Stock Buybacks in U.S. at Fourth-Fastest Pace, Birinyi Says
Corporate buybacks may be headed for their fourth-largest year, recovering a slump in 2009 following the worst recession since the 1930s, according to Birinyi Associates Inc.
U.S. companies have authorized $251.8 billion of share repurchases so far this year, the Westport, Connecticut-based research and money management firm founded by Laszlo Birinyi said in a note sent to clients today. That’s $2.28 billion, or 0.9 percent, less than at the end of August 2008. Corporations spent $88 billion more on buybacks in the second quarter than during the first three months of 2010.
Buyback authorizations plunged in 2009 amid the first global recession since World War II. Cash at Standard & Poor’s 500 Index companies probably increased for a seventh straight quarter during the April-to-June period, according to data compiled by S&P.
“Authorizations continue their ascent,” Birinyi wrote in today’s the report. “While we aren’t at levels seen in 2005- 2007, we are way off the 2009 lows.”
At the end of August, authorizations totaled $584.7 billion and $491.3 billion in 2007 and 2006, respectively, Birinyi said. While 2010’s repurchases by dollar value are approaching 2008’s level, the number of companies announcing plans is 583, down from 996 that year. Financial firms and banks have authorized the most repurchase plans at 117, according to Birinyi.
To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net.
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