Invesco BuyBack Achievers ETF (NASDAQ: PKW)

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The Fund generally will invest at least 90% of its total assets in securities that comprise the Underlying Index. Strictly in accordance with its guidelines and mandated procedures, Nasdaq, Inc. (Nasdaq or the Index Provider) includes U.S. exchange-listed common stocks in the Underlying Index pursuant to a proprietary selection methodology that identifies a universe of BuyBack Achievers.

T-mobile Us, Inc.

Johnson & Johnson

Comcast Corp Common

Lockheed Martin Corp

Booking Holdings, Inc.

Deere & Co.

Fiserv Inc.

Hca Healthcare Inc Common Stock Usd 0.01

Mckessoncorp.

Marriott International, Inc.

Raytheon Co.

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Hilton Worldwide Holdings, Inc

Cheniere Energy Inc.

On Monday, T-Mobile US, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) chief&nbsp;Mike Sievert&nbsp;cautioned investors against fourth quarter back-half risks. Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-12-09/t-mobile-warns-investors-to-be-cautious-about-4q-results?srnd=phx-technology&amp;sref=TBDibEcD" rel="noreferrer noopener">cites</a> Sievert from the UBS&nbsp;investor conference. The telecom company expects some year-end factors to drag on results after a record third quarter. The stock plunged close to 10% on Monday&#8217;s close.
Also Read: <a target="_blank" href="https://www.benzinga.com/24/12/42394872/jack-ma-makes-rare-appearance-at-alibaba-fintech-event-stresses-on-ai-revolution" rel="noreferrer noopener">Jack Ma Makes Rare Appearance At Alibaba Fintech Event Stresses On AI Revolution</a>
Sievert flagged a &#8220;pretty low&#8221; device upgrade rate behind his warning. However, T-Mobile continues to expect to deliver industry-leading customer growth, service revenue growth (~5%&nbsp;CAGR through 2027), and adjusted EBITDA growth (~7%&nbsp;CAGR through 2027).
The company&#8217;s business plan supports ~$80 billion&nbsp;in capacity for investments and shareholder returns through 2027
T-Mobile reported third-quarter revenue of $20.16 billion, topping the analyst estimate of $20.01 billion. EPS of $2.61 surpassed the analyst estimate of $2.41.
The topline performance reflects record ARPA (postpaid average revenue per account)&nbsp;growth in seven years and higher-than-expected postpaid phone net additions.
T-Mobile US added 415,000 broadband customers in <a target="_blank" href="https://www.benzinga.com/news/earnings/24/10/41501756/t-mobile-reports-strong-q3-results-service-revenues-grew-5-yoy-fcf-grew-29-raised-fy24-guidance" rel="noreferrer noopener">the third quarter</a>, hitting a 6 million total customer milestone. The postpaid phone net customer additions were 865,000, surpassing Oppenheimer <a target="_blank" href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41525139/t-mobiles-customer-growth-outpaces-verizon-at-t-combined-analysts-raise-forecasts" rel="noreferrer noopener">estimates by&nbsp;65,000</a>, beating&nbsp;Verizon Communications Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VZ#NYSE">VZ</a>)&nbsp;and&nbsp;AT&amp;T Inc&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/T#NYSE">T</a>)&nbsp;combined. Postpaid net account additions were 315,000 for the quarter.
In October, T-Mobile US said it expects net customer additions of 5.6 million-5.8 million (up from the prior 5.7 million) and core adjusted EBITDA of $31.6 billion-$31.8 billion.
Sievert told Bloomberg that T-Mobile&#8217;s fixed-wireless product will reach 12 million subscribers. He weighed whether the company could surpass the milestone.
Investors can gain exposure to T-Mobile US through Invesco BuyBack Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>) and The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>).
Price Action: TMUS stock is up 1.72% at $232.79 at the last check on Tuesday.
Also Read:
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<li><a href="https://www.benzinga.com/government/regulations/24/12/42389113/nvidia-hit-with-antitrust-probe-in-china-stock-slides" target="_blank" rel="noreferrer noopener">Nvidia Hit With Antitrust Probe in China, Stock Slides</a></li>
</ul>
Photo by viewimage on Shutterstock

News

Guidance

Tech

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CMCSA

TMUS

T-Mobile Reiterates Q4 Growth But Flags Drop In Device Upgrade Rates

T-Mobile US, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) shares are trading higher today. The company disclosed long-term <a target="_blank" href="https://www.benzinga.com/pressreleases/24/09/b40925481/fueled-by-network-leadership-and-transformative-ai-enabled-customer-experiences-t-mobile-outlines-" rel="noreferrer noopener">goals, AI deals, and a dividend hike on Wednesday.</a>
T-Mobile revealed a three-year plan to drive growth. The strategy comprises expanding its AI-driven, digital-first approach, increasing market share in underpenetrated areas, boosting broadband growth, and exploring new revenue streams.
The company exceeded its 2021 Capital Markets Day goals, including building a solid network in America, expanding market reach, and achieving $8 billion in synergies from the Sprint merger.
Apart from this, T-Mobile plans to enhance its network leadership with advanced technologies like Massive MIMO, VoNR, and 5G Advanced, backed by its nationwide 5G standalone network.
In a separate release, T-Mobile and OpenAI disclosed a transformative multi-year partnership aimed at revolutionizing customer experience. This collaboration merges T-Mobile&#8217;s deep customer relationship skills with OpenAI&#8217;s cutting-edge <a target="_blank" href="https://www.benzinga.com/pressreleases/24/09/b40922898/t-mobile-and-openai-join-forces-to-revolutionize-the-customer-experience-with-first-ever-intent-dr" rel="noreferrer noopener">AI technology and R&amp;D capabilities</a>.
T-Mobile CEO Mike Sievert said, &#8220;T-Mobile is a company on the move with tremendous opportunities in front of us to further extend our outperformance in customer growth and translate that into strong top and bottom-line growth that will enable a compelling capital return opportunity over the next few years,&#8221;
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/09/40925493/t-mobile-partners-with-nvidia-ericsson-and-nokia-to-pioneer-ai-driven-mobile-networks" rel="noreferrer noopener">T-Mobile Partners with NVIDIA, Ericsson, And Nokia to Pioneer AI-Driven Mobile Networks</a>
Outlook: T-Mobile expects service revenue between $75 billion and $76 billion and adjusted free cash flow of<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener"> $18 billion-$19 billion in 2027</a>.
T-Mobile for Business (TFB) is anticipated to deliver double-digit growth, with overall service revenue projected to grow at a 5% CAGR from 2023 to 2027.
The company now targets 12 million 5G broadband customers by 2028, significantly raising its previous goal of 7 to 8 million by 2025.
The company projects core Adjusted EBITDA growth, targeting $38 billion&nbsp;to $39 billion in 2027, reflecting a 7% CAGR at the midpoint from 2023 and a $10 billion increase from 2023 at the high end of&nbsp;guidance.
This growth is expected to be fueled by operational leverage and efficiencies from technology, AI, and digital innovation.
Dividend Boost: T-Mobile disclosed that its Board of Directors has declared a cash dividend of $0.88 per share, reflecting a 35% increase from the previous quarter.
The dividend will be payable on December 12, 2024, to stockholders of <a target="_blank" href="https://www.benzinga.com/pressreleases/24/09/b40925518/t-mobile-announces-a-35-quarterly-dividend-increase" rel="noreferrer noopener">record as of November 27, 2024</a>.
Also, the company plans to allocate around $80 billion through 2027 for investments and shareholder returns, including up to $50 billion for dividends and share repurchases (in addition to the $25 billion already returned to shareholders).
Apart from this, T-Mobile introduced T-Priority, the world&#8217;s first 5G network slice dedicated to first responders, providing advanced connectivity solutions and <a target="_blank" href="https://www.benzinga.com/pressreleases/24/09/b40925495/t-mobile-introduces-t-priority-featuring-the-worlds-first-network-slice-for-first-responders" rel="noreferrer noopener">unparalleled support for emergency situations</a>.
Investors can focus on the stock via&nbsp;The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>)and&nbsp;Invesco BuyBack Achievers ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>).
Price Action: TMUS shares are up 1.04% at $198.73 at the last check Thursday.
Photo by viewimage on Shutterstock
Read Next:
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<li><a href="https://www.benzinga.com/markets/equities/24/09/40932937/apple-iphone-16-selling-at-a-greater-rate-than-last-year-says-t-mobile-ceo-amid-reports-of-lower" target="_blank" rel="noreferrer noopener">Apple iPhone 16 Selling At A &#8216;Greater Rate Than Last Year,&#8217; Says T-Mobile CEO Amid Reports Of Lower Demand: &#8216;People Are Buying Pros, They&#8217;re Buying Maxs… They&#8217;re Buying Up The Food Chain&#8217;</a></li>
</ul>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Equities

