Stock Repurchases Methodology
Predicated on the values-based statement: publicly accessible.
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During the 1980s in the United States it became legal for publicly traded companies to repurchase or buyback their own stock. Prior to this, stock buybacks were considered a form of self-dealing that would encourage company executives, often compensated with stock, to deploy less capital in investments and workers and more capital into temporarily inflating their company’s stock. Since stock buybacks became legal in the US, capital investments made by publicly traded corporations have steadily declined, workers wages have not kept up with profitability all while buybacks have steadily increased.
In the United States, publicly traded corporations are required to report the amount they spend repurchasing their own company stock to the Securities and Exchange Commission (SEC). These SEC-reported repurchase figures represent publicly accessible, directly measurable and independently verified data points for inclusion in a Spendwell ranking. This data is typically reported at a corporation’s fiscal year end. This Spendwell ranking is predicated on the values-based statement that a corporation should spend less on buying back its own stock.
Corporations that spend less money repurchasing their own stock rank higher than those spending more on buybacks. In order to account for fluctuations in annual income, board repurchase approvals and other variances, Spendwell reports on the last five available years of a company’s repurchase history.
In some reporting instances, Spendwell’s rankings will include private companies which will have no stock repurchase information. Private companies do not repurchase stock and will be ranked accordingly. All corporations with accessible buyback information are ranked based on the previously mentioned data reported to the SEC through end-of-year or annual reports, which can be accessed through the SEC’s Edgar search tool here:
Search for a company by name to view its filed 10-k reports.
For Spendwell's ranking purposes, stock buyback data is considered and compared to other companies based on the year in which a fiscal year actually ends, which is not necessarily the company's reported or designated fiscal year.