SAN FRANCISCO, Aug. 24, 2017 /PRNewswire/ -- TrimTabs Investment Research, part of Informa Financial Intelligence, reports that stock buyback announcements in the latest earnings season dropped to the lowest level in more than five years.
"Corporate America is shutting its wallet as stock prices reach records," said David Santschi, chief executive officer of TrimTabs. "Corporate leaders may be losing faith in the Trump Administration's ability to deliver on its promises and worried about the impact of less central bank support for asset prices."
In a research note, TrimTabs explained that stock buyback announcements averaged 2.6 for $1.3 billion daily in the earnings season that just ended. The volume of announcements was the lowest since April/May 2012. Only four companies—Walgreens Boots Alliance, Fidelity National Information Services, Aflac, and eBay—rolled out buybacks worth more than $2 billion.
"Corporate buying has been in a downtrend for more than two years that shows no sign of ending," noted Santschi.
TrimTabs also reported that newly announced cash takeovers and newly announced stock buybacks have amounted to only $58 billion this quarter. Corporate buying has been trending lower since it topped out at $427 billion in the second quarter of 2015.
"The U.S. stock market isn't likely to get as much of a boost from companies as it did in previous years," Santschi said. "Apart from the too-big-to-fails, fewer companies are willing to use lots of cash to support share prices."
About TrimTabs Investment Research
TrimTabs Investment Research, part of Informa Financial Intelligence, is an investment research firm that publishes detailed daily coverage of U.S. stock market liquidity—including fund flows and corporate actions—as well as daily withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990. For more information, please visit www.TrimTabs.com or follow TrimTabs on Twitter at @TrimTabsIR.
About Informa Financial Intelligence
Financial Intelligence, part of the Business Intelligence Division of Informa plc, is a leading provider of critical decision-making solutions and custom services to financial institutions. From the big picture to the smallest detail, Informa Financial Intelligence's leading-edge financial information and decision-making products provide specialized industry research, intelligence, and insight. For more information, please visit https://financialintelligence.informa.com.
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SOURCE TrimTabs Investment Research