Large Cap

T-Mobile Surpasses 2021 Capital Markets Day Goals, Sets New Ambitions, Boosts Dividend & More

On Wednesday, T-Mobile US, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) was reportedly fined $60 million by the Committee on Foreign Investment in the U.S. for failing to prevent and report unauthorized access to sensitive data.
The penalty, which is the company&#8217;s largest penalty ever, relates to violations of a mitigation agreement that German-controlled T-Mobile agreed to during its $23 billion acquisition of Sprint Corp in 2020, Reuters reports.
Related: <a target="_blank" href="https://www.benzinga.com/government/20/02/15301353/can-you-hear-it-now-everything-to-know-about-the-sprint-t-mobile-merger" rel="noreferrer noopener">Can You Hear It Now? Everything To Know About The Sprint, T-Mobile Merger</a>
According to U.S. officials, T-Mobile, which is majority-owned by Deutsche Telekom, experienced unauthorized access to sensitive data in both 2020 and 2021.
T-Mobile stated that it encountered technical issues during its post-merger integration with Sprint which impacted &#8220;information shared from a small number of law enforcement information requests.&#8221;
As per the report, the company emphasized that the data remained within the law enforcement community, was reported &#8220;in a timely manner,&#8221; and was &#8220;quickly addressed.&#8221;
One of the U.S. officials stated &#8220;The $60 million penalty announcement highlights the committee&#8217;s commitment to ramping up CFIUS enforcement by holding companies accountable when they fail to comply with their obligations,&#8221;
The officials added, &#8220;The failure of T-Mobile to report the incidents promptly delayed CFIUS&#8217; efforts to investigate and mitigate any potential harm to U.S. national security.&#8221;
Investors can focus on the stock via Simplify Exchange Traded Funds Simplify Next Intangible Value Index ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/NXTV#BATS">NXTV</a>) and Invesco BuyBack Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>).
Price Action: TMUS shares are down 0.72% at $193.92 premarket at the last check Wednesday.
Read Next:
<ul>
<li> <a href="https://www.benzinga.com/news/earnings/24/08/40110479/t-mobile-analysts-raise-their-forecasts-after-better-than-expected-q2-results" target="_blank" rel="noreferrer noopener">T-Mobile Analysts Raise Their Forecasts After Better-Than-Expected Q2 Results</a></li>
</ul>
Price Action: TMUS shares are down&nbsp;0.72%&nbsp;at&nbsp;$193.92&nbsp;premarket at the last check Wednesday.
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: viewimage on Shutterstock.com

Legal

Simplify Exchange Traded Funds Simplify Next Intangible Value Index ETF

NXTV

T-Mobile Hit With $60M Fine For Data Security Violations: Report

T-Mobile US, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) introduces the latest Google Pixel devices, including the Pixel 9 series and Pixel Watch 3, with exclusive deals, complimentary <a target="_blank" href="https://www.benzinga.com/pressreleases/24/08/b40348464/t-mobile-offers-new-google-pixels-with-exclusive-deals-free-devices-and-faster-speeds" rel="noreferrer noopener">devices, and faster network speeds</a>.
T-Mobile disclosed that it will offer $100 off the Pixel 9 Pro and $200 off the Pixel 9 Pro XL with no line or trade-in required, up to $1,000 off select Pixel models with trade-ins or new lines on Go5G Plus/Next or Go5G Business Plus/Next, and double storage at no extra cost for pre-orders of the Pixel 9 and Pixel 9 Pro XL.
Yesterday, Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>)&nbsp; announced the launch of the&nbsp;Pixel 9 Pro XL, with a starting price of&nbsp;$1,099, and Pixel 9, the latest <a target="_blank" href="https://www.benzinga.com//node/40356757" rel="noreferrer noopener">iteration of its flagship smartphone</a>.
T-Mobile said pre-orders for the Pixel 9 and Pixel 9 Pro XL begin today, with both models set to hit stores and online on August 22. The Pixel 9 Pro and Pixel 9 Pro Fold will be available starting September 4, and the Pixel Watch 3 will follow on September 10.
Last month, T-Mobile reported second-quarter EPS of $2.49, which beat the&nbsp;analyst consensus estimate, and sales of $19.77 billion, which beat the analyst consensus <a target="_blank" href="https://www.benzinga.com/news/earnings/24/07/40067376/t-mobiles-q2-earnings-net-postpaid-adds-record-free-cash-flow-subscriber-boost-and-more" rel="noreferrer noopener">estimate of $19.55 billion by 1.13%</a>.
Investors can focus on the stock via&nbsp;Simplify Exchange Traded Funds Simplify Next Intangible Value Index ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/NXTV#BATS">NXTV</a>)&nbsp;and Invesco BuyBack Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>).
Related: <a target="_blank" href="https://www.benzinga.com/news/earnings/24/08/40110479/t-mobile-analysts-raise-their-forecasts-after-better-than-expected-q2-results" rel="noreferrer noopener">T-Mobile Analysts Raise Their Forecasts After Better-Than-Expected Q2 Results</a>
Price Action: TMUS shares are down 0.72% at $193.92 premarket at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Google

GOOG

GOOGL

T-Mobile Capitalizes on Google Pixel Launch with Exclusive Offers

T-Mobile US, Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) signed a deal with KKR &amp; Co. Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KKR#NYSE">KKR</a>) to form a joint venture (JV) that will acquire Metronet&#8217;s broadband infrastructure, <a target="_blank" href="https://www.benzinga.com/pressreleases/24/07/b39931541/t-mobile-and-kkr-announce-joint-venture-to-acquire-metronet-and-offer-leading-fiber-solution-to-mo" rel="noreferrer noopener">residential fiber operations, and customer base</a>.
At closing, T-Mobile plans to invest about $4.9 billion for a 50% stake in the joint venture, acquiring Metronet&#8217;s residential fiber operations and customers, and funding the JV.
Metronet serves over 2 million homes and businesses across 17 states with its advanced fiber-to-the-home&nbsp;(FTTH) platform.
The JV will also acquire Oak Hill Capital&#8217;s stake, with Oak Hill re-investing to maintain a minority position and founder John Cinelli <a target="_blank" href="https://www.benzinga.com//node/39931764" rel="noreferrer noopener">retaining a minority stake post-closure.</a>
The JV will enhance T-Mobile&#8217;s 5G Home Internet, which already serves 5 million households, and its fiber partnerships, meeting rising demand for faster, reliable broadband.
The transaction is set to close in 2025, pending standard closing conditions and regulatory approvals.
Post-deal closure, Metronet will become a wholesale provider, and T-Mobile will take over its residential fiber operations and customers.
Moreover, Metronet will be self-funding and aims to reach 6.5 million homes by 2030, with no further capital contributions expected from T-Mobile.
Mike Sievert, CEO of T-Mobile, said, &#8220;Metronet is the perfect partner for T-Mobile as a leader in fiber solutions with an incredibly fast build pace, and a top-notch management team. Together with KKR&#8217;s strong heritage of corporate partnership and global fiber franchise, we will further expand the Un-carrier&#8217;s fiber footprint and deliver real value and choice to customers while addressing a growing demand for fast and reliable broadband.&#8221;
Investors can gain exposure to the stock via Invesco BuyBack Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>) and Simplify Exchange Traded Funds Simplify Next Intangible Value Index ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/NXTV#BATS">NXTV</a>).
Also Read: <a target="_blank" href="https://www.benzinga.com/trading-ideas/24/05/39089568/t-mobiles-game-changing-4-4-billion-deal-with-u-s-cellular-sets-new-record-highs" rel="noreferrer noopener">T-Mobile&#8217;s Game-Changing $4.4 Billion Deal With U.S. Cellular Sets New Record Highs</a>
Price Action: TMUS shares are down 0.25% at $176.12 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by viewimage on Shutterstock
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39604348/telecom-stocks-set-to-soar-goldman-sachs-previews-verizon-at-t-t-mobiles-upcoming-e" target="_blank" rel="noreferrer noopener">Telecom Stocks Set To Soar: Goldman Sachs Previews Verizon, AT&amp;T, T-Mobile&#8217;s Upcoming Earnings</a></li>
</ul>

