All Cap Share Buyback Model

 

 

CLICK HERE for a complimentary Model Fact-card.

The most common interpretation of a stock buyback is that the issuing company is thriving financially. Buybacks are often touted as a means of returning a portion of company profits to shareholders to reward them for their investment, like a generous dividend payment without the unwanted immediate taxation. Having effectively utilized its equity capital to fund growth, the business now generates enough revenue to fund its own continued expansion and can return capital to its investors. 

The All-Cap Share Buyback Model represents an equal-weighted portfolio of small, mid, and large cap stocks that have purchased their own stock the last twelve months.

Process

  1. Start with the largest 1,500 domestically-traded companies

  2. Select the 300 companies with the highest 12-month share buyback ratio.

  3. Screen by 5-year risk-adjusted seasonal relative strength and select the top 50

  4. Screen by earnings momentum and share buyback and select the top ten.