DarkPulse Inc (DPLS)

[trader53]

DPLS Stock Buybacks Hit Highest Level Since 2018


Buybacks typically rise when earnings rise




_______________________________________________________________________

Stock buybacks are soaring
in a sign that corporate America is bullish on the US economy.

the importance of buybacks is simple:
They tell investors how companies feel about the macro environment.

Buybacks typically rise when earnings rise, Chadha said.
This is because as earnings rise,
which is currently happening at its fastest pace in nearly two years, cash flow at companies increases.
Companies can then use this cash flow to increase dividends paid to shareholders,
increase capital expenditures to invest back in the company, or repurchase stock,
and, in turn, return capital to shareholders.

This trend failed to materialize in 2023.
Earnings picked up, but buybacks didn't.
Chadha reasoned this likely had to do with the overwhelming majority
projecting a recession to hit the US economy.

"When macro consensus is for a severe slowdown, or recession,
companies aren't going to do buybacks," Chadha said.
"They're going to hold on to their cash."

But that macro consensus has shifted.
Economists and macro strategists are feeling more optimistic
about economic growth for the US this year.
Corporations are confirming that confidence with buybacks.

"What you saw in [fourth quarter] earnings reporting earlier this year
is that buybacks really started to move back up," Chadha said.
"So I'd say that this cloud of a cyclical overhang is lifting.
Corporates are getting more comfortable with the outlook."

JPMorgan Private Bank global investment strategist Elyse Ausenbaugh
noted that the tick-up in buybacks provides a "nice foundation for investors"
as companies buying back their stock helps support the market
even if individual equity investors aren't pouring money into stocks.

And taken one step further,
Ausenbaugh sees buybacks as just part of the case building in first quarter earnings
that companies are seeing higher cash flows and using them in ways
that should eventually benefit shareholders,
like boosted capital expenditures for Big Tech companies.

https://finance.yahoo.com/news/stock-buybacks-hit-highest-level-since-2018-080010937.html