InterDigital Inc (IDCC)

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Are buy-backs good?

Wal-Mart's buyback is huge, but here's why you should not be chasing buybacks

An interesting comment is snipped below:

"What does it mean? It means that these companies have dramatically boosted their earnings, not by selling more stuff, but by buying back stock. It means that all other things being equal, Wal-Mart, for example, has improved its earnings by 30 percent since 2002 just by buying back stock."

"This sounds like a great deal for stock holders. But does buying back stock really cause stock prices to outperform? If it really does help boost earnings, why don't we just buy the companies that have bought back the most stock?"

"It's a tough question to answer, but, as with everything, there's an ETF for that. And the evidence is it can be a big help, but without improvement in fundamentals, investors are not going to be fooled."

"The lesson: Stock buybacks can boost earnings, but without underlying fundamentals, it's not worth chasing them. Wal-Mart's buyback was certainly a big help, but without the added bonus of additional investments in the e-commerce business, it wouldn't have been a long-term boost.:

https://www.cnbc.com/2017/10/10/wal-marts-buyback-is-huge-but-dont-chase-buybacks.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=104764379&yptr=yahoo