By: Christian Hudspeth of Street Authority
Corporate America's "wealth giveaway" continues.
Ever since America's largest corporations hunkered down and began hoarding unprecedented amounts of cash to protect themselves in the aftermath of the 2008 financial crisis, investors have been hounding companies to put that money to work.
Fortunately for investors, companies have responded. But not in the way you might expect.
You see, rather than putting their cash to work through expanding product lines, opening more stores and investing for growth, many large companies have been rewarding shareholders through record amounts of dividends and share repurchases.
For the most part, this is good news for investors. But there's a hidden element to share about buybacks that you need to be aware of... because behind the scenes some companies are actually using this effective tool to erode shareholder wealth.
Let me explain... Continue reading "The Dirty-Little Secret Behind Corporate America's 'Buyback Frenzy'"