“When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases.” Warren Buffett 1984 Letter to ShareholdersIf we just consider the share repurchase by the company while ignoring the fluctuations of profits, tax, cash flow, expenses, etc, and assuming earnings remain the same over the years, technically Earning per Share (EPS) will increase, as the no. of shares has decreased. On the other hand, Grant of Employee Share Options & Issuance of Bonus shares increases the no. of shares and technically will dilute the EPS. Of course, profits, earnings, expenses will always vary through the years… Warren Buffett advocates the repurchase of shares as this adds value to the ......
I have previously written a post about the clock work precision of Sarine Technologies Ltd’s share buy back. (read here)