Menu
Buyback activity increased last week with 13 companies announcing buybacks last week compared to 11 companies in the prior week. Seven of these companies were financial companies. Several massive buyback announcements in January helped the month set a multi-year record as seen below.
Teradyne (TER)
The large $2 billion buyback announcement by Teradyne (TER) caught our attention last week. This Massachusetts based, $15.6 billion company delivers manufacturing automation across industries, and applications globally. The company uses robotics to automate tasks and provides automated test equipment (ATE).
Teradyne’s automatic test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
On January 25, 2023, Teradyne’s Board authorized a $2 billion share repurchase program and the company expects to repurchase up to $500 million of its common stock in 2023. The Board also declared a quarterly cash dividend of $0.11 per share, payable on March 17, 2023 to shareholders of record as of the close of business on February 17, 2023.
Teradyne reported earnings for the fourth quarter and fiscal year 2022 last week. Fourth quarter sales were $732 million, with $481 million of revenue coming from Semiconductor Test, $100 million from System Test, $40 million from Wireless Test and $110 million from Industrial Automation (IA). This was approximately $20 million above the mid-point of the company’s guidance. Non-GAAP EPS was $0.92.
For the full year 2022, the company reported revenue of approximately $3.2 billion. QUALCOMM was Teradyne’s largest customer last year. The company reported its second-highest revenue in 2022, following a record in 2021. The drop was mainly due to reduced demand in SOC test.
“We delivered better than expected results in the fourth quarter on higher revenue and gross margins and lower expenses than planned,” said Teradyne CEO Mark Jagiela. “Increased shipments of our Eagle products serving the automotive and industrial chip markets combined with stronger demand for UR cobots in the quarter drove the improved results.”
Teradyne returned $822 million to its shareholders through share repurchases and dividends and ended the year with $1 billion of cash and marketable securities. The company sports gross margin of over 59%, net margin of nearly 23% and trades at a forward EV/EBITDA of 20.
Welcome to edition 44 of Buyback Wednesdays, a weekly series that tracks the top stock buyback announcements during the prior week. The companies in the list below are the ones that announced the most significant buybacks as a percentage of their market caps. They are not the largest buybacks in absolute dollar terms. A word of caution. Some of these companies could be low-volume small-cap or micro-cap stocks with a market cap below $2 billion.
Top 5 Stock Buyback Announcements
1. Teradyne, Inc. (TER): $100.17
On January 26, 2023, the Board of Directors of this automatic test equipment manufacturer, authorized a $2 billion share repurchase program, equal to 12.34% of its market cap at announcement. The company expects to repurchase up to $500 million of its common stock in 2023.
| Market Cap: $15.84B | Avg. Daily Volume (30 days): 1,667,924 | Revenue (TTM): $3.16B |
| Net Income Margin (TTM): -14.13% | ROE (TTM): 28.54% | Net Debt: $761.5M |
| P/E: 24.10 | Forward P/E: 23.20 | EV/EBITDA (TTM): 15.24 |
2. Caci International Inc. (CACI): $301.95
On January 26, 2023, the Board of Directors of this provider of technology products and services, approved a $750 million share repurchase program equal to 10.44% of its market cap at announcement. On January 30, 2023, the company entered into an accelerated share repurchase agreement to repurchase $250 million of common stock under its previously announced $750 million share repurchase authorization.
| Market Cap: $7.24B | Avg. Daily Volume (30 days): 178,900 | Revenue (TTM): $6.48B |
| Net Income Margin (TTM): -16.13% | ROE (TTM): 11.96% | Net Debt: $1.74B |
| P/E: 19.99 | Forward P/E: N/A | EV/EBITDA (TTM): 13.84 |
3. Jacobs Solutions Inc. (J): $121
On January 25, 2023, the Board of Directors of this provider of consulting, technical, scientific, and project delivery services, authorized the purchase of up to $1 billion of Jacobs’ common stock, equal to 6.48% of its market cap at announcement.
| Market Cap: $15.64B | Avg. Daily Volume (30 days): 565,564 | Revenue (TTM): $14.92B |
| Net Income Margin (TTM): 43.71% | ROE (TTM): 10.70% | Net Debt: $3.03B |
| P/E: 24.81 | Forward P/E: 16.56 | EV/EBITDA (TTM): 14.76 |
4. Blackrock Inc. (BLK): $747.86
On January 25, 2023, the Board of Directors of this investment manager authorized the repurchase of an additional 7 million shares under the company’s existing share repurchase program for a total of up to approximately 7.9 million shares of BlackRock common stock, equal to 4.67% of its market cap at announcement.
| Market Cap: $113.70B | Avg. Daily Volume (30 days): 760,503 | Revenue (TTM): $17.87B |
| Net Income Margin (TTM): -7.14% | ROE (TTM): 12.97% | Net Debt: $1.84B |
| P/E: 22.35 | Forward P/E: N/A | EV/EBITDA (TTM): 16.91 |
5. Hancock Whitney Corp. (HWC): $49.89
On January 26, 2023, the Board of Directors of this financial holding company authorized a stock buyback program pursuant to which the Company may purchase up to 4,297,000 shares of its outstanding common stock (approximately 5% of the shares of common stock outstanding as of December 31, 2022), replacing the previous stock buyback program that expired on December 31, 2022.
| Market Cap: $4.42B | Avg. Daily Volume (30 days): 508,745 | Revenue (TTM): $1.41B |
| Net Income Margin (TTM): 6.93% | ROE (TTM): 14.95% | Net Debt: $1.13B |
| P/E: 8.61 | Forward P/E: 8.14 | EV/EBITDA (TTM): N/A |
If you are reading this article and have not signed up to receive such articles by email, please sign up either for our free, IA Plus or IA Premium service here. If you are an existing subscriber, you can login to the InsideArbitrage.com website to adjust the kinds of articles you receive by email by turning on or turning off specific categories of articles.