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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Boca_PETE who wrote (4462)4/12/1999 5:11:00 PM
From: Sun Tzu  Read Replies (1) of 15132
 
>> If you believe such gearing is almost always occuring...

This is almost always the case with "regularly planned" buy backs. Most companies do not have an on going buy back plan towards increasing shareholder value in mind, because that would imply that regardless of the stock valuation, the company thinks their stock is undervalued, which is nonesense.

The "genuine" buy backs are those by companies with strong cash flow who have been beaten down for one reason or another (e.g. tobacco or oil) and the buy back is only a matter of once in a while kind of deal; Once the stock starts to substantially move up, the buy backs stop as the stock is no longer undervalued.

Contrast this with regular buy backs from high flying companies, and you'll see who is trying to increase shareholder value and who is trying to mask hidden ongoing costs (i.e. salaries).

>> Under the previous requirement (APB 15), such options were counted as outstanding for BOTH "Primary EPS" and "Diluted EPS".

Any option that has been in the money for more than year should be part of basic shares IMO.

>> More such options were counted as "outstanding for "diluted EPS" where the company's stock price at period-end was greater than the average stock price for the period.

You lost me here.

Sun Tzu
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