How does a company earn less than the previous year but increase its earning per share (eps)? Share buybacks, that is how.
22 companies in the S&P500 fell into this category. Down from 29 pct in 2013. Does it mean they spent less on buybacks?
No. Since stock market moved up 33 pct in 2014, it took more dollars to buy back same number of shares.
Who was the biggest offended? IBM. The other honorable mentions - CAT, XOM, UNH.
Why are they doing this when share prices are at all time highs? To appease “activist” investors who never disliked buybacks at any price.
The term “activist” used to mean something.
Thank You.