📈💼💸 Share buybacks reach highest levels since 2018! 🚀
The US economy seems to be full of optimism, thanks to a sharp increase in stock buybacks!
According to a recent Deutsche Bankresearch , companies have announced a 13 weeks share buybacks worth over $383 billion in the last 13 weeks, an increase of 30 % from last year and the highest amount since June 2018. This news includes Apple's $110 billion buyback plan , a record amount!
This "boom" of buybacks isn't just about big players like Apple $AAPL+0.2% and Alphabet $GOOGL, which just announced plans for a $70 billion buyback . Of the $262 billion in buybacks announcedin the first quarter, $82 billioncame from companies outside of the biggest tech giants!
"Buybacks are the biggest driver of stocks in the medium term," said Deutsche Bank's chief equity strategist . "They are indicators of how companies feel about the macro environment."
Whether it's earnings growth, which is currently accelerating at its fastest pace in nearly two years, or the positive outlook for the U.S. economy, companies are returning money to shareholders through buybacks.
But buybacks are not always a great sign. When a company resorts to buybacks, it means it doesn't have room to innovate and grow in which to better invest its money. Another important reason may be an improvement in investor sentiment, as with buybacks usually comes a rise in share price. We saw just that with Apple, where the share price jumped by more than 6 %.
What is your opinion on buybacks? Do they always make you happy, or do you prefer to receive the funds in the form of dividends? 📊✨
As Lukyn writes, a lot depends on what kind of company it is, either buyouts or dividends or I would add a third thing, sometimes neither and I prefer when they invest the right way to develop theirs.
Exactly, that's why I'm asking, how do you have it with Apple for example, I understand that Apple has so much cash that there's money left over for both buyout and innovation.
For me, Apple's fine. I certainly wouldn't want to see just buyouts, but as you write, he's got a lot of cash and he's also investing and moving forward with technology, although not as fast but it's hard when they're already great. I'm hoping with them now that they really put a lot on those glasses.
It's clear that they won't come up with something new for the next generation iPhone, but the stability of their products and the overall quality are at a great level, and that's a reason for me to buy their products and even pay extra for them.
It depends a lot on what kind of company with $MO+0.2% I prefer a dividend and with $AAPL+0.2% I prefer buybacks.