Stock buybacks are generally considered a bullish signal on Wall Street. They return capital to shareholders, while declaring management's belief that its own cheap shares are its best return on investment. As long as profits remain consistent, share repurchases can even increase earnings per share, by dividing the same amount of earnings among a smaller pool of shares outstanding.

Today, we'll draw up a list of companies that have announced stock buyback programs, then consult Motley Fool CAPS to see which of those companies the 110,000-strong investor community favors most. If CAPS' top investors endorse the prospects of companies announcing buybacks, Fools should take notice.

Here are some of the latest companies to announce share repurchase programs.

Company

Buyback Announcement Date

Amount of Buyback

CAPS Rating (5 max)

Canadian National Railway (NYSE:CNI)

July 21

25 million shares

*****

Bank of America (NYSE:BAC)

July 23

75 million shares

**

Vodafone (NYSE:VOD)

July 23

$2 billion

****

Praxair (NYSE:PX)

July 23

$1 billion

*****

Empire Resources (NYSE:ERS)

July 23

2 million shares

**

Spartan Motors (NASDAQ:SPAR)

July 24

1 million shares

****

Baker Hughes (NYSE:BHI)

July 24

$1 billion

*****

Ametek

July 24

$50 million

*****

Hillenbrand

July 24

$100 million

*****

PepsiAmericas

July 24

10 million shares

****

Sources: Company press releases; Motley Fool CAPS.

Investors at CAPS appreciate this group of companies announcing buyback programs, as most have received three-star or better ratings. Yet it should be noted that a company is not obligated to repurchase shares just because it has announced its intention to do so.

Buybacks have been partially fueled by the easy credit policies of the past few years. Companies didn't mind borrowing big bucks to repurchase their shares even if they were trading at all-time highs. With credit policies tight, however, we may see far fewer share repurchase programs in 2008, or more companies issuing shares to raise money.

Mortgaging the future?
Even though it was seen as the savior of Countrywide Financial, Bank of America issued a lot of stock at the time to make the acquisition. While it suspended its repurchase program back in December as a means of conserving cash, the second-quarter earnings it reported were ahead of expectations, leaving everyone with smiles as it remained committed to paying its $0.64 dividend. The share repurchase program may let it reduce some of those shares it issued to bring the mortgage originator into its fold.

CAPS member stockhaven finds only positive developments when looking at the results of B of A in what is arguably one of the worst financial crises we've faced:

Largest U.S. retail bank and second largest by assets. Significantly beat analyst estimates & profit nearly tripled from the first quarter as write-downs tied to disrupted capital markets fell by more than half. Board authorized spending up to $3.75 billion over next 12 to 18 months to buy as many as 75 million shares.

Take a ride on the Reading
One of the theses for investing in railways is that higher fuel costs for trucking make the railroads a more economical mode of transportation. While true, investors can't discount the fuel input for railroads, as the second-quarter results of Canadian National Railway make clear. It beat analyst earnings expectations, but earnings still fell by 11% due to a 60% increase in fuel costs, only a portion of which the company was able to pass along.

CAPS member dcdanb finds the expansive rail system that Canadian National has in place a competitive advantage:

Again -- with a rail system spanning the continent East to West, and connecting all 3 NAFTA nations, [Canadian National] is poised to see a large increase in demand. Increasing fuel prices will drive more freight and passenger traffic to rail, which blows away all other forms of transit in [efficiency]. Rail is a solid bet in general, especially since high-speed passenger rail is on the near horizon. They have the lines, the know-how, and only need to add the technology.

Foolish fallout
You've heard from your fellow investors -- now it's your turn. Motley Fool CAPS is a completely free, fun service where more than 110,000 investors have their say every day. Sign up for CAPS today, and share your best pitch for why your favorite stock will beat or lag the market.

Bank of America is a Motley Fool Income Investor pick. Canadian National Railway is a Motley Fool Stock Advisor recommendation. Got a craving for savvy investing know-how? Order some takeout from the Fool. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.