Potash Corp. of Saskatchewan Inc., a Canadian fertilizer maker, said last week its board approved the repurchase of up to 15.8 million shares, or about 5 percent of its outstanding common stock, over a one-year period. The company also issued first-quarter and full-year 2008 earnings guidance above Wall Street estimates, as robust global demand for agricultural products and fertilizers is expected to continue. The stock has a forward PE of 17.

F5 Networks Inc., which makes software to help manage Internet traffic, said last week that its board has approved the repurchase of up to $200 million of its common stock. The software maker F5 Networks Inc. also recently reported better first-quarter results than many investors expected, and a Robert W. Baird & Co. analyst upgraded the stock based on its low valuation. In upgrading the stock to "Outperform" from "Neutral," analyst Kenneth Muth said that even though fiscal first-quarter revenue fell slightly below his estimate, several of the company's segments actually outperformed. Also, the company's fiscal second-quarter guidance, though just shy of Wall Street's consensus, may boost the stock since many investors had low expectations.

J.M. Smucker Co., the largest U.S. producer of jams and jellies, said Tuesday it increased its buyback program by 5 million shares. The stock trades for 9x cash flow.

Investment bank Jefferies Group Inc. said last week that its board of directors approved an expansion of its buyback program by 15 million shares. The investment bank currently has about 1 million shares available for repurchase under a previous plan, bringing the total authorization to 16 million. The stock has a forward PE of 12.

All we seem to be talking about these days is the U.S. economic slowdown. It's a good time, however, to identify companies that will yield positive returns despite a slowdown. Trimble Navigation has announced a buyback, indicating that the company sees value in its shares. Trimble's board has approved a share-buyback program worth up to $250 million, starting Feb. 1. The company's revenue climbed 26% to $296 million in the third quarter ended Sept. 29. Operating income rose 21% to $44 million, while operating margins contracted to 14.8% from 15.5% in the third quarter of 2006. GAAP EPS remained flat at 22 cents. CFO Rajat Bahri said that deferred revenue had grown 27% in the three months, taking the deferred revenue figure up 170% year-over-year to $66 million. Trimble has raised its earnings guidance for the fourth quarter to between 28 and 29 cents a share from its earlier forecast of 24 to 26 cents a share. The revenue projection was also upped to between $311 million and $313 million, from the prior guidance of between $295 million and $300 million. Trimble also confirmed its 2008 revenue growth projection of 14%-17%. Shares of the company, which provides positioning solutions to corporate and government organizations, have felt the pressure of slowdown-related concerns. They have tumbled since early November, when they were trading above $40. Earlier this month, analysts at Wedbush Morgan slashed the price target for Trimble from $49 to $32, citing concerns over the long-term impact of macro conditions on the Engineering & Construction division. Last week, Wedbush raised the price target up to $36. Wedbush Morgan has a buy rating for Trimble. Davenport & Company upgraded Trimble earlier last week from neutral to buy on account of the decline in shares. The analysts said in their note to clients that the company could benefit from overseas demand. Trimble's latest guidance indicates that a soft housing construction market will not have as large an adverse impact on the company as was feared by investors, analyst Yair Reiner of Oppenheimer & Co said. The Associated Press quoted Reiner as having said in a telephone interview, "I think the fact that they're planning to go ahead with this buyback suggests they're not worried about their cash flows next year." Although Trimble does have exposure to the U.S. slowdown, its international operations account for more than 50% of its revenues. Even though the Engineering & Construction division's growth may decelerate, the performance of the Field Solutions and Mobile Solutions businesses is likely to be strong. While the buyback announcement and raised guidance have given a boost to shares, the earnings release after the close could add some more weight to the shares.

When a company repeatedly buys back its stock, it indicates that the company continues to see value in its shares. Amphenol has recently raised its buyback plan. Amphenol's board has authorized a doubling of its ongoing share-repurchase program, raising the approval to 20 million shares. There are currently 178.5 million shares outstanding. The closing date has been extended to Jan. 31, 2010, and as of Jan. 17, the company had repurchased about 9.7 million shares under the existing program. In terms of the numbers, Amphenol beat expectations for fourth-quarter sales and EPS. Sales were up 18% in U.S.-dollar terms and 14% in local currencies, and the company achieved good profitability, with diluted EPS jumping 28% to $0.55. They are expecting double-digit sales and profit this year, while they expressed caution over an economic slowdown. Revenue was projected at between $3.1 billion and $3.18 billion, and EPS at between $2.18 and $2.25. Additionally, the company has a P/E/G ratio of 0.92 and has achieved a strong ROE of 32.58%. Analyst Mario Ricchio of Zacks Investment Research downgraded Amphenol from buy to hold, while setting a price target of $42.25. Ricchio said in a recent note that he expects Amphenol's earnings growth to decelerate to 11% in fiscal 2008 from 40% in fiscal 2007, due to tough comps and economically sensitive end markets. On Jan. 2, Stifel Nicolaus downgraded its rating from buy to hold, saying that the company would face great difficulty in achieving EPS growth of 20% this year. RBC Capital Markets, which has an outperform rating for Amphenol, said in its note last week that the stock price is likely to be driven by acquisitions. Amphenol shares have fallen by $5 since the beginning the year, when they were trading around $45. Given the soft economic environment, I believe in the near-term, this stock could be quite volatile, but investors with longer-term horizons should do more homework on Amphenol.

