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Fourth-Quarter 2013 Corporate Buyback Scorecard; Best & Worst Companies

Buyback
Scorecard A Tale of Two Stock Buybacks 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 December 31, 2011 through December 31, 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.

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 The Boeing Co.Capital Goods102,566 1,801 1.8 42.4 51.3 115.6
2 Gilead SciencesPharmaceuticals, Biotechnology and Life Sciences115,1551,249 1.1 86.8 6.1 98.2
3 Yahoo! Software and Services41,0245,512 13.4 51.3 29.8 96.5
4 GameStop Corp.Retailing5,705614 10.8 50.5 26.0 89.5
5 Celgene Corp.Pharmaceuticals, Biotechnology and Life Sciences69,6274,808 6.9 56.8 15.1 80.4
6 Boston Scientific Corp.Healthcare Equipment and Services16,0491,100 6.9 46.3 17.4 71.7
7 Western Digital Corp.Technology Hardware and Equipment19,8451,746 8.8 63.8 4.1 70.5
8 Lincoln National Corp.Insurance13,542 942 7.0 62.3 4.4 69.5
9 Southwest Airlines Co.Transportation13,126940 7.2 45.7 14.4 66.7
10 Ameriprise Financial Diversified Financials22,3822,964 13.2 55.5 6.7 66.0
Worst
Company Industry Market
Capitalization
$ Total
Buyback
$ Total
Buyback /
Market Cap
Buyback
Strategy
Buyback
Effectiveness
Buyback ROI
1 Teradata Corp.Software and Services7,433659 8.9 -8.3 -24.3 -30.5
2 Intuitive Surgical Healthcare Equipment and Services14,620 1,348 9.2 -5.4 -23.4 -27.5
3 Edwards Lifesciences Corp.Healthcare Equipment and Services7,19585011.8 -1.3-15.5 -16.6
4 CenturyLink Telecommunication Services18,826 1,623 8.6 1.6 -16.2 -14.9
5 Citrix Systems Software and Services11,790 657 5.6-5.2 -9.8 -14.5
6 F5 Networks Technology Hardware and Equipment7,052550 7.8 -8.4 -3.9 -12.0
7 Cameron International Corp.Energy14,160 1,553 11.0 8.1 -16.8 -10.0
8 Red HAtSoftware and Services10,620436 4.1 -0.6 -7.8 -8.3
9 CoachConsumer Durables and Apparel15,742 1,091 6.9 -4.0 -4.0 -7.8
10 International Business Machines Corp.Software and Services203,67425,854 12.7 0.6 -7.5 -6.9
Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from December 2011 to December 2013. Includes the 486 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 12/31/2013. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 Billion.