Buybacks of 5 Undervalued Stocks
Stock buybacks are generally a bullish signal on Wall Street as they often affirm a company's belief that their stock is undervalued and cheap. When buybacks are done properly, share repurchases will increase earnings per share, so long as profits stay the same. For example, a company with $1 million in earnings and 1 million shares outstanding will have earnings per share of $1. If the company decided to buy back 250,000 shares and leaves only 750,000 shares outstanding -- and total profits remain $1 million -- its new EPS would be $1.33, or $1 million divided by 750,000. The…
