Practical analysis for investment professionals

share buybacks


Weekend Reads for Investors: Merger Mania, Peak Profits, and Value Investing

The burgeoning market for mergers is reflective of a lack of organic growth opportunities, cheap capital, and flush corporate coffers. Additionally, elevated stock prices provide buyers with a strong currency and sellers with a reason to cash in, which helps explain why M&A activity has tended to peak around market tops, most recently in 2007, and before that in 2000. So while the pace of deals may be a sign that CEOs and their boards are more confident about their prospects for growth, investors should be aware that their timing of late has been less than prescient. For those investors tempted to pick the next takeover target, the safer bet may be on the Wall Street bankers who are doing the matchmaking and financing. They always get paid.

Weekend Reads for Investors: The S&P 500 and IPOs Sputter, Private Markets Pick Up the Slack

The market for IPOs, traditionally a useful barometer of the collective appetite of investors, suggests a slowdown is at hand in the United States.

Corneille, Sperna Weiland, and Zürcher Win European QuantAwards 2014

It is our pleasure to introduce to CFA Institute readers the results of the European QuantAwards 2014 competition. We hope you enjoy the summaries of these three winning papers by their student authors, René-Jean Corneille, Rob Sperna Weiland, and Ulrik Zürcher.

Maximization of Shareholder Value: Flawed Thinking That Threatens Our Economic Future

Rather than enriching themselves by buying back stock at prices near all-time highs, CEOs should instead reinvest in their businesses, including their employees. Doing so will drive long-term growth and sustainability for corporations and the economy at large, better balancing the interests of all stakeholders.

Weekend Reads for Investors: Repo Mania

It's perhaps not surprising that US corporations have taken advantage of historically low interest rates by issuing record amounts of debt. It's revealing, however, that companies are using the proceeds to buy back their shares with stock prices at all-time highs. According to S&P Capital IQ, US firms are repurchasing their shares at a pace not seen since 2007.

Weekend Reads for Investors: Diverge From the Herd

Oaktree Capital’s founder and chairman Howard Marks publishes periodic memos that are widely considered “must reads” for those in the investment industry, and his latest missive should be no exception. In ” READ MORE ›



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