Posts Tagged ‘stock buybacks drop to lows’

INSIDERS AREN’T THE ONLY ONES BOYCOTTING THEIR OWN SHARES

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INSIDERS AREN’T THE ONLY ONES BOYCOTTING THEIR OWN SHARES

boycotting stock sharesCourtesy of The Pragmatic Capitalist

Insiders aren’t the only ones who aren’t buying their own shares.  According to S&P U.S. corporations have reduced buybacks of their own shares to levels that haven’t been seen since 1998.  Bloomberg reports:

U.S. companies spent the least on share buybacks in the second quarter since at least 1998, S&P said, as the recession crimped earnings.Standard & Poor’s 500 Index companies paid $24.2 billion to repurchase shares, a 72 percent decline from the $87.9 billion they spent a year earlier and 86 percent less than the record $172 billion in the third quarter of 2007. That’s the least since S&P began tracking the trend in 1998, the New York-based research and credit rating firm said. In the second quarter, 169 companies bought back stock, compared with 288 a year earlier.

The worst recession in seven decades convinced companies to stop buying back shares even after valuations fell to their lowest level in two decades, according to data compiled by Bloomberg. Executives use repurchases to lower the amount of outstanding shares and increase stockholders’ stake in profits.

“Weak economies, poor growth prospects, the credit crunch, all of those factors that pushed stock prices down were also impacting revenue, and cash on hand, and all the things needed to repurchase shares,” said James Gaul, a money manager at Boston Advisors LLC in Boston, which oversees $1.5 billion. “In a situation where you’re really strapped for day-to-day expenses, you’re not going to be buying back stock.”

The collapse of the subprime mortgage market spurred $1.6 trillion in bank losses and writedowns worldwide, dragged the U.S., Europe and Japan into the first simultaneous recession since World War II and froze credit markets.

Buybacks Drop

The decline in share buybacks came after the S&P 500 fell to its lowest price relative to profits in 24 years in March. The index traded at an average price-earnings ratio of 14.2 in the second quarter, compared with 16.9 a year earlier and 16.6 in the third quarter of 2007.

Companies in the S&P 500 hoarded cash in the second quarter to weather a record eighth consecutive decrease in quarterly profit. They held a combined $1.06 trillion in cash in the period, 21 percent more than a year


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Phil's Favorites

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 3

 

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 3

Courtesy of John Mauldin, Thoughts from the Frontline 

Two weeks ago I started a mini-series in the form of an open letter responding to a series of essays by Ray Dalio, the founder of Bridgewater Associates. I wrote here and here that he was kinda, sorta wrong in Why and How Capitali...



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Zero Hedge

Exposing The Fed's False QE/QT Narrative With Its Own Data

Courtesy of ZeroHedge. View original post here.

Authored by Daniel Nevins via FFWiley.com,

“The fact that financial markets responded in very similar ways... lends credence to the view that these actions had the expected effects on markets and are thereby providing significant s...



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ValueWalk

Beyond Meat vs Impossible Burger: Comparing The Vegan Meat Burgers

 

Beyond Meat vs Impossible Burger: Comparing The Vegan Meat Burgers

Courtesy of Vikas Shukla, ValueWalk

Pexels / Pixabay

The trend of vegan food has been gathering momentum in the last few years as people become more health conscious. They have also begun to realize the environmental impact of raising meat for human consumption. According to PETA, it takes an estimated 1...



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Insider Scoop

McDonald's Hit New All-Time High After Quarter Pounder Update, Bullish Rating

Courtesy of Benzinga.

McDonald's (NYSE: MCD) shares hit an all-time high of $206.39 Tuesday afternoon.

On Monday, the fast-food chain announced that after a year of serving fresh beef Quarter Pounders across the United States, the company gained burger share in the "informal eating out...



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Kimble Charting Solutions

Wilshire 5000 Creating A Triple Top? An Important Breakout Test Is In Play!

Courtesy of Chris Kimble.

The stock market has been on fire of late, rallying up to the edge of price resistance on several indexes. Today, we look at one of those stock market indexes: the Wilshire 5000.

The Wilshire 5000 tracks all of the stocks in the US market, so it is a broad-based index that carries significant importance when gauging the health of the overall US stock market.

Looking at the long-term “weekly” chart above, it is pretty clear that the index is at an important price juncture.

The Wilshire 5000 spent the last 25 years trading within a rising price channel (1)...



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Chart School

Formula for when the Great Stock Market Rally ends

Courtesy of Read the Ticker.

When valuations for the boring water company or the boring electric company is trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong.

This is when a seriously over valued market is screaming at you.

Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT). 

To see when water company's (and such like) are nearing the crazy FANG like valuations a review of the Dow Jones Utility Index channel shows us how history can repeat. The c...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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