How Are Companies Spending Their Cash?

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Feb. 21 (Bloomberg) –- On today’s “Insight & Action,” Adam Johnson looks at what companies are doing with their excess cash in “On The Markets” on Bloomberg Television’s “Lunch Money.” (Source: Bloomberg)

If you have it, spend it.

We should all be so lucky to have it to spend.

Look at corporate america.

Cash as a percentage of assets on the balance sheet, this is a great piece of research.

This is where we are right now.

4.8% cash as a percentage of total assets.

If you look back to the 1950's, this is as high as we have seen it.

The average, 3.7%. companies have a lot cash.

That's important.

The question is, how do they deployed?

There is capital expenditures and research and development.

Most companies do that practically every year.

Year in and year out.

Where do you use the excess cash echo there are currently 199 companies that are buying back stock.

416 that pay dividends.

Look at acquisitions.

A total of 912 acquisitions.

That's a lot of acquisitions.


They get rewarded in the stock market.

Take a look at this.

Buyers outperform.

We think the team over a strategic research.

They compare companies that have gone out and done acquisitions and compare their stock performance.

Look what happens.

20 days, 40 days come 60 days after the purchase is announced.

Up five percent versus the s&p 500. it is counterintuitive.

He go and spend a lot of money, you should be specialized -- should be penalized.

No, you are growing.

What about the big reveals we have seen over the past week?

Bio for slabs up 6.5%. facebook up 1.3%. comcast went down 2.5%. adam johnson.

Especially interesting given that the acquirers tend to fall

This text has been automatically generated. It may not be 100% accurate.


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