If the company has a lot of cash reserve yet not find an investment opportunity, it may declare a special dividend. Or indirectly, it buys its share from open market. It means its shares are the best investment at that time. Through buyback, the floating number of shares decreases. So the earning per share would go up, making its share more attractive. For example, local banks such as OCBC and UOB are both in such share buyback exercise.
Sometimes a director might buy his company's share in open market. I.e. a director of Lasseters kept buying its shares during last several months. In this case, he signals to public that he is confident about the future of the company.
Last situation is actually not buy back. However, I like it most. It is an investment fund that keeps buying a company. If you check last year announcements about Eu Yan Sang, you would find that before its share price jumped, Aberdeen Asset Management Asia Ltd made lots of purchases. If someone notices such situation, do drop me an email.
Disclaim: This website is not an inducement of investment.
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