Do I sense we have some frustrated managements talking today? I am referring to how fed up they are about how low their stocks are vs. where they should be, and they are doing something about it.
Tonight I have General Mills (GIS) on, and CEO Ken Powell has taken his share count down from 648 million in 2013 to 598 million now.
Toll Brothers (TOL) , not really known as an acquirer of its own stock, took its count down from 184 million to 173 million in the last year.
Best Buy's (BBY) been a consistent buy, with its share count going from 406 million in 2011 to 320 million now.
Now we often hear that managements buy back stock just to shrink the denominator to show better earnings growth. We also hear they buy back stock because they have nothing else good to do with the money. No growth prospects. Otherwise they would be investing in that growth.
But I think sometimes managements just think the market has their stocks wrong. That they aren't getting credit for what's good about what they are accomplishing and for their execution.
You can tell from the conference call that Best Buy sure thinks that way. They have reinvented the company so many times, from a record store to a cellphone store to a television store to an appliance store that's got a terrific home theater franchise. But have they gotten an ounce of credit for it?
Nope. At least not until this morning, when those who were betting against the stock and those who have hung on were rewarded with both a way-better-than-expected quarter and a good outlook that few expected, in part because of magnificent 8% appliance sales.
I am sure that Executive Chairman Bob Toll just got tired of looking at his stock and his namesake company went to town, buying back 2% of Toll's shares at $26.33. Nice buy, up four.
I am not saying he's gaming the market. I am saying Toll's stock has lagged some homebuilders' stocks that are simply not as good as Toll's. I think he and his team have had enough with the Street not getting what they have accomplished, which is building a top-notch national homebuilder that basically owns the high end wherever they go.
General Mills? What can I say about this company? It has growth areas galore. But it has cash flow like few other companies and it has been a serial acquirer of stock for ages, not to mention a terrific dividend payer.
Just listening to Powell and his team at a recent analyst day, I have to say that they, too, are just not getting credit for reinventing this company on the fly. If no one wants the stock, he'll take it.
All three companies have something to crow about. But only a few Wall Streeters seem to be listening, so they have taken matters into their own hands.
I like those hands. They are assuring good earnings and -- more important for our purposes -- great stocks!