A constant buyback turns flat earnings and revenues into earnings per share growth by definition. EPS = earnings/shares.
As for using debt to buyback shares, I hope they get away from that now that the p/e is around 12. They should eliminate the debt. AZO is my test case for this idea. If AZO goes down, within the next 10 years, I will never buy a company with rising debt again. Debt stalled quarter over quarter last quarter (rising a little), it could go down this quarter. It will be fun to watch.
Sometimes I wonder if a business like autoparts is not one long-term scam by large money managers. They want AZO to fail after about 20 years, with a new autoparts store to rise in its ashes, with new option plans. Then after the growth stalls, they set it up to go bankrupt with a new autoparts store to be the new rising star. A perpetual cycle. Who gets hurt, us and all the workers with retirement money in the stock market.
Bill, interesting conspiracy theory ... a clever plan to milk investors of their savings via a 20 year cycle of boom and bust ... but a bit elaborate for the auto parts market. Sounds like a scene out of the Stonecutters episode (Simpsons). Regarding your religious opposition to debt, it's clear you need to take some finance classes. Didn't I tell you guys to go read Principles of Corporate Finance by Brealy & Myers (Chapters 16-19) (see Post 15034)? You can buy a copy of the 5th edition on half.com for 7 dollars. But what do you do? Instead of doing a little bit of actual work, you come here and post without completing the simple task of buying and reading a book. Debt is not bad, get it through your head. While I'm at it, your shareholder bill of rights is a joke. No options, no debt, low pay for executives? Where do you come up with this stuff?
Principles of Corporate Finance by Brealy & Myers. Is not worth my $7, I can't afford it. Why don't you give me free links on the internet so I can read them. Who says Brealy and Myers are not hacks or middle class yes men.
I never really said debt is bad, i just said no debt is better that rising debt. I do think everyone should put up flags when debt grows faster than revenue. I also own NYB, I knew I should have red flagged it and sold with its rising debt.
As for AZO I am a holder, I see no reason to sell.
We are living in a period when debt is extremely cheap. I am even running a margin on my stocks debt is so low compared to the deficet. As for stores that go broke I can thinking of Treasury, Builders Emporium, Two Guys, and even Rite Aide.
As for my website, I am a college graduate, but I decided to write a website on observations of reality. Rather than rewrite historic givens that may be wrong and most likely are.
I should be writing about the new flat tax proposal soon.