Is it always a positive sign when a company buys back shares?

Creezy answered 3 months ago …

Actually, no it isn't. It really all depends on WHY they're buying back shares. If it's a tech company like Dell or Cisco and they're buying back shares to reduce the number of shares outstanding due to large number of employees exercising stock options, then this is probably either a neutral move and possibly a bad one. If a company is using its hard earned capital to take shares off of the open market because massive stock option grants are diluting their stock returns, then they don't have that capital available for business improvements, etc. So you have to look a little deeper when you see a company buying back stock -- always ask WHY when it comes to the market!