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Want to help your company’s stock? Buy shares back

Kai Ryssdal Sep 16, 2014
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Want to help your company’s stock? Buy shares back

Kai Ryssdal Sep 16, 2014
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There’s a new trend in the stock market. Companies are repurchasing their own shares to help make stocks go up. And it’s working, says Dan Strumpf, reporter at The Wall Street Journal.

“Companies that do buy back their stock and have regular routine buyback programs do tend to outperform in the market,” says Strumpf, who has been reporting on the subject.

Although cash levels at public companies are the highest they have been in years, the stock market volume is very low.

“There is quite a bit of debate in the marketplace as to why that’s happening,” says Strumpf. “A lot of people talk about…a lack of conviction in this market. I mean, we have this sort of slow but steadily growing economy, really no fireworks to speak of. And you’ve got a very supportive Federal Reserve that is sort of keeping things humming. But you’re not seeing table pounding and high conviction investment, despite the fact that the market is at an all-time high.”

Listen to the full conversation in the audio player above.

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