A buyback is a corporation's repurchase of stocks or bonds that it has previously issued. In the case of stocks, this reduces the number of shares outstanding, giving each remaining shareholder a larger percentage ownership of the company. This is usually considered a sign that the company's management is optimistic about the future and believes that the current share price is undervalued. Knowing this information will help when considering which stocks to invest in.
Source: http://www.investorguide.com/igu-article-820-stock-basics-splits-and-buybacks-explained.html
Tags: buybacks
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