Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Oil Companies Buy High(
Old 10-29-2004, 07:33 AM   #1
Thinks s/he gets paid by the post
grumpy's Avatar
 
Join Date: Jul 2004
Posts: 1,321
Oil Companies Buy High(

The WSJ had an article today headlined:

"Oil Giants Splurge for Investors Many Major Companies Make Share Buybacks as High Prices Leave Firms With Piles of Cash"

The article says the ExxonMobil, for example, will generate $22.5B in cash this year. XOM will likely increase its share buyback program and increase its dividend.

I'm fine with a dividend increase but I don't understand why it would be a good thing for investors in XOM for the company to buy back shares when its share price ($49) is currently higher than it has been for almost all of the last decade. I have owned XOM shares since 1995 and continued to DCA into them until 2003 when the share price reached $37. I would not be a buyer at the current price. Why does the XOM management team think this is a good use of the shareholders money?

Any insights?

Grumpy
__________________

__________________
...you can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Oil Companies Buy High(
Old 10-29-2004, 08:01 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Oil Companies Buy High(

They don't - shareholders come last. Buybacks are current groupthink. Managing earnings is in nowadays. Share buybacks are one of the tools used.

Ben Graham used to say that the market valued a dollar of dividends more than a dollar of earnings.

Post bubble - the market is still saying company management can produce value better than giving dollars to shareholders. Even with the dividend tax cut.

I too own a big chunk - acquired when they merged with Mobil. I plan to keep it - no matter how stupid they get - hopefully they are too big to fail.
__________________

__________________
unclemick is offline   Reply With Quote
Re: Oil Companies Buy High(
Old 10-29-2004, 08:32 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Oil Companies Buy High(

BTY - any posters old enough to remember the buying spree some major oils went on - the last time oil prices stayed high for a while?

Now that turned out well, didn't it? - Heh, heh, heh!
__________________
unclemick is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Change own oil in your car? mickeyd Other topics 41 02-19-2007 10:45 AM
Oil tops $75, but still not an all time high, am I crazy? laurence FIRE and Money 17 07-09-2006 12:40 PM
Oil, The Market, & YOU! Tommy_Dolitte Young Dreamers 15 10-07-2004 05:18 PM
Gold and Oil haha FIRE and Money 15 07-31-2004 10:38 AM
The Scoop on High Yield Bonds Ted FIRE and Money 9 12-04-2003 01:03 PM

 

 
All times are GMT -6. The time now is 04:28 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.