I was all set to nominate Illumina's (NASDAQ:ILMN) authorization of a $75 million share buyback to my colleague Rick Munarriz's weekly column of dumb financial moves. I mean, the company is trading at a P/E of 68. Sixty-eight! Management can't think of any more lucrative use for its cash than repurchasing shares?

But I think I'll withhold judgment for now. On the surface, the buyback looks like a pretty poor use of capital, but in truth, the move might not be that bad for investors.

First, Illumina did pretty well with its last buyback. In the fourth quarter of last year, the company repurchased almost $71 million worth of shares at less than $23 apiece, considerably lower than its price right now. Hopefully, management will use its current allotment just as wisely, and remember that it's not required to buy if its shares are overpriced.

Much like Intuitive Surgical (NASDAQ:ISRG), which executed a buyback earlier this year, Illumina is in a difficult position. It has a lot of investor cash, but not much need for that moolah, thanks to its own positive free cash flow. The company has to do something with the more than $730 million in cash and short-term investments it had at the midpoint of the year. A quarterly dividend is out of the question; Illumina still has a lot of growth left in it, and it won't become a Johnson & Johnson (NYSE:JNJ) or Abbott Labs (NYSE:ABT) anytime soon.

That pretty much leaves repurchasing shares or making an acquisition. Given that the buyback represents only about one-tenth of its total stash, Illumina hasn't really hampered itself if the next big thing happens by.

But perhaps the most reasonable argument for a buyback is that the company needs to undo shareholder dilution. Employee stock options have bloated its diluted share count, something both fellow Fool Jim Mueller and I have noted. While I'd rather see Illumina get the options under control, and stop acting like a cash-strapped biotech, at least investors will retain a more complete piece of the pie.

Sorry, Rick -- I don't think this one will make the cut this week.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Intuitive Surgical is a Rule Breakers selection, and Johnson & Johnson is an Income Investor recommendation. The Fool's disclosure policy once bought back a shirt it donated to a resale shop.