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American Capital Agency Corp. Message Board

  • dr_klumps dr_klumps Sep 23, 2013 5:23 PM Flag

    Stock Buyback - Option Bailout ?

    Stock buybacks are generally considered a bullish signal on Wall Street. They return capital to shareholders, while declaring management's belief that its own cheap shares are its best return on investment. As long as profits remain consistent, share repurchases can even increase earnings per share, by dividing the same amount of earnings among a smaller pool of shares outstanding.

    But don't forget -- a company isn't obligated to repurchase shares just because it announced its intention to do so. So don't use the announcement as a reason to buy by itself, rather use it as a launching pad for additional research.

    And also consider the reason for the buyout. Support the stock price? That is what analyst are murmuring. There is also something more closer to management, the STOCK OPTION PRICE EXERCISES. Its the holidays they are coming up and stock options are a form of compensation, for mortgage execs. pretty big part of compensation. Is this an early Christmas present for the executive stock options? These are the questions that have to be asked.

    Why wasn't the money spent by increasing the dividend through return of capital stock dividend, that same way of buying stock back from the public investors. But when you do a separate public buyback, insiders have an edge and those smart enough have the brains to see this and remember.

    On a wing and a prayer.....oh what a web we weave when we try to.....

 
AGNC
23.46+0.10(+0.43%)Aug 21 4:00 PMEDT

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