There is only one combination of facts that makes it advisable for a company to repurchase its shares: First, the company has available funds -- cash plus sensible borrowing capacity -- beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively calculated.
-- Warren Buffett, 2000�
Investors love share buybacks. When a company buys shares of its own stock and retires them, it leaves fewer shares outstanding. This boosts earnings per share, because the company's net income is spread over fewer shares. Additionally, the buyback program tilts the supply demand balance for the stock in favor of sellers, which can push the share price higher.
Warren Buffett believes that share buybacks make sense only when two key conditions are fulfilled.
However, buybacks don't always make sense. Investing legend and Berkshire Hathaway CEO Warren Buffett has said that two conditions must be fulfilled for share buybacks to be a good use of capital. The company must have excess cash and borrowing ability to fund the buyback, and the stock needs to be clearly undervalued.
Best Communications Equipment Companies To Own For 2015: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By John Kell]
Among the companies with shares expected to actively trade in Wednesday’s session are Dow Chemical Co.(DOW), Tupperware Brands Corp.(TUP) and Yahoo Inc.(YHOO)
Hot Undervalued Stocks To Watch Right Now: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By WALLSTCHEATSHEET]
While Caterpillar has experienced several difficult quarters, the causes have been external rather than internal��amely, a depressed mining sector leading to inventory problems. By underselling demand for the rest of the year, Caterpillar is exchanging short-term sales weakness for an attractive inventory position in the future leading to sales growth beginning in 2014. Moreover, investors thinking about going long Caterpillar can use recent weakness to buy the stock at a more attractive level than before.
- [By E. Michael Greenberg]
Blue Sphere has other major partners on these projects as well.� They have brought in a hedge fund that specializes in Cleantech investing as an equity partner.� This equity partner has committed to up to $7.5 million for the Charlotte project and $5 million for the smaller Johnson plant.� Caterpillar Financial Services, a division of Caterpillar Inc. (NYSE: CAT) is providing almost $18 million in debt for the construction of the Charlotte project.� Both groups are expected to fund upon their respective commitments to the Charlotte project by the end of August, which will allow Blue Sphere and Biogas Nord to begin construction of the facility in September of this year.� Blue Sphere�� management has stated that they expect the Charlotte project to be complete and producing with in 12 months of the beginning of construction.�
- [By Kathy Kristof]
Steve Halpern: You also look at heavy equipment maker Caterpillar (CAT). What's happening there?
Kathy Kristof: CAT had a relatively bad year. They had trouble with mining revenues, and so again, their stock price got hit, but they look at what's been going on as a temporary blip, because what they've seen is that their heavy equipment—the dealers who sell their heavy equipment, have just run down their inventories.
- [By Dan Caplinger]
Many of the stocks contributing the most to the Dow's losses are the same stocks that have struggled for a while now. Caterpillar (NYSE: CAT ) has fallen more than 2%, showing a complete lack of confidence among investors that the morning's economic data marks a turnaround in the foreseeable future. Following its earnings disappointment yesterday, a Wall Street analyst added insult to injury by downgrading the stock. Strength in the U.S. economy will help Caterpillar, but it really needs global expansion to resume in order to make the most of its profit opportunities.
Hot Undervalued Stocks To Watch Right Now: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By Paul Ausick]
Big Earnings Movers: Google Inc. (NASDAQ: GOOG) is up 13.8% at $1,011.65 after hammering estimates. Advanced Micro Devices Inc. (NYSE: AMD) is down 13.7% at $3.53. General Electric Co. (NYSE: GE) is up 3.6% at $25.57 after beating estimates. Morgan Stanley (NYSE: MS) is up 2.6% at $29.68. Schlumberger Ltd. (NYSE: SLB) is up 2.8% at $93.95 on solid earnings. All these stocks, except AMD, posted new 52-week highs today; Google posted its all-time high.
- [By Matt DiLallo]
Investors may wonder if peers like�Halliburton� (NYSE: HAL ) �and�Schlumberger� (NYSE: SLB ) �were pressured this quarter as well. Both companies have waded through the sluggish North American market by relying on growth overseas. If that trend continues, it should continue to mute some of the weakness Nabors experienced.
- [By P.I.A.]
This Libra story only involves one location out of several around the globe that are favorable to offshore drillers. Some say the industry itself is poised to outperform. The Market Vectors Oil Services ETF (OIH) could make sense to investors. The fund tracks 25 international companies, with Schlumberger Ltd (SLB) comprising 20.6% of its holdings, compared to 4.3% SDRL. Even with the heavy weighting toward SLB, diversification provides safety.
Hot Undervalued Stocks To Watch Right Now: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By Demitrios Kalogeropoulos]
Costly market share gains
The problem is that Family Dollar has had to pay up for its increasing market share and sales levels. The company's gross profit margin fell by more than a full percentage point, to 34.7% last quarter. In contrast, Dollar Tree (NASDAQ: DLTR ) booked an expansion of profits, to 35.2%, continuing a trend that's seen it pull away from Family Dollar.
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