Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 176.34

-5.8%

Dec 12 9:30 AM EST

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To: T Bowl who wrote (2571)	2/26/1998 4:12:00 PM
From: MKL	Read Replies (1) of 9256

>>(Have you considered a stock buyback pgm with some of that extra cash? Remember the secret to increasing ROE is to decrease E). It depends. If you are a growth company (with high industry growth potential) then a stock buyback would not be a good idea. Your excess cash should be used to continue growing the business. Buying back stock is a signal to investors that management doesn't have a strategy to grow the business. If you are in a mature business with low growth rates, then it is better to buy back stock (or pay dividends) than rather (wasting the cash) diversify into other business that management would have no idea of how to run. However, buying stock is also a good idea if your stock price is fundamentally undervalue and buying stock back provides higher returns than investing in growing own business. Happy Investing

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