Saturday, July 15, 2017

The cyclicality of share buy-backs: Costco edition

Currently looking through Costco - one of the finest companies I know. (We do not own a stake...)

Anyway this is hardly a Costco specific comment - but here is a run of their buy-backs (after issuance/option exercise etc). Negative numbers are net repurchases.


Year Ended
 Cash from stock issuance
($million)
 2,016 -412
 2,015 -395
 2,014 -212
 2,013 77
 2,012 -459
 2,011 -355
 2,010 -348
 2,009 2
 2,008 -548
 2,007 -1644
 2,006 -1039
 2,005 -135


The company - as you can see - has bought back a lot of stock. The lack of a buyback in 2013 followed a purchase of a non-controlling stake in Costco Mexico.

But whatever - the company stopped repurchasing stock at the bottom of the market in 2009 - only to start again in earnest as the market and their stock price went up.

This happens in almost only cases - and in this case I do not think the board is mendacious in manipulating their stock. It just happens.

And it even happened with Charlie Munger (who is more than passingly rational) on the board.

Just saying.





J
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Thursday, July 13, 2017

E*Trade advert...

In the old days an advert like this would have marked the top.



Completely floored to see adverts this extreme again.

Source: Twitter...

Hat tips: Charlie Grant, Inner_Scorecard.



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