Cerner Buyback: Waste Of Cash
After the market close on Wednesday, Cerner Corporation (CERN) announced a $170M stock buyback. The stock was up slightly in after-hours based on the news, but shareholders should absolutely ignore this supposedly good news.
A leading supplier of healthcare information technology had a buyback plan since 2008 that has had little use or impact.
More importantly, the company announced that the plan would only encapsulate 2.1M shares, or 1.2% of the company's shares outstanding. Why does the company even bother at that level? On top of that, why does the CEO claim that the buyback program is a good use of funds with the stock trading at 28x forward earnings? The stock trades above the expected growth rates suggesting limited value.
Read the full article at Seeking Alpha.
Disclosure: No positions mentioned. Please review the disclaimer page for more details.
A leading supplier of healthcare information technology had a buyback plan since 2008 that has had little use or impact.
More importantly, the company announced that the plan would only encapsulate 2.1M shares, or 1.2% of the company's shares outstanding. Why does the company even bother at that level? On top of that, why does the CEO claim that the buyback program is a good use of funds with the stock trading at 28x forward earnings? The stock trades above the expected growth rates suggesting limited value.
Read the full article at Seeking Alpha.
Disclosure: No positions mentioned. Please review the disclaimer page for more details.
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