Research conducted both locally as well as overseas suggests stocks from companies buying in their own shares more often than not outperform peers who don't
Research conducted both locally as well as overseas suggests stocks from companies buying in their own shares more often than not outperform peers who don't. However, a recent quant research report from Macquarie suggests investors shouldn't narrow their focus to buy-backs only. Macquarie analysts developed the concept of Stakeholder Yield which covers companies ability to reward stakeholders outside the business from the cash generated inside the business. This concept covers share buy-backs, of course, but also higher dividends and paying down debt. Macquarie's research builds a strong case that companies that combine all three strategies to reward shareholders, simply deliver superior returns for their shareholders. For Australian shares, the quant analysts have developed a score system and combined this with stock ratings from the fundamental analysis division. As such the Top 11 consists of the following names: Seven West Media, Dexus, Village Roadshow, GPT, Bradken, JB Hi-Fi, Amcor, Downer EDI, IOOF, Singapore Telecom, CBA.