August 3rd - Buyback Plays the Good and Bad

Cramer took a look at buyback programs and how not all are good. Cramer listed examples of a bad buyback and they were:

1) Borrow money for the buyback - Example TWX Time Warner Inc.
2) "Botox Buyback" Buy back shares to reduce the float of shares to raise earnings per share - Example ENR Energizer Holdings Inc.
3) "Schizophrenic Buyback" Buying stock when the price should be going down - Example PFGC Performance Food Group Co.
4) "Impotent Buyback" Buy back shares and the issue new stock - Example YHOO Yahoo! Inc.

Next Cramer looked at good examples of company buybacks.

1) Value Buyback where the stock is cheaper then their assets - Example OMM OMI Corp.

Closing Price: $22.67
After Hours High and Close: $23.05
Percent Increase: 1.7%
Trades on NYSE
Sector: Services - Shipping
Short%: 5.7%
Days to Cover: 4.4
% Held By Insiders: 4.04%
% Held By Institutions: 74.70%

Small after hours volume and increase. Large institutional holding again (although not as bad as MAS last night). It is also an ANGO no-short rule since it is trading below the high of the day of $23.08.

2) No one believes in us buyback JCP J C Penney Corporation, Inc.

Closing Price: $64.20

3) Afraid to be taken-over buyback - Example IR Ingersoll-Rand Co. Ltd. and MRX Medicis Pharmaceutical Corp.

IR Closing Price: $37.97
MRX Closing Price: $27.24

MRX had some very strange after hours prices. There were a few trades up a penny at $27.25 and then 19 shares at $32, 81 shares at $33 and 50 shares at $25.37. Probably a mistake, but makes it hard to follow.

4) Pressure Buyback - Example DVN Devon Energy Corp.

Closing Price: $64.27