What does it mean when a company Repurchases it's own shares?

Question

Is this a good sign for the company...If they do this a lot? Would it be a good investment?

Answer 1

For a company to repurchase their own stock, it exactly what it says. The publicly traded company goes in the market and purchases the Company's stock. The reason that they would do that is varied, but a couple of reasons for this action:
1. Current price of company stock makes it the best investment the company can do with excess cash. It also supports the current market price.
2. The company may be attempting to reduce the number of shares and shareholders, such that the remaining shareholders have more control over the business. The company may have issued new shares in the past so they could expand their business, but now the company wants to have a tighter control over the future of the company.
To understand whether this means the stock is a good buy is determined by more factors than this alone. What is their true motivation? Example: Are they being overly regulated such that new investment and growth is not likely? Is there a power stuggle going on within the management of the company?

Answer 2

When a company repurchases it's own shares means two things. One is the time is good for it or boom time is around where their performance is going to be good and they wouldn't mind taking risk by adding more debt instead of stocks. Second thing is they expect the returns to be lesser and they want to maintain the same value they offer the stock holders by having less stocks to divide up lesser income figure expected.

Answer 3

tough call-they could be doing it to bolster their own value (in light of a real sinking for their stock in the marketplace), or forsee a stock split--a stockbroker type could best answer this or better yet, see if you can get an inside track to someone in the accounting department that may have an inside track//

Answer 4

buy back
till the prescribe limit to be get listed
good 4 LT

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