Buybacks vs. IPOs

By Ramesh Akkineni
Promoters of companies sell shares to the public when the prices are high and buy back from them when prices are low. We too have to do the same thing. We have to watch for buybacks and not for IPOs to buy the shares. When a company is buying back big percent of stock from the public it is usually a sign that it is undervalued. We can just notice the buyback price and buy below that price. But it is best if we ourselves have an independent idea of the intrinsic value of the company without relying on outside opinion.

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