11 Stocks with the Biggest Buybacks

Published on January 18, 2024 at 8:31 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a detailed look at the 11 Stocks with the Biggest Buybacks. For a quick overview of such stocks, read our article 5 Stocks with the Biggest Buybacks.

Share buyback activity is making a strong comeback after remaining muted immediately after the pandemic. In December 2023, a Wall Street Journal report cited data from VerityData which said that accelerated share repurchases (ASRs) were on track to post their second-best quarter since the beginning of the COVID-19 pandemic. Unlike normal stock buybacks, which give companies an extended period of time to buy back shares and maneuver around any market changes and uncertainty, ASRs require contracts with investment banks which require companies to sell their stock upfront at a set price.

Stock buybacks remain one of the most commonly deployed ways by companies to return rewards to shareholders. Data shows that between 2012 and 2021, public companies distributed $11 trillion to shareholders mostly via stock buybacks.

Methodology

For this article we used a report from S&P Dow Jones Indices which compiled data on share buyback activity in 2022 and 2023. From this detailed report we picked 11 companies with the highest amount of share buybacks in terms of dollar value in the 12-month period ending September 2023. For these companies we have also mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator

11. Booking Holdings Inc (NASDAQ:BKNG)

Stock Buybacks in 12 Months Through September 2023: $10.23B

Booking Holdings Inc (NASDAQ:BKNG) is one of the stocks with the biggest buybacks in the 12-month period ending September 2023. Booking Holdings Inc’s (NASDAQ:BKNG) share buybacks in this period are worth about $10.23 billion.

Earlier this month, Wedbush Securities called Booking Holdings Inc (NASDAQ:BKNG) its top travel pick for 2024. Wedbush’s analyst Scott Devitt set a $3,850 price target on the stock with an Outperform rating. The analyst praised Booking Holdings Inc’s (NASDAQ:BKNG) margins which he believes are driven by solid marketing and management. Wedbush said it expects long-term margins for Booking Holdings Inc (NASDAQ:BKNG) to trend toward +35% with excess cash allocated to buybacks.

As of the end of the third quarter of 2023, 81 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Booking Holdings Inc (NASDAQ:BKNG).

ClearBridge Sustainability Leaders Strategy made the following comment about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2023 investor letter:

“Also in the consumer discretionary sector, Booking Holdings Inc. (NASDAQ:BKNG) shares rose as travel and leisure companies continued to fare well, with a strong summer season of travel driving positive sentiment. Booking maintains a strong competitive moat, in terms of direct traffic share and marketing efficiency, and its strength in alternative accommodations. These are growing faster than hotels and reached 34% of lodging room nights during the third quarter, which was notable as Booking has yet to reach full feature parity versus rival Airbnb (ABNB) — suggesting there is some room to grow there.”

10. NVIDIA Corp (NASDAQ:NVDA)

Stock Buybacks in 12 Months Through September 2023: $10.4B

NVIDIA Corp (NASDAQ:NVDA) ranks 10th in our list of the stocks with the biggest buybacks over the past 12 months through September 2023.

In August 2023 NVIDIA Corp (NASDAQ:NVDA) said it would buy back a whopping $25 billion of its shares. The move surprised many since the stock had already tripled in 2023 through the time of this buyback announcement.

Bank of America analyst Vivek Arya said in a note earlier this month that NVIDIA Corp (NASDAQ:NVDA) could generate about $100 billion in incremental free cash flow over the next two years. The analyst has a $700 price target and a Buy rating on NVIDIA Corp (NASDAQ:NVDA) shares.

As of the end of the third quarter of 2023, 180 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in NVIDIA Corp (NASDAQ:NVDA). The most notable hedge fund stakeholder of NVIDIA Corp (NASDAQ:NVDA) was Rajiv Jain’s GQG Partners which owns a $6.1 billion stake.

In its fourth quarter 2023 investor letter, ClearBridge Large Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA):

“Much of that differential can be attributed to the performance of the Magnificent Seven (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla), a basket of mega cap growth stocks that accounted for 47.8% of the benchmark return for the quarter and 65.4% for 2023.

