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.
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