They keep their plans, tactics and research behind closed doors. But they tip their hand when they buy back their own stocks. Stock buybacks are a powerful buy indicator that no serious investor should ignore. A stock buyback is a strong sign of financial health. It indicates that a company has sufficient capital to cover its expenses and repurchase its own shares.
Stock buybacks increase an investor's earnings and the value of shares.
When a company buys back its stock, the total number of outstanding shares is reduced. That increases the price of every share an investors owns along with an investor's earning per share. Buybacks anticipate higher share prices. Stock buybacks save taxes. If a company pays a dividend, the investor has to report and pay taxes on it right away.