Stock buybacks, in my view, are not a bullish sign. Like any stock purchase, it's only a good thing if the price is right! They do increase EPS (at least if the earnings of the shares bought exceed the interest foregone on the cash expended), which is of course pretty much the name of the game, but for a growth company it's an indication that there are no better avenues for internal investment, which would not be good.
Furthermore, company buybacks are not the same as insider buying. A bunch of guys sitting around a conference table spending other people's money is never as much of a positive indicator as a single executive ponying up his own dough. I'm pretty sure there have been academic studies indicating insider buying is bullish, while company repurchases are neither bullish nor bearish.
In the case of IDTI, there have been a number of insider buys this year, which is bullish. The stock repo in the 10-Q was only 20,000 shares at $9-3/8. That's fewer shares than the several insiders have accumulated, but at a better price than most of us have obtained on average. While not a strong positive, at least they got a good price.
BTW, to the poster asking what difference the 6 million additional shares this year make to the EPS just reported, I calculate the same $.03 either way. |
