A Trio Of Buyback Bets

Buyback stocks outperform the market year after year, so why not just follow buyback announcements and invest yourself? Unfortunately, it’s not that simple...

I carefully analyze each buyback stock, each buyback company, separating rhetoric from reality. Our team pores over announcements, scrutinize quarterly and annual reports, and talk to company officials, lawyers and competitors. Here's a look at 3 of our recent recommendations:

NRG Energy (NRG)

New Jersey-based energy company NRG Energy has more than 3 million residential, industrial and commercial customers under the NRG, Reliant, and other names.

In 2017 the company began a 3-year revamp, to reduce costs, slim down the business and reduce debt. It is expected to hit its reset goals, and when complete it will be basically 2 businesses — one will be a competitive energy company selling power directly to end customers, with a heavy focus on Texas.

The other will be an independent power producer that sells electricity to utilities. Company leaders hope the two sides will create a steady revenue and earnings stream.

Q2 delivered earnings of 70 cents per share from continuing operations. Revenues of $2.465 billion increased 0.2% from the year-ago quarter’s figure.

Through Aug 7, 2019, the company completed share repurchases of $1.25 billion that includes the $1 billion share repurchase program announced in the fourth quarter of 2018. The board authorized a share repurchase program of $250 million, expected to be executed in 2019. Shares outstanding have been reduced by 15.159% in the last 12 months.

Textron Inc. (TXT)

Aerospace company Textron has a network of aircraft, defense, industrial and finance businesses, and many recognizable brands — Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Arctic Cat, Textron Systems, and TRU Simulation + Training.

Founded in 1923, it has a network of powerful businesses with total revenues of $14.2 billion, 35,000 employees, facilities and a presence in 25 countries. HQ is in Rhode Island. It is ranked 208th on the Fortune 500 list of largest U.S. companies.

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