T-Mobile Dials Up A Major Broadband Expansion: Teams With KKR To Acquire Metronet

After a lull in 2023, stock buybacks are back in vogue this year. Stock buybacks by S&amp;P 500 companies increased 9.9% year over year and 8.1% sequentially in the first quarter of 2024. The 20 largest companies in the S&amp;P 500 accounted for roughly half of the quarter&#39;s buybacks, with Apple (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>), Google-parent Alphabet (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>), Meta Platforms (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/meta#NASDAQ">META</a>), NVIDIA (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) and Wells Fargo (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/wfc#NYSE">WFC</a>) leading the way. 
As many as 352 companies repurchased shares worth at least $5 million in the quarter, up from 313 in the fourth quarter of 2023 but slightly down from 358 in the year-ago quarter. 380 companies did some buybacks, up from 373 in the previous quarter and down from 390 in the year-ago quarter.
<h3>Buyback Boosters</h3>
Information Technology sector maintained its lead, representing 24.2% of total buybacks for the quarter. Tech giant Apple dominated the list with the largest-ever share repurchase announcement worth $110 billion. In the first quarter, the company spent $23.5 billion in buybacks, up from $22.7 billion in the previous quarter. It was the 10th largest buyback in the S&amp;P 500 Index&#39;s history. 
Meta Platforms spent $18.2 billion in the first quarter, followed by spending of $15.7 billion for Google and $9.5 billion for NVIDIA. 
The Finance sector increased its buybacks by 46.5% to $43.1 billion, accounting for 18.2% of total S&amp;P 500 buybacks. Wells Fargo was at the forefront, spending $6.0 billion during the quarter.
<h3>Why Buybacks?</h3>
Stock buyback, also known as stock repurchase, happens when a public company uses cash to buy shares of its own stock from the open market. Stock buybacks typically increase when earnings rise. U.S. companies wrapped their best earnings season in nearly two years. 
A surge in buybacks will likely boost earnings per share, thereby driving stocks higher. Investors should note that share buybacks have been the biggest driver of equities over time in the medium term. In recent decades, share buybacks have overtaken dividends as the preferred way to return cash to shareholders. 
When a company announces a buyback program, it often signals that management believes the stock is undervalued. This instills confidence in investors and attracts more buyers, potentially leading to an increase in demand and share price. 
Investors seeking to ride the share buyback boom may bet on Invesco BuyBack Achievers ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>).
<h3>PKW in Focus</h3>
Invesco BuyBack Achievers ETF tracks the NASDAQ US Buyback Achievers Index, which comprises companies that have reduced shares outstanding by 5% or more in the trailing 12 months. It holds 203 stocks in its basket, with none of the firms accounting for more than 5.7% of the assets. Consumer discretionary and financials are the top two sectors, accounting for at least 20% share each, while industrials, healthcare and communication services round off the next three spots with double-digit exposure each. 
PKW is the only ETF in the buyback space, with AUM of $1.1 billion and an average daily volume of 14,000 shares. It charges an annual fee of 62 bps.
<a href="https://www.zacks.com/stock/news/2291021/s-p-500-firms-boost-stock-buybacks-in-q1-etf-to-tap?cid=CS-BENZ-FT-etf_news_and_commentary-2291021">To read this article on Zacks.com click here.</a>

Earnings

Markets

Trading Ideas

ETFs

AAPL

NVDA

S&P 500 Firms Boost Stock Buybacks in Q1: ETF to Tap

T-Mobile US, Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) disclosed that the U.S. Department of the Navy has chosen it as a wireless solutions provider under the $2.67 billion<a target="_blank" href="https://www.benzinga.com/pressreleases/24/06/b39311318/t-mobile-selected-by-u-s-navy-for-2-67-billion-10-year-contract" rel="noreferrer noopener"> Spiral 4 contract for the next ten years</a>.
This agreement enables all Department of Defense agencies to procure wireless services and equipment from T-Mobile.
The Department of Defense will have the opportunity to leverage T-Mobile&#8217;s 5G network for state-of-the-art wireless solutions that meet the evolving needs of government operations.&nbsp;
The contract aims to provide reliable connectivity for government activities, ranging from mission-critical communications to network solutions for military personnel and federal civilian agencies.
Read: <a target="_blank" href="https://www.benzinga.com/news/24/05/39072552/t-mobiles-uscellular-acquisition-is-key-to-5g-leadership-and-market-expansion-analyst-says" rel="noreferrer noopener">T-Mobile&#8217;s USCellular Acquisition Is Key to 5G Leadership and Market Expansion, Analyst Says</a>
David Bezzant, Vice President of Sales, T-Mobile for Government, said, &#8220;The Spiral 4 contract award is a testament to T-Mobile&#8217;s leading 5G network and to our focus on building solutions that meet the critical needs of our government customers.&#8221;
&#8220;With a cutting-edge product portfolio, a proven track record and a clear vision for the future, we&#8217;re ready to take government innovation to the next level. It&#8217;s an honor to serve those who serve this Nation.&#8221;
The multiple-award contract includes voice, data, fixed wireless solutions, Internet of Things, and mobility management solutions.
In addition, Uber Technologies, Inc.&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UBER#NYSE">UBER</a>) advertising division disclosed an exclusive partnership with T-Mobile Advertising Solutions and Octopus Interactive, which features the national network of interactive video <a target="_blank" href="https://www.benzinga.com/pressreleases/24/06/b39314593/uber-advertising-announces-exclusive-partnership-with-t-mobile-advertising-solutions" rel="noreferrer noopener">screens inside rideshare vehicles</a>.
Through this partnership, Uber will utilize a portion of T-Mobile&#8217;s rideshare inventory to expand its JourneyTV offering to over 50,000 vehicles across the U.S. this year.
Also Read: <a target="_blank" href="https://www.benzinga.com/trading-ideas/24/05/39089568/t-mobiles-game-changing-4-4-billion-deal-with-u-s-cellular-sets-new-record-highs" rel="noreferrer noopener">T-Mobile&#8217;s Game-Changing $4.4 Billion Deal With U.S. Cellular Sets New Record Highs</a>
Investors can gain exposure to the stock via Invesco BuyBack Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>) and The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>).
Price Action: TMUS shares are up 0.52% at $174.70 at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Mike Mozart via Flickr

