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2012 Corporate Buyback Scorecard

Buyback
Scorecard
 

The table below shows the 10 most and least effective stock buyback programs among the companies in the S&P 500 that bought back at least 4 percent of their shares from June 30, 2010, through June 30, 2012, according to their return on investment. As calculated by Fortuna Advisors, a New York City-based consultancy that compiled the data for Institutional Investor, buyback ROI measures the overall rate of return of these companies’ buybacks, based on the internal rate of return of the cash flows associated with them. Buyback strategy tracks the performance of the underlying stock in terms of annualized total shareholder return. Once Fortuna determines buyback ROI and buyback strategy, buyback effectiveness can then be calculated as simply the difference between the two, determined as compounded return.

 
The Best and Worst Corporate
Stock Buyback Programs
Best
Company Industry Market
Capitalization
$ Total
Buyback
$ Total
Buyback /
Market Cap
Buyback
Strategy
Buyback
Effectiveness
Buyback ROI
1 Sunoco Energy $4,969 $313 6.3% 34.2% 60.5% 115.4%
2 American International Group Insurance $55,466 $5,070 9.1% 0.0% 77.0% 76.9%
3 Seagate Technology Public Limited Company Tech Hardware $10,516 $3,248 30.9% 28.9% 34.6% 73.5%
4 Ross Stores Retailing $14,092 $898 6.4% 51.9% 10.8% 68.3%
5 O'Reilly Automotive Retailing $10,563 $1,571 14.9% 43.1% 15.8% 65.6%
6 Discover Financial Services Financials $17,806 $899 5.0% 52.3% 8.0% 64.6%
7 Wyndham Worldwide Consumer Svcs $7,695 $1,401 18.2% 44.8% 12.6% 63.1%
8 Biogen Idec Pharma $34,588 $1,876 5.4% 61.4% 0.9% 62.8%
9 Dollar Tree Retailing $12,479 $919 7.4% 58.0% 2.2% 61.4%
10 The TJX Companies Retailing $31,809 $2,537 8.0% 36.9% 15.1% 57.6%
 
Worst
Company Industry Market
Capitalization
$ Total
Buyback
$ Total
Buyback /
Market Cap
Buyback
Strategy
Buyback
Effectiveness
Buyback ROI
10 Best Buy Co. Retailing $7,124 $2,515 35.3% -28.7% -2.4% -30.4%
9 Cablevision Systems Media $3,603 $873 24.2% -14.0% -21.8% -32.8%
8 Cliffs Natural Resources Materials $7,023 $290 4.1% -1.8% -32.9% -34.1%
7 Hospira Pharma $5,777 $300 5.2% -21.2% -16.6% -34.3%
6 Hewlett-Packard Company Tech Hardware $39,654 $15,575 39.3% -31.3% -5.1% -34.7%
5 DeVry Consumer Svcs $2,028 $291 14.4% -29.8% -7.6% -35.1%
4 Juniper Networks Tech Hardware $8,637 $1,010 11.7% -17.7% -21.7% -35.6%
3 R.R. Donnelley & Sons Company Comm and Prof Svcs $2,122 $500 23.6% -19.3% -23.5% -38.2%
2 Electronic Arts Software and Svcs $3,926 $600 15.3% -9.9% -35.7% -42.0%
1 Netflix Retailing $3,802 $257 6.8% -12.2% -45.2% -51.9%
Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from June 2010 to June 2012. Includes the 491 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 6/30/2012. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4%

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