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Goldman Sachs to Companies: Stop Buying Back Your Stock

Buy other companies instead.
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Inside the Stock Buyback Bonanza

It looks like Goldman Sachs doesn't agree with Carl Icahn on at least one big issue: share buybacks.

While the billionaire activist investor has continued to push Apple to purchase more of its stock, Goldman has published a note recommending companies stop spending their cash on buying back their overpriced shares and instead use those overpriced shares to buy other companies' equity. As the bank puts it, "U.S. equity valuations look expensive on most metrics," with the typical stock in the S&P 500 now trading at a price equal to more than 18 times forward earnings.