Contracts

UBER

One-Two Punch for T-Mobile: Secures DoD Contract & Uber Deal

Comcast Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CMCSA#NASDAQ">CMCSA</a>) announced it will introduce a new streaming bundle called StreamSaver, which includes&nbsp;Apple Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) Apple TV+,&nbsp;Netflix Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>), and its own Peacock service.&nbsp;
CEO Brian Roberts revealed at an investor conference that this bundle aims to reduce subscriber churn and will be significantly discounted compared to similar market offerings.&nbsp;
The&nbsp;bundle will be available later this month to both video and broadband customers, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-05-14/comcast-to-offer-apple-tv-netflix-peacock-in-bundle-ceo-says?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.&nbsp;
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/04/38186223/at-t-comcast-verizon-challenge-subsidy-slash-threatens-internet-for-23m-households" rel="noreferrer noopener">AT&amp;T, Comcast, Verizon Challenge: Subsidy Slash Threatens Internet for 23M Households</a>
This strategy comes as Comcast, under the Xfinity brand, continues to lose pay-TV subscribers to streaming services despite having nearly 32 million customers, including 13.6 million video subscribers.
In April, Comcast reported&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/24/04/38430271/comcast-q1-earnings-revenue-beat-eps-beat-peacock-subscribers-up-55-yoy-and-more" rel="noreferrer noopener">first-quarter&nbsp;revenue</a>&nbsp;growth of 1.2% year-over-year to $30.06 billion, which beat the&nbsp;analyst consensus estimate&nbsp;of $29.81 billion. EPS of $1.04 beat the analyst consensus estimate of $0.99. Peacock paid subscribers increased 55% Y/Y to 34 million.
Analysts&nbsp;do not&nbsp;see Comcast&#8217;s market valuation adequately reflecting<a target="_blank" href="https://www.benzinga.com/news/24/04/38189737/comcasts-market-valuation-does-not-reflect-fair-value-for-its-significant-growth-portfolio-analyst" rel="noreferrer noopener">&nbsp;its growth potential</a>.
Comcast&nbsp;stock lost close to 1% in the last 12 months. Investors can gain exposure to the stock via&nbsp;Invesco BuyBack Achievers ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>) and&nbsp;Vanguard Communication Services ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOX#NYSE">VOX</a>).
Price Action:&nbsp;CMCSA shares traded higher by 0.30% at $39.82&nbsp;at the last check Tuesday.
Also Read: <a href="https://www.benzinga.com/general/entertainment/24/05/38659352/disney-comcast-seek-advisor-to-figure-out-how-much-hulu-is-really-worth-report" target="_blank" rel="noreferrer noopener">Disney, Comcast Seek Advisor To Figure Out How Much Hulu Is Really Worth: Report</a>
Proxima Studio via Shutterstock

NFLX

Netflix, Apple TV+, and Peacock In 1 - Comcast Introduces Discounted 'StreamSaver' Bundle

Benchmark&nbsp;analyst Matthew Harrigan reiterated&nbsp;Comcast Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CMCSA#NASDAQ">CMCSA</a>) with a Buy and a&nbsp;<a target="_blank" href="https://www.benzinga.com/quote/CMCSA/analyst-ratings" rel="noreferrer noopener">$55 price target</a>.
Dan Lovinger, NBC's president of ad sales and partnerships, announced that NBCU has already won $1.2 billion in commitments, on pace for a record Olympic tally including more than $350 million from new advertisers.&nbsp;
The analyst said the amount of commitment won is already just marginally behind the $1.25 billion in national advertising achieved for the Tokyo Games.&nbsp;&nbsp;
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/04/38186223/at-t-comcast-verizon-challenge-subsidy-slash-threatens-internet-for-23m-households" rel="noreferrer noopener">AT&amp;T, Comcast, Verizon Challenge: Subsidy Slash Threatens Internet for 23M Households</a>
The Olympics are especially integral to Peacock's ongoing momentum, with all events streaming with record concomitant digital advertising.&nbsp;&nbsp;
As per Harrigan, all inventory for the opening and closing ceremonies has now been sold out.&nbsp;
Top categories include nonalcoholic beverages, CPG, financial services, and retail, with entertainment also advancing.&nbsp;
He reflected on NBCU's partnership emphasis and said that nearly 95% of individual primetime marketing integrations are sold out.&nbsp;&nbsp;
The high affinity for major brands seeking association with the Olympics attests to Comcast's savvy off its own $7.65 billion Olympic commitment through 2032, with ad spending currently up 18% from the 2021 Tokyo Games in a less favorable Asian time zone with spectators returning in Paris, as per Harrigan.&nbsp;
This year's Olympic ratings will also likely benefit from breakout interest and viewing for women's sports following the NCAA Basketball Tournament.&nbsp;
The current market valuation does not reflect fair value for the company's significant growth portfolio and the essential relevance of linear TV integrated with streaming for delivering client brand equity, as per the analyst leading to the re-rating.&nbsp; &nbsp;
Harrigan noted that Peacock is creating a new inventory from on-demand and live-stream shows and new programmatic offerings.
The programmatic alternative is fostered through a partnership with The Trade Desk, enabling a private biddable marketplace. NBCU also has agreements to post clips on X and Snapchat.&nbsp;
The analyst writes that NBCUniversal is an overall leader in cross-platform advertising and AdTech, including its One Platform Total Audience approach, which has broad industry adoption, notably integrating linear viewing with digital consumption data.
One Platform includes significant NBCUniversal AI-enabled planning and activation technology. Near 60% of NBCUniversal's advertising clients use audience-based buying to maximize value, with a plus 25% growth in strategic audience-dedicated advertising, as per Harrigan.&nbsp;&nbsp;
Comcast gained 4% in the last 12 months. Investors can gain exposure to the stock via&nbsp;Invesco BuyBack Achievers ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PKW#NASDAQ">PKW</a>) and&nbsp;Invesco S&amp;P 500 Equal Weight Communication Services ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSPC#NYSE">RSPC</a>).
Price Action: CMCSA shares traded lower by 1.22% at $39.66 on the last check Wednesday.
Comcast Peacock Photo by rarrarorro on Shutterstock

Price Target

Reiteration

Analyst Ratings

RSPC

Comcast's Market Valuation Does Not Reflect Fair Value For It's Significant Growth Portfolio: Analyst

Stock buybacks in the United States appear to be breaking new ground as firms prepare for quarterly earnings season, even as some investors are concerned about the mounting threat of inflation, a potential recession, and stagnant share prices,&nbsp;<a class="editor-rtfLink" href="https://www.reuters.com/business/us-buybacks-seen-record-highs-ahead-earnings-reports-2022-04-06/" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">writes Reuters</a>.
According to financial data firm EPFR, Informa Financial Intelligence, new repurchase announcements by U.S. companies reached over $300 billion in the first quarter, with March showing a high year-over-year increase, suggesting buybacks have remained resilient in recent weeks.
Companies generally repurchase shares when they are optimistic about the future and believe their stock prices are low.
Investors are concerned about the impact of inflation and the prospect of a recession on company outlooks, which could dampen companies&#39; willingness to return money to shareholders in the form of large buybacks and dividends.
JPMorgan&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) Chief Executive Officer Jamie Dimon said on Monday his bank would reduce its stock buybacks over the next year to meet capital increases required by federal rules. read more
Starbucks Corp (NASDAQ:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/stock/sbux#NASDAQ" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">SBUX</a>)&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/22/04/26445499/starbucks-suspends-buyback-to-focus-on-investing-in-operations-schultz-takes-helm" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">paused billions of dollars of stock buybacks</a>&nbsp;to invest more in employees and stores at a time when the coffee seller faces growing unionization of its U.S. workforce.
According to S&amp;P Dow Jones Indices, S&amp;P 500 companies spent roughly $880 billion last year on stock buybacks, up from $520 billion in 2020. In a recent analysis, Goldman Sachs anticipated that S&amp;P 500 corporations would spend $1 trillion on stock buybacks by 2022, as per Reuters.
Reuters notes that according to Chua, an Informa Financial Intelligence analyst who tracks fresh repurchase announcements, new buybacks announced in March totaled ~$74 billion, up from $54 billion in March 2021.

