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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: zzpat who wrote (32406)	9/3/2017 10:42:59 AM
From: TimF	Read Replies (1) \| Respond to of 361829

I'd point you to Aetna. Why? Nothing about it, certainly nothing you pointed out, contradicts any of my points. Ask a CEO why he's buying back stock when his numbers are bad and he can't give an answer. It's pathetic. When the numbers are bad temporarily, the stock might be pushed down, giving more opportunity to buy back at a better price Buybacks can be used when the top and bottom lines are soaring but if they're not that money needs to be invested in workers and the company. When the top and bottom lines are soaring the stock is more likely to be pricey. Buybacks make more sense when management perceives the stock is undervalued. More important than the value (although value plays a part in this) they make sense when the marginal investment in the company, or outside the company is anticipated to have less risk adjusted rate of return than the buyback. In another way of looking at it they make sense any time current shareholders want them or when doing so would tend to increase stock value more than other investments. The company is supposed to be run for its owners (stockholders) not employees (which doesn't mean companies should always treat workers like crap, as in many cases that can be bad for the mid to long term prospects for the shareholders). Does management get these calculations wrong? Of course, everyone gets things wrong. By definition 50 percent of management is below average. They get things wrong even more.