REF - 2007 S+P 500 Stock Buybacks

According to CNBC.com, Companies in the Standard & Poor's 500 index used their cash to buy back a record $589 BILLION of their own stock in 2007.

Some related facts:
*Repurchasing/Buying back stock takes a company's shares (supply) out of circulation and as a result (all other things equal), this will result in an increase to a company's EPS/earnings per share (which would ultimately increase share price as well assuming a constant P/E multiple)

*Companies are currently opting for Stock Buybacks vs. Dividends as the preferred means of returning cash to shareholders...In 2007, stock buybacks increased by 37% vs. dividends which increased by only 10% to $246 Billion (less than 1/2 the cash spent on 2007 stock repurchases)

*S&P 500 industrial companies (a list that excludes banks) still have about $616 Billion in CASH

*The Information Technology (IT) sector bought back the most stock in 2007...makes sense as most tech companies compensate their employees with stock options. Once these options are exercised by employees, the companies have to decide whether or not to buy back company stock vs. allow their company's share count (supply) to expand (which, all other things equal, would DILUTE earnings per share/EPS and stock price)

*During 2007, the Top 10 Stock Buyback companies accounted for $150 Billion...these companies were ExxonMobil (XOM), Microsoft (MSFT), IBM (IBM), General Electric (GE), Hewlett-Packard (HPQ), Home Depot (HD), AT&T (T), Transocean (RIG), Pfizer (PFE) and Cisco Systems (CSCO)

*2007 was the first year companies spent more than their annual earnings on buying back stock...S&P 500 companies earned $587.23 BILLION last year

*S&P's senior index analyst Howard Silverblatt believes these same companies will spend about $100 Billion per quarter buying back stock in 2008

Data Courtesy: CNBC.com
Full Disclosure: I own shares of IBM and RIG.