Whether a company offers retail or industrial products, its foundation will be tested by the general economic slowdown. In such an environment, it is crucial to note how a company performs in a challenging scenario. But we cannot study all companies. A good place to begin is to consider companies with continued buybacks. MSC Industrial Direct has recently extended its ongoing buyback plans. MSC Industrial Direct's board has approved a buyback of up to 7 million shares. The company had 1.9 million shares remaining from its previous authorization, which have been included in the latest repurchase plan. Since the beginning of fiscal 2003, MSC has spent $260.9 million to repurchase approximately 8.1 million shares. The company executed well during the fiscal first quarter, and its financial performance was strong. The provider of industrial supplies and equipment reported an 8.8% year-over-year rise in net sales to $437.6 million, while net income climbed 16% to $46.9 million. The company's diluted EPS grew by 17% to 70 cents, from 60 cents in the year-ago quarter. The company also has a return-on-equity of 26% and a P/E/G ratio of 0.75. MSC achieved good cost control during the period, which boosted its bottom line. Also, its cash generation was healthy. However, the fiscal second quarter is expected to be tough, with customers facing rising raw-material and energy costs. The company has projected its diluted EPS for the quarter to be between 68 cents and 70 cents. CEO David Sandler said MSC is well positioned to gain market share from rivals and grow earnings against the backdrop of a general downturn. This seems slightly optimistic, however. Analysts at Robert W Baird reduced the price target for MSC to $44 from $50 while reiterating a neutral rating. The analysts said in their note to clients that although the company was taking initiatives to address a possible economic slowdown, the ISM manufacturing index was expected to remain below 50, a scenario in which MSC would find it difficult to outperform the market. Earlier in December, Bear Stearns downgraded the company from outperform to peer perform. MSC's inventory levels have been on the rise and grew last quarter as well. The company plans to adjust inventory over the rest of the fiscal year. This could put margins under pressure. Shares of the company were trading above $50 until mid-October, when MSC announced earnings guidance for the fiscal first quarter short of Wall Street expectations. The company cited uncertain market conditions as the reason. Shares are currently trading close to their 52-week low of $35.03. I believe this adequately reflects the uncertainties related to an economic slowdown. So with this company, we have a buyback, extremely smart investors and a CEO that expects to steal market share from competitors. I believe this offers value, and it is time to take a very serious look at MSC Industrial.

Cincinnati's supermarket chain said its board approved the repurchase of up to $1 billion in common stock. This new plan will replace the $1 billion plan announced in June of last year, which has approximately $6 million remaining. The time of the repurchases will depend on market conditions and will be financed through free cash flow. Kroger has been returning value to shareholders at a consistent rate since January 2000. Since then, the company has repurchased $4.8 billion in stock and spent $290 million on dividends. In an effort to maintain a superior investment grade rating, Kroger has also reduced total debt by $1.5 billion since January 2000. Kroger’s CEO and Chairman, David B. Dillon said, "The new share repurchase authorization reflects our confidence in the Company's Customer 1st strategic plan and our belief that Kroger shares represent an attractive investment opportunity." We were also glad to see that company leaders are buying shares for their own accounts. In December, company director Robert Beyer spent about $1 million buying 40,000 shares at an average price of $26.79. Credit Suisse upgraded the stock to outperform and argues that the 8% sell off since the company reported third quarter earnings in November is unwarranted. Analyst Edward Kelly believes the disappointment was mostly driven by a drop in fuel earnings. But seeing as fuel earnings are extremely volatile from quarter to quarter, they make a terrible indicator of Kroger's overall business. After all, Kroger did report earnings of 37 cents a share, beating the consensus of 35 cents a share and surging 23.3% past last year’s earnings. Kelly believes the long-term outlook sill remains strong. Kroger has the industry leading ID growth, which is expected to continue into 2008, and impressive margin expansion. In volatile markets where recession fears are looming, a defensive stock like KR becomes even more attractive. Historically, the food retail sector outperforms in a recession. Trading at 13.7x earnings, Kelly set the price target at $32, representing 20% upside potential.