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Buyback Scorecard The Most and Least Effective Stock Buyback Programs The S&P 500 as Stock Repurchasers Industry Comparisons |
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 or $1 billion of their shares from September 30, 2011 through September 30, 2013, 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.
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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 | Constellation Brands | Food, Beverage and Tobacco | 10,812 | 609 | 5.6 | 67.2 | 19.7 | 100.1 | |
| 2 | GameStop Corp. | Retailing | 5,804 | 660 | 11.4 | 47.5 | 33.7 | 97.1 | |
| 3 | Gilead Sciences | Pharmaceuticals, Biotechnology and Life Sciences | 96,230 | 1,076 | 1.1 | 73.3 | 12.7 | 95.2 | |
| 4 | Cigna Corp. | Healthcare Equipment and Services | 21,739 | 1,044 | 4.8 | 29.6 | 35.8 | 76.1 | |
| 5 | Celgene Corp. | Pharmaceuticals, Biotechnology and Life Sciences | 63,393 | 4,758 | 7.5 | 53.8 | 13.9 | 75.2 | |
| 6 | Western Digital Corp. | Technology Hardware and Equipment | 14,952 | 1,596 | 10.7 | 45.8 | 17.8 | 71.8 | |
| 7 | H&R Block | Consumer Services | 7,285 | 346 | 4.8 | 48.7 | 15.4 | 71.6 | |
| 8 | Lincoln National Corp. | Insurance | 11,106 | 1,043 | 9.4 | 39.8 | 19.1 | 66.5 | |
| 9 | Gannett Co., Inc. | Media | 6,139 | 258 | 4.2 | 56.8 | 5.1 | 64.8 | |
| 10 | Yahoo!. | Software and Services | 33,844 | 5,697 | 16.8 | 43.2 | 14.8 | 64.3 | |
| Worst | |||||||||
| Company | Industry | Market Capitalization | $ Total Buyback | $ Total Buyback / Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | ||
| 1 | Intuitive Surgical | Healthcare Equipment and Services | 14,942 | 1,348 | 9.0 | 3.6 | -39.2 | -37.0 | |
| 2 | Broadcom Corp. | Semiconductors and Semiconductor Equipment | 15,066 | 628 | 4.2 | -8.3 | -30.4 | -36.2 | |
| 3 | Edwards Lifesciences Corp. | Healthcare Equipment and Services | 7,818 | 890 | 11.4 | -3.8 | -12.4 | -15.7 | |
| 4 | F5 Networks | Technology Hardware and Equipment | 6,719 | 385 | 5.7 | -1.5 | 13.6 | -15.0 | |
| 5 | CenturyLink | Telecommunication Services | 18,849 | 1,289 | 6.8 | 4.8 | -17.6 | -13.6 | |
| 6 | Teradata Corp. | Software and Services | 9,042 | 496 | 5.5 | 4.6 | -10.9 | -6.8 | |
| 7 | Coach | Consumer Durables and Apparel | 15,323 | 1,216 | 7.9 | -1.1 | -5.7 | -6.8 | |
| 8 | Allergan | Pharmaceuticals, Biotechnology and Life Sciences | 26,851 | 1,646 | 6.1 | 6.0 | -12.1 | -6.8 | |
| 9 | The Mosaic Co. | Materials | 18,319 | 1,163 | 6.3 | -15.5 | 10.7 | -6.4 | |
| 10 | CH Robinson Worldwide | Transportation | 9,498 | 1,049 | 11.0 | -7.2 | 4.5 | -3.0 | |
| Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from September 2011 to September 2013. Includes the 489 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 09/30/2013. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 Billion. | |||||||||