stock buy backs and price level-

this study at CXO suggest that stock buy backs following sizable stock price declines (
buying weakness) have seen greater future excess return than buy backs in general...
http://www.cxoadvisory.com/blog/external/blog3-16-07/

in my 'sponsored but unloved' portfolio I am betting the same would hold true of companies
with insider buying and/or institutional buying.

Last edited on: 04-07-2007 01:18 pm

In this portfolio 'Sponsored' refers to my objective to own companies with one or all of:
form 4 activity (insider buying)
form 13 (institutional buying)
company buying back stock greater than 4% of mkt cap

'Unloved' refers to my objective of not over paying for the stocks.
Daily, weekly and monthly RSI levels should be considered. It is not uncommon for the
share price to be pushed up (HIGH RSI) as a consequence of the sponsor's buys. This is
especially true in small caps. This is not to say that these overbought stocks cannot
continue higher, but it does skew the risk return to such a degree that I may not wish to
participate. On the other hand a stock which is trading at low RSI levels on all 3 time
sets AND has sponsors stepping up to the plate (buying into weakness) is my preferred set
up to begin a position in the stock.

Form 4
Definition

A document required by the SEC and the appropriate stock exchange to announce changes in
the holdings of directors, officers, and shareholders owning 10% or more of the company's
outstanding stock.

RSI
Definition

Relative Strength Index. A technical analysis indicator which measures the magnitude of
gains over a given time period against the magnitude of losses over that period. The
equation is RSI = 100 - 100 / (1 RS) where RS = (total gains / n) / (total losses / n)
and n = number of RSI periods. The value can range from 1 to 100. Some technical analysts
believe that a value of 30 or below indicates an oversold condition and that a value of 70
or above indicates an overbought condition.

what is form 4 activity and RSI?

pqe now pqes