Hot Stocks Alert: 7 Companies to Watch for Share Buybacks

Source: Yuriy K /

Investors are preparing for companies to start reporting earnings for the second quarter of 2023. Despite the recent growth that entire sectors have been experiencing recently, there may be dark clouds ahead. CNBC reports that many stocks may be headed for a less prosperous week. This comes amid fears that the Federal Reserve will resume rate hikes. With uncertainty once again rearing its head, investors are left with questions about what they should be expecting. However, InvestorPlace senior investment analyst Luke Lango recently predicted a new bull market for tech stocks. One trend strongly supports this thesis; tech companies are leading in share buybacks in the U.S. Buying back shares of your own company is a fairly controversial measure. However, one investor who strongly supports it is Warren Buffett. In his 2022 letter to Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) shareholders, the Oracle of Omaha stated:

“The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases.”

Buffett’s own company is among the leading firms engaging in share buybacks. As noted, though, most of the other companies on that list are in the tech sector. Investors should take comfort in the fact that so many industry-leading companies are taking the opportunity to buy back their shares. Clearly, they see better days ahead, even as the prospect of further rate hikes generates more uncertainty.

Let’s take a closer look at who is buying back the most shares as the market prepares to begin a new earnings quarter.

The Top 7 Companies Leading in Share Buybacks:

  1. Apple (NASDAQ:AAPL): This tech leader’s share buybacks have slowed down a bit over the past two years. However, it did purchase an additional $20.012 billion worth of AAPL stock during Q1 2023. The company has been authorized to purchase an additional $90 billion in common stock.
  2. Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG): Google’s parent company spent $14.557 billion on share buybacks this year after spending only $13.3 billion on them during Q1 2022. It is authorized to purchase an additional $70 billion of its Class A and Class C shares.
  3. Meta Platforms (NASDAQ:META): This company increased its share buybacks this year. It purchased $10.374 billion in META stock during Q1 2023 after adding $7.52 billion in Q4 2022. In early 2023, the social media giant announced it had received authorization to purchase an additional $40 billion in stock.
  4. Microsoft (NASDAQ:MSFT): Microsoft slightly upped its share buybacks in Q1 2023, purchasing $5.509 billion in shares after adding $5.459 during the previous quarter. In September 2021, it received board authorization to repurchase $60.0 billion worth of MSFT stock—as of this quarter, $26.9 billion remains.
  5. T-Mobile US (NASDAQ:TMUS): This wireless network and mobile phone producer added $4.806 in TMUS stock during Q1 2023. Its share buybacks have been increasing steadily since Q1 2022. It is authorized to purchase an additional $5.5 billion worth of shares through September 2023.
  6. Berkshire Hathaway: It’s no surprise that Buffett’s company would be heavily invested in share buybacks. Berkshire Hathaway has been buying up an increasing amount of its own shares since Q1 2022. Most recently, it purchased $4.45 billion in shares during Q1 2023. As Street Insider reports:

    “Berkshire’s common stock repurchase program permits Berkshire to repurchase its shares any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charlie Munger, Vice Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.”

  7. Exxon Mobil (NYSE:XOM): This oil giant spent $4.34 billion on share buybacks during Q1 2023 after purchasing $4.675 billion worth of shares during the previous quarter. During 2022 Q4, Exxon announced it would expand its $30 billion share-repurchase program to $50 billion.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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