The ClearBridge Large Cap Growth Strategy maintains exposure to six of the seven stocks, with overweights in Amazon.com, Meta and NVIDIA Corporation (NASDAQ:NVDA). Those three stocks, as well as Microsoft, were among the leading contributors to Strategy performance for the quarter. Microsoft and Nvidia continued to be supported by strong execution and leadership positions in the implementation of generative artificial intelligence (AI).

These are high-quality, cash flow generative businesses that we will continue to own, actively adjusting our positioning sizes based on risk/reward and portfolio construction priorities. With Nvidia shares more than tripling in 2023, we opportunistically took profits throughout the year, an approach that continued in the fourth quarter with additional trims that brought the position down to 6% of overall assets.

Active management of our mega cap exposure contributed to the Strategy outperforming the benchmark both in the fourth quarter and through the narrow leadership market of 2023. We also attribute these improved results to solid stock picking, being opportunistic in adding to or initiating new positions in growth companies at or near the bottom of their earnings cycle, and maintaining a commitment to diversification across our three buckets of growth: select, stable and cyclical.”

9. Comcast Corporation (NASDAQ:CMCSA)

Stock Buybacks in 12 Months Through September 2023: $11.3B

Comcast Corporation (NASDAQ:CMCSA) carried out $11.3 billion worth of share buybacks in the 12-month period through September 2023, according to data from S&P Dow Jones Indices.

Comcast Corporation (NASDAQ:CMCSA) management talked about dividends, share buybacks and other important business updates during Comcast Corporation’s (NASDAQ:CMCSA) third quarter earnings call in October 2023:

Since the end of 2018, we have refinanced over $40 billion or nearly 40% of our debt obligations, reduced net debt from $108 billion to $88 billion today, lowered net leverage by a full turn from 3.3 times to 2.3 times, increased the average life of our debt by more than four years to 17 years, while reducing the weighted average cost of our debt to 3.6% from 3.8%. Today, 97% of our debt is at fixed rates compared to just 82% at the end of 2018. We accomplished this while at the same time returning $45 billion to shareholders, including $24 billion via share repurchases and $21 billion in dividends. To sum up, we’re in a great place, especially given how the competitive dynamics in our industry might evolve in this higher-for-longer interest rate environment.

Read the entire earnings call transcript here.

ClearBridge Large Cap Value Strategy made the following comment about Comcast Corporation (NASDAQ:CMCSA) in its Q3 2023 investor letter:

“Long-term holdings Charter and Comcast Corporation (NASDAQ:CMCSA) delivered strong second-quarter results relative to expectations; their stable recurring revenue streams and undemanding valuations were rewarded in the current environment. Cable multiples compressed over the past 24 months on fears of heightened competition in their core broadband business from fixed wireless and fiber providers. While fiber remains a competitive alternative to cable broadband over the long term, high upfront investments and a materially higher cost of capital are resulting in slower buildouts than previously expected. Fixed wireless also continues to gain traction, particularly in rural markets, but share gains also appear to be moderating. At the same time, both Comcast and Charter are expanding their footprints into rural and adjacent markets while gaining wireless market share, leveraging their mobile virtual network operator agreements with Verizon. We think both cable companies are well-positioned to continue to grow while generating substantial free cash flows. We added to Comcast during the quarter.”

8. Visa Inc (NYSE:V)

Stock Buybacks in 12 Months Through September 2023: $12.2B

Visa Inc (NYSE:V) ranks 8th in our list of the stocks with the biggest buybacks. Data from S&P Dow Jones Indices shows that Visa Inc (NYSE:V) had $12.2 billion in share buybacks in the one-year period through September 2023. In October, Visa Inc (NYSE:V) announced a whopping $25 billion stock buyback plan and upped its dividend by 16%.

As of the end of the third quarter of 2023, 167 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Visa Inc (NYSE:V).

In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):

“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% yearon-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”

7. T-Mobile Us Inc (NASDAQ:TMUS)

Stock Buybacks in 12 Months Through September 2023: $13.6B

T-Mobile Us Inc (NASDAQ:TMUS) has been announcing and conducting frequent stock buybacks. In September 2023, T-Mobile Us Inc (NASDAQ:TMUS) announced a new shareholder cash return program worth about $19 billion. T-Mobile Us Inc (NASDAQ:TMUS) also announced it intends to pay dividends of about $3.75 billion on a quarterly basis from October 1, 2023, to December 31, 2024.

