Do Keep an Eye on Companies Buying Back 5%-10% of Their Stocks

1. Good quality companies try to buy back the shares with in the restriction of stock market to ensure a safe hold on the company and same speaks of their faith in the performance of the company.

2. I tracked Surana Telecom in year 2004-05 when the said stock was being purchased by promoters and found that the company promoters were giving shock to investors where they used to offload their stake as and when the stock price rose and the investors always burnt their hands. Thus do have an eye on promoters stake and see their increase or decrease in holding to understand the likely future valuation of the company.

3. An interesting article from the web deserves a reading to avoid being caught off guard.