Value Of U.S. Equity Buybacks In May Drops

A review of announced equity buybacks conducted by U.S. companies in the first five months of 2014 finds 372 stock repurchase declarations with an aggregate disclosed value of $130.5 billion, according to data from S&P Capital IQ.

When compared to the 352 announcements totaling $168.8 billion in the first five months of 2013, this may lead some to question companies' continued hunger for their own stock. Equity buyback announcements of $1 billion or greater shows a smaller proportion taking place this year than last year.

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Of the 352 announcements at this time last year, 42, or 12 percent, were for buybacks of $1 billion or more. So far in 2014, buyback announcements of that size total only 39 of 372 buybacks, or 10.5 percent. Another sign of possible softening in companies' desire to acquire their own shares is the finding that the disclosed value of equity buybacks involving U.S. companies totaled just $20.4 billion in May 2014. This is the second-lowest monthly value of 2014, behind March's $18.5 billion.

Gilead Sciences's GILD proposed $5 billion equity buyback represents nearly 25 percent of the month's dollar value. One positive sign for equity buyback activity is the fact that May's total of 92 announcements represents an improvement from the previous month's count of 62 announcements.