Citi analyst Michael Rollins recently said T-Mobile Us Inc (NASDAQ:TMUS) remains his “top-ranked buy.” The analyst said he continues to like opportunities for “T-Mobile to grow service revenue faster than the category, expand margins, and return capital to shareholders at an elevated pace.” Rollins has a $176 price target on the stock.

As of the end of the third quarter of 2023, 79 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in T-Mobile Us Inc (NASDAQ:TMUS). The biggest hedge fund stakeholder of T-Mobile Us Inc (NASDAQ:TMUS) during this period was Warren Buffett’s Berkshire Hathaway which owns a $734 million stake in T-Mobile Us Inc (NASDAQ:TMUS).

ClearBridge Dividend Strategy made the following comment about T-Mobile US, Inc. (NASDAQ:TMUS) in its Q3 2023 investor letter:

“During the quarter we initiated positions in two new names: T-Mobile US, Inc. (NASDAQ:TMUS) and Gilead Sciences. T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns.

This combination — superior service at lower prices — has enabled T-Mobile to outgrow its competition. In the three years since completing its merger with Sprint, T-Mobile has grown its post-paid subscriber base by about 22%. Over the same period, AT&T’s has grown by about 14%, while Verizon’s by less than 5%.

Given the high fixed-cost nature of the wireless business, these steady increases in revenue growth have led to outsize increases in profits and free cash flow. Free cash flow in 2023 is expected to come in around $13.5 billion, up from less than $8 billion last year. In 2024 free cash flow is expected to grow by over 20% to approximately $17 billion — providing a 10% yield based on today’s stock price.

We have long admired T-Mobile, but until recently the stock did not pay a dividend. The company announced its inaugural dividend in September, and we bought the stock shortly thereafter. The initial yield is about 2% and it is expected to grow about 10% per year.”

6. Chevron Corporation (NYSE:CVX)

Stock Buybacks in 12 Months Through September 2023: $14.7B

Chevron Corporation (NYSE:CVX) is one of the prominent stocks with the biggest buybacks. Over the past 12 months Chevron Corporation’s (NYSE:CVX) share buybacks are worth $14.7 billion through September 2023. In January 2023, the oil giant announced an eye-popping $75 billion stock buyback program, which Chevron Corporation (NYSE:CVX) later said will start from April 1, 2023, and does not have a fixed expiration date. Chevron Corporation’s (NYSE:CVX) previous buyback program worth $25 billion started in January 2019 and ended March 31, 2023.

As of the end of the third quarter of 2023, 72 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Chevron Corporation (NYSE:CVX). The most significant stakeholder of Chevron Corporation (NYSE:CVX) during this period was Warren Buffett’s Berkshire Hathaway which owns an $18.6 billion stake in Chevron Corporation (NYSE:CVX).

Ariel Focus Fund made the following comment about Chevron Corporation (NYSE:CVX) in its third 2023 investor letter:

“Also in the quarter, we initiated a position in Chevron Corporation (NYSE:CVX), the second largest integrated energy company in the U.S., operating in exploration, production and refining on a global scale. We view the company as competitively advantaged with a strong balance sheet, sustainable growth pathway and an effective management team. Going forward CVX expects improved cost efficiencies and production growth via its differentiated position in the Permian Basin and recent acquisition of Noble Energy. Additionally, management believes a combination of its new higher-margin projects along with operational improvements will drive a double-digit return of capital employed by 2027. Although oil and gas prices, which lay outside of the company’s control, ultimately dictate Chevron’s earnings and cashflow profile, the organization is laser focused on capital discipline. It is this lack of predictability, and potential fear of a global recession which presented us with an opportunity to initiate a position in this high barrier to entry producer at reasonable prices.”

Click to continue reading and see the 5 Stocks with the Biggest Buybacks.

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Disclosure. None. 11 Stocks with the Biggest Buybacks was initially published on Insider Monkey.

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