With the impending Fed meeting and the wild price swings – the financial news networks have their hands full.
That’s why today, I want to talk to you about something they’re missing…
You see, the buyback corner of the market has been serving up record breaking numbers.
Now I know that “buybacks” may not sound like the most exciting thing in the news right now – but the truth is, they’re extremely important for the overall market.
Especially when we’re seeing the major indices in the red…
And it could be the one catalyst we’re looking for to rally the market higher.
Here’s what I mean…
The Buyback Record Breaker Could Pad Your Pockets
Well, corporate America has officially been under the new tax law and the celebrated it by rolling out a new record – $1 trillion of stock buybacks.
This record setting year was led by Lowe’s (LOW) and AbbVie (ABV). The two combined offered $34.4 billion in buybacks in the announcement last week.
This buyback boom can easily be contributed to the strong economic growth we’ve seen this year and when you add on the corporate tax overhaul that was signed into law last year – this strong buyback trend shouldn’t be a surprise.
You see, the new tax law leaves companies with a lot more cash to help pump up their stock price- because not only did the new tax law reduce the corporate rate, it also handed corporations a large break when it comes to foreign profits.
And companies have wasted no time with this utilizing this extra cash, using it to reward shareholders. Currently, buyback announcements have spiked 64% so far this year.
Now buybacks are always a sign of good things to come. You see, they tell investors that the company has confidence in its growth prospects – and it also shows confidence in the operations, sales and revenue producing potential over a longer haul. And this make the company much more appealing to investors as you know the stock has the capability for continuing to climb in price.
Here are the top three reasons why share buybacks are good for the stock market – and your pockets:
- To prove to investors that the company is confident and expecting growth in the near future.
- It’s a way to also pay off investors and reducing the overall cost of capital for the company.
- The company believes the shares are undervalued so they can pick them up at this deemed suppressed price and when the price increase issue back at the higher value.
Now I do see it as a “tell” that companies believe they’ll be able to meet, even exceed, their eps projections without the need for a buyback program – which shows that a bullish rally could be on the way.
With that said, keeping a close eye on buyback numbers and announcement can help your bottom dollar in all situations.
Bu at the end of the day, the return investors receive during buybacks is still marginal. Sure, these payouts can add up to a nice sum here and there… but there’s a much better way to bring in consistent income week in and week out.
Now, I’ve been a professional trader for over 25 years now… which means I know a thing or two about how to get the most bang for your buck.
And while thousands of everyday folks are risking tons of money investing in stocks, I’ve been showing my readers how to collect thousands of dollars week in and week out, without buying a single share.
I’d previously been keeping these trading strategies to myself using them to grow richer for a long time.
But today, I want to put these historically lucrative trading income secrets into your hands.
Click here to learn how to access this powerful guide today…