Buybacks

DIVB

FDRR

SBUX

US Buybacks Reach New Highs Ahead Of Earnings: Reuters

U.S. companies are rushing to repurchase large volumes of shares to take advantage of recent stock market volatility and reassure investors as growth slows,&nbsp;<a class="editor-rtfLink" href="https://www.ft.com/content/e27975fc-a4f6-4e71-9ac8-af8a2418caca" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">reported Financial Times</a>.
The management uses the share buybacks to prop up demand for their stock and increase their profitability on an EPS basis by reducing the number of shares in circulation.
What happened:&nbsp;According to Goldman Sachs data, a record $319 billion of new share buybacks have been authorized so far this year, with rising numbers of companies using &quot;accelerated&quot; deals to buy large volumes as quickly as possible while their share prices are depressed.
There were $267 billion in share buybacks at the same point in 2021. &quot;The breadth of different industry groups buying stock is the highest we&#39;ve seen in a few years, and volumes have increased. That&#39;s much more due to the market backdrop as opposed to anything else&quot;, Michael Voris, Goldman Sachs&#39; head of structured equity, told FT.
&quot;The buyback business ironically tends to pick up in periods of volatility because there&#39;s a downdraft, and so people who are flush with cash look at their opportunities,&quot; stated Craig McCracken, co-head of equity capital markets at Wells Fargo.
Why It&#39;s Important:&nbsp;McCracken says, &quot;It&#39;s a sign of the underlying strength, that companies expect things will continue to be fairly positive, so they&#39;re using their cash to buy back shares instead of keeping it on the balance sheet.&quot;
According to an analysis compiled by Sentieo, companies have publicly announced more than $33 billion of accelerated share repurchases.
ASRs allow them to buy back large volumes in a matter of months. &quot;Accelerated repurchases send a strong signal to shareholders because the cash is committed to buy back the stock upfront,&quot; stated Goldman&#39;s Voris.
Photo via Stevepb via Pixabay

Economics

VanEck Vectors Morningstar Durable Dividend ETF

DURA

US Companies See Record Stock Buy Back In 2022 with $319B Authorized YTD: FT

Some long-term valuation models are projecting negative overall returns for the S&amp;P 500 over the next decade. Analysts are expecting rising interest rates to weigh on earnings growth, so companies may start turning to more aggressive share buybacks to boost EPS.
Deep Pockets: In the third quarter of 2021, Apple, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) led all S&amp;P 500 companies with $20.4 billion in buybacks. Alphabet, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>) was a distant second with $15 billion in buybacks, followed by Meta Platforms Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fb#NASDAQ">FB</a>) with $12.6 billion.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/09/22849073/this-model-suggests-negative-s-p-500-returns-over-the-next-decade">This Model Suggests Negative S&amp;P 500 Returns Over The Next Decade</a> 
Over the last decade, no company has come close to Apple in the <a href="https://www.spglobal.com/spdji/en/documents/index-news-and-announcements/20211221-sp-500-buyback-pr-q3-2021.pdf">buyback department</a>. Apple has bought back $487.6 billion in stock since 2012. Microsoft Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>) is a very distant second with $147.1 billion in buybacks, followed by JPMorgan Chase &amp; Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) with $146.2 billion.
Why Buybacks Matter: It should come as no surprise to investors that all three of the stocks that have been most aggressive in buying back shares over the last 10 years have outperformed the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>) total return by a wide margin in that period.
The SPY fund has a 10-year total return of 285.6% compared to 420.4% for JPMorgan, 962.7% for Apple and 1,030% for Microsoft.
Share buybacks don&#39;t boost a company&#39;s net income, but they do boost a company&#39;s earnings per share and lower its price-to-earnings multiple by reducing a company&#39;s total number of outstanding shares. Buybacks also generate internal demand for shares of stock and reduce a stock&#39;s total float, both of which can pressure share prices higher.
<img alt="share_buybacks.png" src="https://www.benzinga.com/files/images/2022/March/03/share_buybacks.png" style="height:410px; width:700px" />
Buybacks are often also an incorrect indication of a stock with a healthy business and extra cash flow to spend &mdash;&nbsp;the exact type of company that makes for a solid long-term investment.
S&amp;P 500 companies collectively repurchased a record $234.6 billion in stock in the third quarter of 2021, up 18% from 2020 levels.
Benzinga&#39;s Take: One way for investors to gain diversified exposure to buyback stocks is the Invesco Buyback Achievers ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>), which invests in stocks that have repurchased at least 5% of their outstanding shares over the past 12 months. Unfortunately, the PKW ETF has underperformed the SPY ETF over the past five years.

Long Ideas

Education

General

MSFT

Why Apple, Microsoft And Other Big Buyback Stocks Are Crushing The S&P 500's Returns

For the first time in 18 years, there was a new treatment for Alzheimer&rsquo;s Disease approved by the FDA.
Aducanumab from Biogen Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/biib#NASDAQ">BIIB</a>) was <a href="https://www.benzinga.com/general/biotech/21/06/21455132/biogen-gets-fda-nod-for-controversial-alzheimers-drug-first-treatment-approval-for-the-disease-in">approved </a>as a drug that can reduce the clinical decline of dementia. The FDA concluded using Aduhelm (the marketing name of Aducanumab) for Alzheimer&rsquo;s patients outweighs the risk of therapy.
The result saw Biogen shares halted for hours Monday before reopening for trade at $449, significantly above the 52-week high of $363.92. Investors sent shares of ETFs with Biogen up higher prior to shares of Biogen resuming trade.
Here is a look at five ETFs with large exposure to Biogen shares (data as of June 4 from <a href="https://etfdb.com/stock/BIIB/">ETFdb.com</a> and the company&rsquo;s websites).
Invesco Dynamic Biotechnology &amp; Genome ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pbe#NYSE">PBE</a>): +5.1%
The <a href="https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&amp;ticker=PBE">Invesco Dynamic Biotechnology &amp; Genome ETF</a> follows the Dynamic Biotech &amp; Genome index, investing at least 90% of assets in securities found in the index. The index includes 30 companies in the sector. The ETF rebalances quarterly in February, May, August and November.
Biogen is the second largest weighted stock in the PBE ETF at 5.23% of assets. Eight of the 31 holdings in the ETF have a weighting of 4.8% or more including Illumina Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ilmn#NASDAQ">ILMN</a>), Gilead Sciences (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/gild#NASDAQ">GILD</a>), Bio-Techne (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tech#NASDAQ">TECH</a>), Alexion Pharmaceuticals (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/alxn#NASDAQ">ALXN</a>), Amgen Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amgn#NASDAQ">AMGN</a>), Catalent Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ctlt#NYSE">CTLT</a>) and Qiagen (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/qgen#NYSE">QGEN</a>).
VanEck Vectors Biotech ETF: (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bbh#NASDAQ">BBH</a>): +4.6%
The VanEck Vectors Biotech ETF <a href="https://www.vaneck.com/us/en/investments/biotech-etf-bbh/">follows</a> the MVIS Us Listed Biotech 25 Index, which tracks the performance of companies involved in genetic analysis and diagnostics equipment.
Biogen is the eighth largest holding in the ETF at 4.8% of assets. The ETF&rsquo;s top holdings are Amgen, Moderna Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/mrna#NASDAQ">MRNA</a>) and BioNTech (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bntx#NASDAQ">BNTX</a>) at 9%, 7.2% and 5.8% of assets respectively.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/21/05/21178928/where-biogen-stands-with-analysts">Where Biogen Stands With Analysts</a>
Invesco BuyBack Achievers ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>): +2%
Along with several biotechnology sector ETFs, the<a href="https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&amp;ticker=PKW"> Invesco BuyBack Achievers ETF</a> was up on news from Biogen&rsquo;s approval. The ETF, which has 109 holdings, is based on the Nasdaq US BuyBack Achievers Index. The Index tracks companies that have a net reduction in shares outstanding of 5% or more over the last trailing twelve months. The ETF is rebalanced quarterly in January, April, July and October.
Biogen is the fifth largest holding in the ETF at 3.5% of assets and the top held health care stock in the fund. Top holdings in the ETF include Oracle Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/orcl#NYSE">ORCL</a>), Charter Communications (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/chtr#NASDAQ">CHTR</a>), eBay Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ebay#NASDAQ">EBAY</a>) and Allstate Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/all#NYSE">ALL</a>).
First Trust NYSE Arca Biotechnology Index Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fbt#NYSE">FBT</a>): +4.3%
The First Trust NYSE Arca Biotechnology Index Fund <a href="https://www.ftportfolios.com/Retail/etf/etfsummary.aspx?Ticker=FBT">tracks </a>an index of 30 holdings that cover several areas of the sector. The ETF has 30 holdings and due to the equal weighting the top 10 holdings represent 3.5% to 4.0% of assets.
Biogen is the eighth largest holdings at 3.5% of assets. The fund rebalances in January, April, July and October to get components to equal weighting.
iShares Nasdaq Biotechnology ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ibb#NASDAQ">IBB</a>): +4.4%
With $10.1 billion assets under management, the<a href="https://www.ishares.com/us/products/239699/ishares-nasdaq-biotechnology-etf"> iShares Nasdaq Biotechnology ETF</a> is one of the largest in the sector and could have a great impact from the Biogen news. The ETF has 277 holdings and tracks an index that covers companies listed on the Nasdaq in both the biotechnology and pharmaceutical fields.
Biogen represents 3.5% of assets and is the seventh largest holding. Top holdings in the ETF are Amgen, Gilead and Moderna at weightings of 8.7%, 7.1% and 6.9%, respectively.
Price Action: Shares of Biogen are up 42% to $405 at the time of writing.&nbsp;

