[Alpha Biz= Reporter Kim Sangjin] On May 26th (local time), CNBC reported on a surge in share buybacks among US companies, highlighting three criteria for selecting recommended stocks: △history of share buybacks in Q1 △total issued shares reduced by 5% over the past year △debt ratio below 65%. CNBC identified 28 companies meeting these criteria, noting that Berkshire Hathaway spent $26 billion (approximately 3.6 trillion won) on share buybacks in Q1 alone, emphasizing that such companies are not uncommon and suggesting that potential exists for stock price increases among leading players in Wall Street's "buyback kings."
Marathon Petroleum saw a reduction in its stock count by 19% over the past year through share repurchases, the largest decline among the 28 listed companies. With a market capitalization of $61.4 billion (approximately 85.3 trillion won), it ranks as a major oil refining company. The company allocated $2.2 billion (about 3 trillion won) for share buybacks in Q1, placing it third in terms of buyback scale. Projected EPS for the year stands at $16.57, a 30% decrease from the previous year, reflecting challenging business conditions. Despite a 43.82% rise in share price until April this year, it has since retraced half of those gains.
General Motors (GM) and State Street also reduced their issued shares by 17% and 11%, respectively. GM announced a $10 billion (approximately 13.9 trillion won) share buyback plan in November last year and recently approved an additional $6 billion (about 8.3 trillion won) at a board meeting on May 11th. As a result, its stock price has risen by 26.96% this year. State Street, the second oldest large bank holding company in the US with a market cap of $21.9 billion (approximately 30.4 trillion won), has seen its estimated earnings decline, leading to a 6.29% decrease in share price this year, despite purchasing $1.16 billion (about 1.6 trillion won) worth of its own shares in Q1 to support its stock.
Among the recommended stocks, Wells Fargo led in Q1 share buyback scale, amounting to $6.84 billion (approximately 9.5 trillion won).
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