In today’s briefing:
- Companies with High Frequency of Share Retirements Tend to Have a High Awareness of Cash Allocation
Companies with High Frequency of Share Retirements Tend to Have a High Awareness of Cash Allocation
- With increasing pressure to buy back treasury stock to raise ROE, more companies with few tradable shares are expected to promptly retire treasury stock in the future.
- Companies that have retired treasury stock three or more times show not only higher stock price valuations, but also superior growth policy scores, cash holding scores, and dividend policy scores.
- Rather than simply focusing on the share repurchase, the focus should be on the overall cash allocation that led to it, including investment in growth and shareholder returns.
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