According to Goldman Sachs’s US Weekly Kickstart research booklet, investors are beginning to reverse the long-term trend of rewarding firms spending cash to repurchase shares, as corporate debt levels soar and equity valuations trade close to all-time highs.
Q1 Buybacks Break Post-Recession Records
This conclusion is based on the performance of Goldman Sachs’ ‘buyback basket’ of stocks, which has returned 5% year-to-date compared to 7% for the S&P 500.
Buybacks are underperforming
The performance of Goldman’s ‘buyback basket’ isn’t the only indicator that shows investors could be getting bored with buybacks. Figures show that buyback executions have decelerated since reaching a record high during the first quarter of 2016.
JPM: Buybacks Are Supporting The Market
Share repurchases hit a high of $163 billion...
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