Monday, November 23, 2015

Dump And Run

Corporate insiders are using massive share buybacks to mask falling profits and insider selling...

"Corporate insiders have been dumping shares at the highest pace in 4½ years"

"One of the primary reasons it hasn't pulled the market down is a push from companies buying back their own shares. Corporate buying, including cash takeovers and new buybacks, hit $96.2 billion in November...the second-highest pace since the bull market began in March 2009"

"buybacks have faced increasing criticism...While buybacks soared capital expenditures have tumbled, falling 5.6 percent in the third quarter."

Peak corporate profits and sales merely obscured by corporate buybacks...

GAAP profits

Revenue (sales) per share

"In U.S. financial slang, a bagholder is a shareholder left holding shares of worthless stocks"