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Treasure Chest: Exploiting Buybacks

Treasure Chest | Jan 20 2012

This story features RIO TINTO LIMITED, and other companies. For more info SHARE ANALYSIS: RIO

By Greg Peel

JP Morgan's research shows that if a company buys back stock between the end of an accounting period (in this case end-December) and the company's earnings report for the period (results season begins next month) then that stock typically outperforms the market.

There are currently 35 listed companies identified by JP Morgan as having buyback programs in place. Of those, seven have been buying back stock in 2012. Another seventeen were buying back last year but not this year as yet, while the remainder are yet to begin their programs.

On that basis, JP Morgan expects the aforementioned seven to outperform between now and their results releases.

They are: Rio Tinto ((RIO)), GPT Group ((GPT)), CuDeco ((CDU)), Mincor Resources ((MCR)), News Corp ((NWS)), Linc Energy ((LNC)) and Watpac ((WTP)).

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