Sector ETFs

Health Care

Movers

ALXN

AMGN

BIIB

BNTX

CHTR

CTLT

EBAY

First Trust NYSE Arca Biotechnology Index Fund

GILD

ILMN

MRNA

ORCL

PowerShares ETF Trust Dynamic Biotech & Genome Port

QGEN

TECH

5 Top ETFs With Exposure To Biogen

As has been widely reported, share buyback plans <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/02/13262926/amid-controversy-buyback-etf-proves-sturdy">have come under fire</a> by politicians from parties, but companies remain fond of the strategy as a way of returning capital to shareholders and the related exchange traded funds have been solid performers this year.
The Invesco BuyBack Achievers ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>) is up 14.64 percent year-to-date.
<h3>What To Know</h3>
The $1.43 billion PKW follows the NASDAQ US BuyBack Achievers Index, which requires its member firms to have reduced shares outstanding tallies by at least 5 percent over the trailing 12 months. That index is rebalanced four times a year in January, April, July and October.
PKW has been around for more than 12 years and since inception has <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKW">outperformed the S&amp;P 500</a> by 50 basis points. Even with its impressive track record, PKW is not without its flaws nor are buybacks always the perfect avenue for rewarding shareholders.
&ldquo;Firms that repurchase their shares tend to be highly profitable, but there is little to suggest that past repurchasing activity is predictive of future performance after controlling for profitability,&rdquo; said <a href="https://www.morningstar.com/articles/917326/despite-its-strengths-this-buyback-strategy-may-di.html">Morningstar in a recent note</a>. &ldquo;There are cheaper and more direct ways to get exposure to highly profitable stocks.&rdquo;
<h3>Why It&#39;s Important</h3>
While PKW&#39;s long-term performance is solid, individual companies are notoriously bad at timing share repurchases. Companies often hoard cash during recessions, when share prices are likely depressed, then engaged in buybacks in the middle and latter stages of bull markets, as has been seen in the recent U.S. bull market.
Additionally, share buyback plans are not always signs of financially sound companies as some companies will issue debt to fund repurchase programs.
&ldquo;Share repurchases do not paint a complete picture of a firm&rsquo;s financial health or its attractiveness as an investment,&rdquo; said Morningstar. &ldquo;Repurchases can be financed by debt, rather than by the strength of the underlying business. Such a strategy isn&rsquo;t always desirable. And repurchases can hurt returns if managers overpay for their shares.&rdquo;
PKW&#39;s methodology can lead to some sector-level concentration risk as not all sectors will have large numbers of constituents reducing shares outstanding by 5 percent or more over a given 12-month period. Currently, just two sectors &ndash; technology and consumer discretionary &ndash; combine for almost 45 percent of PKW&#39;s weight.
<h3>What&#39;s Next</h3>
&ldquo;PKW uses a short period to measure share repurchases, which may not be indicative of future repurchases,&rdquo; said Morningstar. &ldquo;And there is little indication that the screen it uses is predictive of future performance after controlling for profitability.&rdquo;
Morningstar has a Neutral rating on PKW.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13274757/fidelity-adds-3-etfs-to-factor-lineup">Fidelity Adds 3 New Factor ETFs</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13275007/msci-indexes-will-see-larger-a-shares-weights">Good News For An A-Shares ETF</a>

Broad U.S. Equity ETFs

This Buyback ETF Has Its Pros And Cons

It&rsquo;s rare to find bipartisan agreement in Washington, D.C., but GOP Sen. Marco Rubio has&nbsp;joined Democrats Bernie Sanders and Chuck Schumer in calling for legislation to discourage companies from investing so heavily in <a href="https://www.benzinga.com/news/buybacks">share buybacks</a>.
These efforts are intended to help boost job creation and wage growth, but some experts believe the&nbsp;political criticism of buybacks is misguided.
<h3>Rubio&rsquo;s Plan</h3>
On Tuesday, Rubio unveiled a new plan to raise taxes on capital gains, a proposal that he said&nbsp;will discourage companies from buying back shares of stock and instead encourage capital investment. Rubio is the chairman of the Senate&rsquo;s Small Business Committee, which rolled out the new plan on Tuesday.
&ldquo;When [a] corporation uses profits for stock buyback, it&#39;s deciding that returning capital to shareholders is better for business than investing in their products or workers,&rdquo; Rubio tweeted back in December.
<h3>Democrats&#39;&nbsp;Alternative</h3>
Rubio&rsquo;s anti-buyback plan comes less than two weeks after Sanders and Schumer wrote an op-ed for the New York Times calling for new rules related to corporate buybacks.
&ldquo;Our bill will prohibit a corporation from buying back its own stock unless it invests in workers and communities first, including things like paying all workers at least $15 an hour, providing seven days of paid sick leave and offering decent pensions and more reliable health benefits,&rdquo; Sanders and Schumer wrote.
From 2008 to 2017, when the economy was struggling to recover from the worst financial crisis in decades, U.S. companies spent a combined $4 trillion on buybacks, the senators said.&nbsp;
<h3>Missing The Point?</h3>
While buybacks have grabbed the attention of both Democrats and Republicans in Washington, Ritholtz Wealth Management portfolio manager Ben Carlson <a href="https://awealthofcommonsense.com/2018/05/lawmakers-dont-understand-how-buybacks-work/">recently wrote</a> that politicians don&rsquo;t seem to understand exactly how buybacks work.
&ldquo;You would never hear politicians complain about corporations paying out dividends but, in many ways, share buybacks are simply dividends in disguise,&rdquo; Carlson said.
Buybacks simply reduce the total shares of stock for a given company, thereby increasing the ownership percentage of the remaining shareholders.
&ldquo;The research shows that companies that buy back their shares actually outperform companies that have a higher share of investment for the future,&rdquo; Carlson said.
He said there are much better ways for Congress to attack the U.S. wealth gap than by aiming at buybacks.
&ldquo;If Congress really wants to help working Americans, lawmakers should encourage more people to invest in the stock market to take advantage of corporations returning money to shareholders, whether that&rsquo;s in the form of buybacks, dividends or any other number of capital-allocation decisions.&quot;&nbsp;
In the past 10 years, the INVESCO EXCHANG/BUYBACK ACHIEVERS E (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>) is up 293.8 percent, whereas the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>) is up just 226.6 percent in that same time.
Related Links:
<a href="https://www.benzinga.com/news/19/02/13092849/chuck-schumer-bernie-sanders-urge-limit-on-corporate-buybacks">Chuck Schumer, Bernie Sanders Urge Limit On Corporate Buybacks</a>
<a href="https://www.benzinga.com/government/19/01/13033430/wilbur-ross-on-government-workers-the-shutdown-and-china-trade-deal">Wilbur Ross On Government Workers, The Shutdown And China Trade Deal</a>
Photo by Michael Vadon/Wikimedia.&nbsp;

