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Individual Stocks

Selecting Individual Stocks

What are stock or share “buybacks”?

Yet another strategy that companies may employ is share “buybacks,” or the purchasing back of shares from the open market. Since the earnings of a company are often calculated on a per share basis, a company can make its earnings per share radically improve if there are fewer shares on the market. An important way to tell if a company is in fact buying back its shares is to scrutinize its quarterly reports, and find the line item “shares outstanding.” From here, you may compare past quarters or years to see if any buybacks have occurred.



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