Posts filed under “Data Analysis”

What is the Impact of all those Buybacks?

Today’s chart comes from a very interesting article on stock buybacks from Aswath Damodaran, a professor at New York University.

He writes:

This has been a big year for stock buybacks, continuing a return to a trend that started more than two decades ago and was broken only briefly by the crisis in 2008.

The thing to note about buybacks is how greatly exaggerated their impact may be. As evidence, Damodaran points out two recent stories: one in the Economist and one in the Wall Street Journal.

And here’s the chart:
buybacks
Source: Aswath Damodaran

Ultimately, buybacks return cash to shareholders. In terms of earnings, the impact of buybacks is somewhat more complex.

It’s best to think of buybacks in a broader context and not simply as a reduction in share count.

According to Damodaran:

The problem is that a buyback alters the risk profile of a firm and should also change its PE ratio (usually to a lower number).

Before a company calls for a stock buyback, it has risky assets (its operating business) and riskless assets (cash). After the buyback, the company has less of its riskless asset (cash) but also has fewer outstanding shares.

Hence, we end up with a somewhat riskier stock. Damodaran argues, rationally, that a buyback by an all-equity funded company should be a value-neutral transaction. In other cases, the shift should be reflected in by assigning the company a somewhat lower price-earnings ratio.

 

Category: Buybacks, Data Analysis

Whiteout in Finance

Of the many profession that seems to be disproportionately white, I cannot help but note that Finance is amongst the whitest:

 

 

More after the jump

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Category: Corporate Management, Data Analysis, Digital Media, Employment

BLS Preliminary Benchmark Revision to NFP

This year’s benchmark: Surprisingly small From labor wonks at the Liscio Report: This morning the Bureau of Labor Statistics released the preliminary benchmark revision to the non-farm payroll, through March 2014. The annual benchmark is based on the unemployment insurance system’s records, which cover close to 100% of establishment employment, and are the last word…Read More

Category: Data Analysis, Employment

A World of Sovereign Risk

Interesting interactive graphic from Blackrock:


Source: BlackRock

 

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Category: Credit, Data Analysis, Economy, Fixed Income/Interest Rates

$100 Million Homes Are Outliers . . .

Source: National Association of Realtors   Expensive home sales have been in the news a lot these days. The Wall Street Journal wrote about a “palatially priced” mansion in Florida listed at $139 million. The Los Angeles Times featured a Beverly Hills mansion listed at $85 million — interestingly, it was built on speculation. Business…Read More

Category: Data Analysis, Real Estate

Employment Better, Equities Worse Than Average Post Crisis Recovery

Major economic indicators from 4 quarters before to 28 quarters after financial crises. Line marked “average” shows the average performance in 15 major financial crises since 1973, as identified by the IMF in the April 2009 edition of its World Economic Outlook, Index set so quarter of onset = 100. For the recent U.S. crisis,…Read More

Category: Data Analysis, Economy, Employment, Markets

Case-Shiller Housing Data: % Off Highs & Lows

Bespoke: Below is a look at how much home prices have increased for each city tracked by S&P/Case-Shiller since the housing bust lows. As shown, San Francisco remains by far the biggest winner with a gain of 66%. Detroit and Las Vegas have seen the 2nd and 3rd largest increases in price at 51% and…Read More

Category: Data Analysis, Real Estate

Busy States of America

Click either graphic for interactivity awesomeness.

Source: Retale

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Category: Consumer Spending, Data Analysis, Television, Weekend

Time Is Finite: The Life of a Typical American in Weeks

Source: Know More via Wait But Why

Category: Data Analysis, Digital Media, Philosophy

Got Math? Odds Are, You Don’t Understand Probabilities

Last week, we discussed the problems with having poor reading comprehension and the impact that has on consuming news. This week, I want to look at the lack of math skills. America seems to becoming a dangerously innumerate society. Innumeracy is incompetence with numbers rather than words. This is a worrisome issue for the future…Read More

Category: Apprenticed Investor, Bad Math, Data Analysis, Really, really bad calls