The Buyback Letter Home Welcome to The Buyback Letter Welcome to The Buyback Strategy, the only newsletter research group formed specifically to find investment opportunities among companies that buy back their own shares.
Buybacks benefit stockholders in a number of ways.
By decreasing the number of shares outstanding, they increase the purchasing company's earnings per share. As earnings per share increase, the price of the stock generally rises. This increases the value of the shareholders' current holdings without requiring any additional investment, and without the taxes that would be incurred if the company had paid the same money out as dividends. Additionally, buyback companies provide shareholders with a margin of support under their stock by stepping in and buying shares when their stock price declines. Finally, a company that repurchases its own shares decreases its supply of outstanding stock, and this often causes its shares to rebound faster after a market correction.