“Just keeping up with the current bull market means that companies have to pay 25% more for the same number of shares they repurchased last year. However, we are starting to see excess buying, where the repurchases outnumber the issuance, and therefore reduce the share count. The lower share count leads to higher EPS, and the market likes higher EPS,” adds Silverblatt.
Of the 20 largest share repurchasers in dollar terms during the third quarter, 12 were Dow components, led by Pfizer (NYSE: PFE). Of those 20 stocks, only Oracle (NYSE: ORCL) and Viacom (NYSE: VIA-B) are significant members of PKW’s lineup.
Top 20 S&P 500 Share Repurchases Q3
Chart Courtesy: S&P Dow Jones Indices
Tom Lydon’s clients own shares of Apple.