The Soapbox

Joined: 09/29/2013 Posts: 60584
Likes: 57034

What's this?

Umm, your EPS would go down, not up. The denominator stays the same, the

numerator dividing future profits is what goes down. And do you really think a Co. with a 12 FWD PE wouldn't be more attractive to a buyer than one with a 16 FWD PE? That would do nothing to make the stock more attractive?

They are parking it there (in buy backs) because, as you've correctly stated before, they don't build factories (or whatever expansion) because they have cash, they do so because there is demand for that factory. That's a pretty clear signal of what they think will happen to the value of that stock in terms of investment now. And when that factory becomes the better investment, they will have those shares to shed rather than take on debt in order to invest in that.

(In response to this post by 111Balz)

Posted: 04/16/2019 at 10:30AM

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Yep, if you reduce the denominator in a ratio, the ratio goes up! ** -- 111Balz 04/16/2019 09:19AM

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Well said! ** -- 111Balz 04/16/2019 09:46AM

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Passed through in buy back shares? ** -- Shenhoo 04/16/2019 09:14AM

You don't think that got passed through back to shareholders? ** -- Hoodafan 04/16/2019 09:15AM

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Huh? The price of a stock can go up from a buyback because -- 111Balz 04/16/2019 09:55AM

Huh? That would be the additional benefit to buybacks for those that hold -- Hoodafan 04/16/2019 10:03AM

I do, but I'm not sure you get this at all. When a company -- 111Balz 04/16/2019 10:14AM

Umm, your EPS would go down, not up. The denominator stays the same, the -- Hoodafan 04/16/2019 10:30AM

Hooda, gently, you don't seem to have this correct -- 111Balz 04/16/2019 12:41PM

Sorry, meant to say your PE's would go down, not EPS. ** -- Hoodafan 04/16/2019 10:34AM

You can show me as I said. ** -- Shenhoo 04/16/2019 09:30AM

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