Sears Buys Back its Stock, Great Idea

According to its most recent earnings report, Sears Holdings(NASDAQ: SHLD) has been busy buying back its own stock. Warren Buffet, if he was a shareholder, would approve.

Generally investors want to increase their shareholder value. While nothing beats a thriving and expanding business, sometimes things like a poor economy get in the way. It is during these times that any excess cash should be used to buy back shares at a lower market price rather than when the economy improves and the market prices your stock higher. Some investors looking for income look for dividend stocks. Others see dividends as a sign of strength.

WWBD? What Would Buffet Do? He would invest in the stock thats not paying a dividend but is instead investing in its own business by either expanding operations, buying rivals, or buying back stock. With every stock representing a slice of the pie, with the pie sliced into fewer pieces, each shareholder gets a bigger slice. Simple. Also would you want to invest in a company thats investing in itself or a company that cant find anything to do with its money so it gives it to its shareholders?