It's a buyback record in the United States. In the first half of 2014, US companies bought back their own securities for 338,3 billion dollars, the most since 2007, i.e. since before the crisis. And in the first eight months, 740 companies authorized buybacks, the highest number since 2008. The data, reported by the Wall Street Journal, was elaborated by Birinyi Associates. In the last year, the buyback ranking sees Apple in the lead with 32,9 billion, followed by IBM with 19,5 and Exxon Mobil with 13,2.
The most recent buyback was yesterday by Humana for two billion. The trades are being spurred by gains in the stock market: shares of buyback companies have beaten the market as a whole by 20% since 2008, according to Barclays. Barclays also indicates that companies spent 31% of cash on share buybacks in the second quarter, compared to 14% at the end of 2009.
However, there is no shortage of critics of buybacks: they can artfully inflate earnings per share by reducing outstanding securities and if carried out thanks to capital raised with debt and bond issues, they can increase risks.
