Companies in the S&P 500 were busily buying back their shares during the third quarter, with the total amount spent being the fourth highest since at least 2005. Data compiled by FactSet indicates companies in the index spent an aggregate amount of $143.4 billion.
Share buybacks in S&P 500 rise 16%
The firm states that the amount is an increase of 16% year over year and 6.6% sequentially. FactSet only started tracking share buyback activity in 2005, so this is the fourth highest level since the firm began keeping records on this data point. The top three quarters in share buybacks were the third quarter of 2007 with $178.7 billion, the second quarter of 2007 with $161.7 billion, and the first quarter of this year with $160.4 billion.
Dan Loeb’s Third Point Re To Merge After Years Of Losses
Last week, Third Point Re insurance, which is backed by US hedge-fund manager Daniel Loeb, said it would merge with Sirius International Insurance Group in a cash-and-stock deal worth around $788 million. The deal comes at a pivotal time for both companies. Third Point Re To Merge After Years Of Losses Early last year, reports Read More
On a trailing 12-month basis, FactSet reports that total buyback spending among companies in the S&P 500 Index was $567.2 billion. That’s a 26.9% increase year over year. On this basis, the third quarter was again the fourth highest. The first three were the fourth quarter of 2007 with $618 billion, the third quarter of 2007 with $603.3 billion, and the first quarter of 2008 with $593.6 billion.
Apple drives buyback activity higher
It appears as if activist investor Carl Icahn’s push for increased share buybacks at Apple Inc. (NASDAQ:AAPL) has made a difference, as the company drove the increase in share buybacks during the third quarter. The company was the biggest contributor to the year over year increase, spending $17 billion on share buybacks during the quarter. That was the most spent of any company in the S&P 500 and represented a 240% increase year over year for the technology giant.
FactSet points out that of the $17 billion, $9 billion of it was part of Apple’s new accelerated share buyback arrangement, which it began in August. Apple’s third quarter buybacks represented the second-highest dollar amount spent on share repurchases during a single quarter by one company since 2005 when FactSet started tracking this data.
Apple spends the most of any S&P 500 company
Apple itself still holds the stop spot for most money spent on share buybacks during a quarter, as it spent $18.6 billion on repurchases during the first quarter of this year. Pressure from Icahn may have something to do with the increases, as he had been pressuring Apple to increase its share repurchases before both the first and third quarters of this year.
On a trailing 12-month basis, Apple spent $55.9 billion, which is almost triple the second highest amount, which was International Business Machines Corp. (NYSE:IBM)’s $19.3 billion during the same period.
FactSet reports that 75% of the S&P 500 Index bought back shares during the third quarter, although that’s a 2% decline in the number of participating companies year over year. Sequentially, one fewer company bought back shares in the third quarter compared to the second quarter.