Corporate Buying Extremely Concentrated: Information Technology Firms Account for 48% of Corporate Buying Announced in Past Three Months.
Companies have continued to announce plenty of float shrink late this year as stock prices have chugged higher. Announced corporate buying has topped $50 billion in all but two complete months this year.
What these aggregate totals mask is that corporate buying has become more and more concentrated. Information Technology companies accounted for 48% of the corporate buying announced in the past three months. This strength is the key reason we are long Information Technology in our sector model portfolio.
No other sector accounts for even 15% of corporate buying, and the sectors with the next largest shares are Industrials (14%), Financials (11%), and Health Care (10%). Note that corporate buying has been very low in both consumer sectors, particularly in Consumer Staples.
This communication is a publication of TrimTabs Asset Management. It should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change.