Analyst Color

Politics

Marco Rubio The Latest Politician To Target Stock Buybacks

Flush with cash due in part to the tax reform legislation passed late last year, S&amp;P 500 member firms are spending increasing amounts of capital on repurchasing their own shares.
In the second quarter, U.S. companies spent $190.6 billion buying back their own stock, up 0.80 percent from the first-quart record of $189.1 billion, <a href="www.spdji.com/indices/equity/sp-500">according to S&amp;P Dow Jones Indices</a>. Year-over-year, domestic buybacks surged a whopping 58.7 percent, notes S&amp;P Dow Jones.
<h3>What Happened</h3>
While buybacks are surging, some of the exchange traded funds focusing on companies that are major share repurchasers are lagging the broad market. Entering Monday&#39;s trading session, the Invesco BuyBack Achievers ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pkw#NASDAQ">PKW</a>) and the SPDR S&amp;P 500 Buyback ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spyb#NYSE">SPYB</a>) were up 5.9 percent and 9.5 percent, respectively, year-to-date. The S&amp;P 500 was higher by 10.8 percent.
&ldquo;The Q1 2018 buyback level was remarkable and the new Q2 2018 record continued to exceed expectations,&rdquo; said Howard Silverblatt, Senior Index Analyst at S&amp;P Dow Jones Indices.&nbsp; &ldquo;Given the record earnings, strong cash-flow, investor demand and corporate statements, the indications are that the high level will continue for the rest of the year.&rdquo;
<h3>Why It&#39;s Important</h3>
In the second quarter, Apple Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) was the share repurchaser, accounting for 11.5 percent of all S&amp;P 500 buybacks, according to S&amp;P Dow Jones. Historically, Apple holds the top six positions for share buybacks.
PKW&#39;s underlying index, the NASDAQ US BuyBack Achievers Index, requires companies to have reduced shares outstanding by at least 5 percent over the trailing 12 months to be included in the benchmark. Apple hasn&#39;t met that standard and isn&#39;t one of the ETF&#39;s holdings.
SPYB &ldquo;takes the top 100&nbsp;companies in the&nbsp; S&amp;P 500 with the highest buyback ratio in the last 12 months,&rdquo; <a href="https://us.spdrs.com/en/etf/spdr-sp-500-buyback-etf-SPYB">according to State Street</a>.
Apple is just 1.07 percent of SPYB&#39;s weight. That ETF&#39;s technology exposure is more than 600 basis points higher than PKW&#39;s, likely explaining why the SPDR fund is outperforming its Invesco rival this year.
<h3>What&#39;s Next</h3>
The buyback trend is likely to continue with the biggest share repurchasers likely to remain major drivers of that theme.
&ldquo;The buying continued to be top heavy, with the top 20 issues accounting for 49.7% of all S&amp;P 500 buybacks (the 5-year average is 41.7%), a level not seen since Q3 2012, when it was at 53.4%,&rdquo; said Silverblatt.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/09/12360612/a-fantastic-fundamental-small-cap-etf">A Super Small-Cap ETF</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/09/12380305/demand-has-swelled-why-bond-etfs-will-continue-growing">Why Bond ETFs Will Continue Growing</a>

SPYB

Buybacks On The Rise, But Buyback ETFs Are Lagging

Share buybacks among S&amp;P 500 member firms are declining. In the second quarter, S&amp;P 500 companies repurchased $120.1 billion of their own shares, an almost 10-percent decline from the first quarter. Second-quarter repurchase activity was almost 6 percent lower on a year-over-year basis and 25.6 percent below the activity seen in the first quarter of 2016.
&ldquo;For the 12-month period ending June 2017, S&amp;P 500 issues spent $500.8 billion on buybacks, down 14.5 percent from the $585.4 billion set during the 12-month period ending June 2016,&rdquo; according to <a href="https://www.prnewswire.com/news-releases/q2-2017-sp-500-buybacks-fall-98-from-q1-to-1201-billion-300520823.html">S&amp;P Dow Jones Indices.</a>
Declining buyback activity is not derailing the PowerShares BuyBack Achievers Portfolio (NASDAQ: <a class="ticker" href="/stock/pkw#NASDAQ">PKW</a>). PKW, the largest exchange traded fund&nbsp; dedicated to a buyback strategy, is up nearly 16 percent year-to-date after hitting a record high Friday.
<h3>
	Buyback Decline Could Continue</h3>
In advance of the GOP&#39;s tax reform package potentially being signed into law, some market observers argued the repatriation of trillions of dollars stored offshore by U.S. companies could result in increased dividends and renewed share buyback activity. After all, technology companies have massive stockpiles of cash offshore, and the sector has been a prolific buyer of its own shares in recent years. Technology is PKW&#39;s fourth-largest sector allocation at 13.1 percent.
Financial services, PKW&#39;s largest sector allocation at over 25 percent, are boosting share repurchases, but investors should not expect to see the same trend across all sectors. Four of PKW&#39;s top 10 holdings hail from the financial services sector.
Some market observers argue that tax reform will not spur increased buybacks because the S&amp;P 500 <a href="https://www.bloomberg.com/news/articles/2017-12-06/where-have-the-buybacks-gone-a-puzzle-with-clues-for-tax-reform">is richly valued </a>and, with the U.S. economy strong, companies are looking for other avenues to deploy cash.
<h3>
	Another Reason Buybacks Could Continue Faltering</h3>
With the U.S. bull market aging by the day and share prices at or near record levels for many S&amp;P 500 firms, repurchase programs may no longer be economical. By some estimates, a company must reduce outstanding shares by 3 or 4 percent for a buyback effort to be truly meaningful. To be included in PKW, companies need to reduce shares outstanding by at least 5 percent over the trailing 12 months.
Investors have pulled $217.2 million from PKW this year.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/12/10889293/why-tax-reform-benefits-tech-etfs">Why Tax Reform Could Help Tech ETFs</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/12/10889289/tis-the-season-for-this-retail-etf">Check Out This Retail ETF</a>

Buybacks Are Falling, But The Buyback ETF Is Rising

Share buybacks, along with dividends, are considered shareholder rewards, but there is additional insight to be gained from companies&#39; repurchase efforts. Several exchange-traded funds, in some form or fashion, focus on companies that are prodigious repurchasers of their own shares, including the PowerShares BuyBack Achievers Portfolio (NYSE: <a class="ticker" href="/stock/pkw#NYSE">PKW</a>).
The PowerShares BuyBack Achievers Portfolio is the largest of the buyback ETFs and is nearly 11 years old. PKW holds 223 stocks and tracks the NASDAQ US BuyBack Achievers Index. That index &ldquo;comprised of US securities issued by corporations that have effected a net reduction in shares outstanding of 5% or more in the trailing 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKW">according to PowerShares</a>.&nbsp;
PKW is trailing the S&amp;P 500 by 500 basis points, a trend that, if it holds, will mean the ETF will have lagged the S&amp;P 500 in three of the past four years. However, PKW has previously outperformed broader U.S. equity benchmarks with ease.
<h3>An Effective Valuation Measure</h3>
As the current bull market in U.S. equities ages by the day, the chorus grows louder that the U.S. stocks are increasingly pricey. However, buybacks can be another, if under-utilized, valuation metric.
&ldquo;Typically, management has a strong command of the prevailing competitive landscape, economic backdrop and industry trends affecting the firm,&rdquo; said Invesco PowerShares <a href="https://www.blog.invesco.us.com/stock-buybacks-share-repurchase">in a recent note</a>. &ldquo;Because management has an information advantage, the decision to repurchase shares often implies that management sees the return potential from buying stock as advantageous to other uses of cash. In effect, management is telling investors that the stock is cheap. By extension, a buyback investment strategy assumes that management is reducing share count for good reason, which can prompt value investors to take action.&rdquo;
There is something to be said for buybacks&#39; impact on equity price performance. Since the ETF came to market, PKW has topped the S&amp;P 500 by 170 basis points.
<h3>Explaining The Lag</h3>
As was noted earlier, PKW could lag the S&amp;P 500 this year, making it three of four years that has happened. There are reasons for that trend.
&ldquo;Buyback as an investment strategy lagged in 2014 and 2015,&rdquo; said PowerShares. &ldquo;I believe this was primarily because of market conditions. The NASDAQ US Buyback Achievers Index tilts toward the value and small-size factors because buyback is a form of value investing, while the companies meeting the buyback threshold of 5 percent tend to be less concentrated in size than a market-cap-based index like the S&amp;P 500 Index.&rdquo;
PKW allocates 24.5 percent of its weight to financial services stocks, its second-largest sector weight and a group widely considered a value play. There is something of a growth feel to the ETF as consumer discretionary and technology stocks combine for almost 37 percent of the ETF&#39;s weight.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/09/10060705/going-with-growth-etfs">Going With Growth ETFs</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10054873/a-quality-perk-with-this-etf">A Quality Advantage With This ETF</a>.

