Share repurchase
Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders. |
Similar financial terms
ShareCompanies issue shares as a means of raising equity finance and determining ownership. Purchasers of shares pay money into the company's bank account in return for a Share Certificate signifying their ownership of the shares. The shareholders legally own the company and are therefore entitled to a share in its profits. Shares in public limited companies are traded on the Stock Market and as such the value of the shares will fluctuate depending on the demand.
Book value per share
The intrinsic value of a company's stock. BVPS is calculated by dividing tangible capital dollar value by the number of outstanding shares of common stock.
Diluted earnings per share
A calculation of earnings per share. Add conversion value or preferred stock and convertible bonds to net profit, then divide the result by the number of outstanding shares of common stock that would exist after full conversion; the result is expressed as a dollar value per share.
Earnings per share
The latest reported net earnings, divided by the number of outstanding shares of common stock; one of the most widely used forms for reporting earnings, also called basic earnings per share and distinguished from diluted earnings per share.
Growth in earnings per share
A ratio comparing current earnings per share to the same ratio in a base year; it is used to track rates of growth for the economy.
American shares
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign issuer. The certificates represent claims to foreign equities.
Shares
Certificates or book entries representing ownership in a corporation or similar entity.
Shareholders' letter
A section of an annual report where one can find jargon-free discussions by management of successful and failed strategies which provides guidance for the probing of the rest of the report.
Shareholders' equity
This is a company's total assets minus total liabilities. A company's net worth is the same thing. Also referred to as ownership interest in the UK.
Preferred shares
Preferred shares give investors a fixed dividend from the company's earnings. And more importantly: preferred shareholders get paid before common shareholders.
Performance shares
Shares of stock given to managers on the basis of performance as measured by earnings per share and similar criteria. A control device used by shareholders to tie management to the self-interest of shareholders.
Outstanding shares
Shares that are currently owned by investors.
Outstanding share capital
Issued share capital less the par value of shares that are held in the company's treasury.
Management/closely held shares
Percentage of shares held by persons closely related to a company, as defined by the Securities and exchange commission. Part of these percentages often is included in Institutional Holdings -- making the combined total of these percentages over 100. There is overlap as institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company.
Goldbrick Shares
A stock with only the surface appearance of quality and worth, that is in fact worth very little.
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding.
Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.
Stock repurchase
A firm's repurchase of outstanding shares of its common stock.
Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a dutch auction, open market, or tender offer.
Repurchase agreement
An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser (customer) perspective, the deal is reported as a reverse Repo.
