Recent research indicates little opportunity to profit from repurchase situations.

Question

Quizplus · Accepted Answer

The repurchase tends to increase the demand for the shares, while decreasing the effective supply. In a recent latest study, the researchers did find large positive returns over a long period of time following a stock repurchase announcement, even though the initial reaction was muted. Over a four-year time period following the month of announcement, the stocks in the study had an average abnormal return of 12.1% (return over and above comparable firms with equal risk).

Recent Research Indicates Little Opportunity to Profit from Repurchase Situations