I get a feel-good itch when a company I own buys back its own shares -- and the buyback actually makes sense. So I felt pretty good this morning when Cree (NASDAQ:CREE) announced that it has expanded its own share buyback program.

From Jan. 2001 to March 2004, the semiconductor materials maker bought back around 4 million shares at an average $15.61 a pop. In its earnings report on April 15, the company suggested that it may resume buying, which I thought a pretty good idea -- especially given that the price seemed reasonable based on the strength and prospects for Cree's LED business alone.

The stock has sold off a bit since. Cree responded by buying back 1.1 million more shares at an average price of $19.96, or about 28 times the company's $51.5 million in trailing free cash flow.

The most recent expansion authorizes the repurchase of 5.1 million additional shares, for a total of up to 7 million, or approximately 9%, of the company's shares outstanding. And if Cree continues to buy back at reasonably attractive prices, I won't object. At last check, the company had $179 million in cash and no debt on the balance sheet.

Indeed, Cree has been responsible about buying back shares at fair prices, which is far better than the alternative. We've ranted in the past about companies like Microsoft (NASDAQ:MSFT), Cisco Systems (NASDAQ:CSCO), Dell Computer (NASDAQ:DELL), and most recently, Texas Instruments (NYSE:TXN) selling (through stock options) low and buying back high simply to offset dilution.

In response to a much more benign situation, I wondered last month why another company I own, Ameristar Casinos (NASDAQ:ASCA), chose to pay its first dividend -- sticking me with the taxes -- rather than buy back what has for a long time been a dirt cheap stock. (That said, I didn't really object to the cash.)

Cree shareholders often ask me why the market seems to "hate" the stock. But if that means that Cree can keep delivering value by effectively buying back shares, I won't complain.

Give us your take on the Cree discussion board.

Fool contributor Jeff Hwang owns shares of Cree and Ameristar Casinos.