One of the top ways to spot opportunity is with stock buybacks.
Since buybacks reduce the number of shares available to the market, the value of the existing stock can increase. Plus, a company’s management may initiate a buyback if they believe the stock is significantly undervalued and confident in the company’s future.
Most recently, these three companies announced buybacks, and watched shares pop.
Amgen (AMGN)
Amgen (AMGN) for example is up $18 a share, or about 8% on a volume spike to 4.03 million shares, as compared to daily average volume of 2.9 million. All after the company announced a $6 billion share buyback program for the first quarter. Helping, Amgen also said it expects for earnings to more than double by 2030 on sales of biosimilar drugs.
Amazon.com Inc. (AMZN)
Amazon.com just spent $1.3 billion to buyback 500,000 shares between Jan. 1, 2022 and Feb. 2. That’s big news considering the company hasn’t bought back shares since 2012.
After taking a dive form about $3,700 to $2,700, the ecommerce giant is now up to $3,102. From here, we’d like to see the stock again challenge its prior high of $3,700.
BP PLC (BP)
BP just boosted its share buyback program by $1.5 billion.
“At around $60 oil, we have the capacity for around $4 billion per annum of share buybacks,” Chief Executive Officer Bernard Looney said in an interview with Bloomberg TV. “So clearly if prices are higher, there is the opportunity for increased buybacks.”
Shell PLC (SHEL)
Shell just announced an $8.5 billion buyback program.
“It is intended that, subject to market conditions, this program will be completed by the company’s Q2 results, which are scheduled for July 28, 2022,” they noted. All after posting $6.4 billion of adjusted earnings in Q4, which was well above forecasts of $5.2 billion.
