Several large, well-known companies have recently announced hefty stock buyback plans -- which tend to be good news for investors.
For starters, there's IBM
Drug giant Pfizer
What do these firms have in common? Well, somewhat troubled stock prices, for one thing. Pfizer shares have been trading near $30, off a 52-week high of nearly $40. IBM shares have been approaching $90 over the past few months, after having hit $100 back in February. Viacom shares have been trading in the $30s recently, after hitting $45 back in January. Their stock buybacks are likely designed to boost investors' confidence and the share price, too.
Buybacks aren't always good for investors, though. The shares being bought should be trading at attractive levels. If a firm buys its undervalued shares, it has snapped up a bargain for investors. If it's buying overvalued shares, it's squandering shareholder money that could be more effectively spent elsewhere or simply delivered to investors in the form of dividends.
Learn more about buybacks in the Zeke Ashton article, Buybacks: The Invisible Yield.
L ongtime Fool contributor Selena Maranjian owns shares of Pfizer.