Corporate Stock Buybacks Officially Go Bananas

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		Tech Media Wall Street Markets Strategy Sports Tools Travel Politics Latest Video Friday, May 13, 2011 Corporate Stock Buybacks Officially Go Bananas Forget fundamentals, here's another reason to be bullish. WJB Capital Group points out that in just the last few weeks, there's been a massive surge in S&P 500 stock buybacks coinciding with a boom in corporate bond issuance. In other words, companies continue to take advantage of uber-cheap lending to reduce their share counts. This is truly a stunning chart. When buyback announcements hit $100 billion in the last quarter, we pronounced that companies had now put themselves in the driver’s seat in terms of being the major buyer of stocks, just as they did in the last bull market. And yet, stock investors still don’t want to believe it. Most of Wall Street’s resources go to examining fundamentals or the behavior of other stock investors. Almost no analysis goes into corporate purchases of stocks, despite their importance. As a result, with shares set to shrink 5% or more a year, earnings per share estimates three years out may be 15% too low! Read » Also On Clusterstock Today: Hedge Fund Manager Crispin Odey: Developed World Standard Of Living Must Plummet Sharply Jim Cramer Goes On HUGE Twitter Rant Against His Critics Izzy Englander: Some Of My Employees Aren't Comfortable Working With People Matt Taibbi's Latest Goldman Assault Explained In 60 Seconds Advertisement CHART OF THE DAY: How A Bank Makes Money CHART OF THE DAY: An All-Time Record For American Exports CHART OF THE DAY: Don't BTD In Egypt Share this email: Buzz Facebook Twitter Digg Reddit StumbleUpon The email address for your subscription is: dwyld.kwu.careers@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Clusterstock RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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