HP's Wager on the Future

When a company is so aggressive in repurchasing its stock, it is usually a sign that management has great prospects on the horizon and wants the company and its senior shareholders to reap the majority of the benefit. By repurchasing stock, the company may reduce its cash balance, but it can dramatically increase its earnings per share. The reason: As the number of shares outstanding is reduced, net income is spread out over fewer shares.

Source: Motley Fool


Posted: Mon - August 29, 2005 at 03:47 PM