All Cap Share Buyback Model
INVESTMENT OBJECTIVE
The iQ All Cap Share Buyback Model seeks capital growth by investing primarily in common stocks of large, mid, and small corporations that have engaged in a share repurchase program in the previous twelve months.
PROCESS
The iQ All Cap Share Buyback Model employs the following unemotional rules-based process:
Start with the largest 1,500 domestically-traded companies.
Select the 300 companies with the highest 12-month share buyback ratio.
Screen by 5-year risk-adjusted seasonal relative strength and select the top 50
Screen by earnings momentum and share buyback and select the top ten.
This model reconstitutes every February, May, August and November
Why invest in share buyback stocks of all market cap sizes?
Investing in share buyback stocks of all sizes can be beneficial for several reasons.
Firstly, share buybacks are a signal of a company's confidence in its own future prospects. When a company buys back its own shares, it is effectively reducing the number of shares outstanding, which increases the ownership percentage of each remaining shareholder. This can boost the share price, as investors interpret the buyback as a sign that the company believes its shares are undervalued.
Secondly, share buybacks can increase earnings per share (EPS) by reducing the number of shares outstanding. This can make a company more attractive to investors, particularly those who place a high value on earnings growth.
Finally, share buybacks can be an efficient way for companies to return excess cash to shareholders, particularly if they do not have any immediate investment opportunities that can generate a higher return than the cost of capital. This can be particularly beneficial in periods of low interest rates, as investors may be willing to pay a premium for stocks that offer a higher yield than bonds.
Overall, investing in share buyback stocks of all sizes can be a way for investors to benefit from a company's confidence in its own future prospects, and potentially capture higher EPS growth and yield.
Please be aware that investing in all cap share buyback stocks carries inherent risks. The information provided here is for informational purposes only and should not be construed as a recommendation or guarantee of investment success. All cap share buyback stocks may experience market fluctuations, and past performance is not indicative of future results. Investors should carefully consider their financial objectives, risk tolerance, and seek advice from a qualified financial professional before investing in such stocks. Please note that all investments involve potential loss of principal, and thorough research and due diligence are crucial before making any investment decisions.