Gaining Insight With A Buyback ETF

Buyback activity has a subdued start to 2017. The S&amp;P 500 companies&#39; stock buyback fell 17.5% year over year and 1.6% sequentially to $133.1 billion in the first quarter of 2017.
Superb market rally on Trump-induced optimism is believed to have held companies back from indulging in share repurchase. It means that this monster rally is causing overvaluation in the market, which in turn is limiting corporates&#39; intention to buy back their own stocks at inflated prices.
After all, U.S. stocks witnessed the strongest first half of a year since 2013 on expectations that the Trump administration will deliver on pro-growth policies. While the Dow and S&amp;P 500 gave their best first-half performances in four years, the Nasdaq Composite Index had it <a href="https://www.zacks.com/stock/news/266498/best-first-half-for-wall-street-since-2013-top-5-gainers">since 2009</a>.
The S&amp;P Dow Jones Indices also noted that <a href="http://www.prnewswire.com/news-releases/sp-500-buybacks-fall-175-year-over-year-to-1331-billion-for-q1-2017-300477504.html">255</a> S&amp;P 500 issues lowered their share count for Q1 of 2017, from 281 for Q4 2016 and 324 for Q1 2016. Around 71 companies reduced their share count by 4% year over year in Q1 of 2017 against 93 in Q4 of 2016 and 139 in Q1 of 2016.
Can Buyback Surge Ahead?
As per the S&amp;P Dow Jones Indices analyst, the trend looks even worse for Q2 of 2017. In May, CNBC pointed out that investors have lately chosen dividends over buybacks as a way to return shareholders&#39; wealth. This is a completely different scenario that we noticed in the 8-year-old bull market. In previous years, buybacks overpowered companies and investors&#39; sentiments than dividends.
The Fed is also on its way to tighten monetary policies. If the economy gains further momentum, and the Fed acts faster, interest rates are expected to rise faster. So, accessing the debt market to finance buybacks would not be an easy task going forward.
Then again, President Trump&#39;s administration announced a tax plan in late April revolving mainly around cutting corporate taxes and adjusting personal tax rates.&nbsp;Though political uncertainty is rife related to the implementation of such measures, parts of Trump&#39;s policies like the travel ban have lately been out into effect. This is likely to boost investors&#39; confidence in Trump&#39;s tax cut proposals.
At present, overseas cash can&#39;t be brought back to the country without getting hit by a 35% corporate tax rate. Now, overall tax cuts and a <a href="https://www.zacks.com/stock/news/258261/finance.yahoo.com/news/trump-unveil-plan-biggest-tax-134109664.html">one-time repatriation tax</a> could boost share repurchases (read: <a href="https://www.zacks.com/stock/news/240848/buyback-etfs-trump-beneficiary-or-overhyped-bets">Buyback ETFs: Trump Beneficiary or Overhyped Bets?</a>).
U.S. companies are sitting on huge cash balances leaving companies at ease with their ability to buy back their shares. <a href="https://www.ft.com/content/99000fda-5697-11e7-80b6-9bfa4c1f83d2?mhq5j=e3">Citi strategists</a> believe that &quot;the US has become a capital-lite and distribution-heavy stock market&quot; and estimates buybacks and dividends to be $895.6 billion this year, slightly lower than $957.9 billion projected for investments.
Now, it remains to be seen whether Trump&#39;s proposed tax plan (if it materializes) benefits ETF activity or if a Trump rally hurts the same.
ETFs in Focus
Whatever the case, investors can keep a tab on the following buyback ETFs.
PowerShares Buyback Achievers Portfolio PKW looks to track companies that have implemented a net reduction of 5% or more in shares outstanding in the last 12 months (see&nbsp;<a href="https://www.zacks.com/funds/etfs/etf-categories/Total-Market-%28U.S.%29-ETFs-4">Total Market (U.S.) ETFs here</a>).&nbsp;
Another buyback ETF&nbsp;SPDR S&amp;P 500 Buyback ETF&nbsp;SPYB measures the performance of the top 100 stocks with the highest buyback ratio in the S&amp;P 500 in the last 12 months.
AdvisorShares Wilshire Buyback ETF TTFS looks to generate long-term capital appreciation.
<img alt="" src="https://staticx-tuner.zacks.com/images/zadmin_tuner_image/buyback etfs chart.jpg" style="width: 620px; height: 252px;" />
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Specialty ETFs

Psychology

Warning Signs For Buyback ETFs?

The PowerShares BuyBack Achievers Fund (ETF) (NYSE: <a class="ticker" href="/stock/pkw#NYSE">PKW</a>) is up 5.6 percent year to date, a performance that trails the S&amp;P 500 by more than 300 basis points. That is a result of the performances being notched by PKW&#39;s underlying holdings, but data indicate S&amp;P 500 spent less on share repurchases in the first quarter than in the year earlier period.
<h3>What Makes PKW Unique</h3>
PKW does not track the S&amp;P 500 or any S&amp;P index for that matter. Rather, the buyback ETF follows the NASDAQ US BuyBack Achievers Index, which &ldquo;is comprised of US securities issued by corporations that have effected a net reduction in shares outstanding of 5% or more in the trailing 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKW">according to PowerShares</a>.
The ETF currently holds 229 stocks with an average market capitalization of over $51.2 billion.
First-quarter spending on share buybacks by S&amp;P 500 member firms &ldquo;totaled $133.1 billion for Q1 2017. This is a 1.6 percent decrease from the $135.3 billion reported for Q4 2016 and a 17.5 percent decrease from the $161.4 billion reported for Q1 2016, when companies actively supported declining share prices, said <a href="http://us.spindices.com/">S&amp;P Dow Jones Indices</a> in a note out Wednesday.
<h3>Performance</h3>
For the year ended March 31, 2017, the decline in share buybacks by S&amp;P 500 components was also dramatic.
&ldquo;For the 12-month period ending March 2017, S&amp;P 500 issues spent $508.1 billion on buybacks, down 13.8 percent from $589.4 billion for the prior 12-month period; the 12-month period ending March 2016 remains the all-time record,&rdquo; said S&amp;P.
<h3>Holdings, Weight</h3>
PKW allocates over half its combined weight to industrial and financial services stocks. At the sector level, financials saw the biggest increase in first-quarter buybacks while accounting for just over 22 percent of all repurchases. Six of the ETF&#39;s top 10 holdings and each of the top five are members of the Dow Jones Industrial Average. However, PKW still lacks exposure to Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) while that company remains a prolific buyer of its own shares.
In the first quarter, Apple spent $7.2 billion buying back its own stock, down from the fourth-quarter total, but up from the $6.7 billion the company spent in the first quarter of 2016, according to S&amp;P.
The healthcare and technology sectors combined for almost 41 percent of first-quarter repurchases, notes S&amp;P. Those sectors combine for 21 percent of PKW&#39;s weight and are the fourth- and fifth-largest sector allocations in the ETF.
For the six-year period ending 2016, PKW outpaced the S&amp;P 500 three times.
Related Links:
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Buyback ETF Deals With Declining Repurchases

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Invesco BuyBack Achievers ETF

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