (3) of 3813
 
RE: "Share buybacks are the worst thing in the world."

Certainly, the buybacks meant to offset option grants and which leave share count constant are little benefit to shareholders. But, if industry cycles are very muted, companies are cash flow positive through the cycle, stock prices don't reflect changed conditions, then the use of cash to SIGNIFICANTLY reduce share count benefits shareholders. EPS increases and dividends may be raised more easily because they are paid on fewer shares.
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