Company Share Repurchases from 1/25-29/2010

Chain Bridge Investing (“CB”), on a weekly basis, will shift through publicly held companies that have announced share repurchase plans during the past week.  Share repurchase programs represent a strategic capital allocation decision by the company’s management.  In a world where all other variables are held constant, repurchases will increase the value of the shares held by the current investors.  Theoretically, a company should only repurchase its shares when it believes the shares are cheaply priced in the market and does not have other more profitable uses of its cash.  On the other hand, a company tends to issue shares when it needs additional financing or believes the current market pricing is expensive.  A company that has decided to repurchase its shares usually merits the attention of investors.  In general, few companies make these repurchases, which tend to be implemented by managements considerate of the shareholders’ interest.  Instead, many companies, especially those straddled with debt, will frequently issue additional shares to obtain necessary financing.  Yet, share repurchases can indicate a company has limited growth potential or management is missing other investment opportunities. Nevertheless, share repurchases should not be ignored.

This week, CB found four companies announcing repurchases ranging from .34% to 16.34% of the current shares outstanding.  Some of the larger announced repurchases are: (1) Assurant (“AIZ”); (2) WellPoint (“WLP”); and (3) Quest Diagnostics (“DGX”).   CB finds it interesting that Amazon announces a repurchase plan now that its share price has increased significantly over the last 52 weeks and not when the stock was cheaper. The fundamentals of these companies are show in the exhibits below.  If CB discovers any future investment potential in these companies, it will be posted on www.chainbridgeinvesting.com.

As a final note, these listings are in no way to be construed as financial advice or investment recommendations.  These listings are meant to provide ideas to readers for their own research and show parts of the investment research process of CB.  All data is pulled from Stock Pro Investor and Yahoo! Finance.  CB is not an investment advisor, please read the disclaimer at www.chainbridgeinvesting.com/disclaimer/.

Company Share Repurchases 1/25 – 1/29/10 –

Tagged with Amazon, Ametek, Assurant, AstraZeneca, Canadian National Railway, Capital Federal Financial, Corporate Share Repurchases, Gilead Sciences, Informatica Corporation, New Jersey Resources, Quest Diagnostics, Repurchases, Value Investors, WellPoint