I'm the manager of gurufocus. Please create a 10-Year Share Buyback Ratio explanation video for gurufocus users. Please make it easy to understand and fun to watch.
Here is a reference for NVDA (NVIDIA) 10-Year Share Buyback Ratio https://www.gurufocus.com/term/total-buyback-10y/NVDA
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Hey GuruFocus users! Ever wonder what companies do with all that cash they make? Besides investing in growth and paying dividends, sometimes they do something called a share buyback! Think of it like this: the company is buying its own stock from the open market. Why? Well, it can reduce the number of shares out there, potentially boost earnings per share, and it's a way to return value to shareholders. Plus, it signals that management thinks their stock is a good investment!
Now, at GuruFocus, we have a super cool metric that looks at this over the long term: The 10-Year Share Buyback Ratio! This ratio tells you, over the past decade, what percentage of the company's original shares outstanding have been bought back. The calculation is pretty straightforward: It's the total number of shares bought back over the last 10 years, divided by the number of shares outstanding 10 years ago. So, if a company had 100 million shares 10 years ago and bought back 25 million shares over that period, their 10-Year Share Buyback Ratio would be 25.3 percent!
Why is this useful for you? It gives you a long-term perspective on how much capital the company has returned to shareholders through buybacks. A high ratio can indicate a management team that's been actively reducing share count, potentially boosting per-share metrics. It's a piece of the puzzle when evaluating how a company manages its capital. But remember, like any single metric, it's just one piece of the puzzle! You want to look at how they funded those buybacks and what else they were doing with their cash.
You can find the 10-Year Share Buyback Ratio right here on GuruFocus, often under the Valuation or Financials sections for a company. Check it out for companies you're researching! For example, NVIDIA has shown a strong buyback history over the years. So next time you're analyzing a stock on GuruFocus, don't forget to check out the 10-Year Share Buyback Ratio. It's a great way to see how much value a company has been returning to shareholders over the long haul!
Thanks for watching! Remember, the 10-Year Share Buyback Ratio is a powerful tool that shows long-term value return to shareholders, but it's just one piece of the investment puzzle. Consider how companies funded those buybacks and what other opportunities they might have had for their cash. Use this metric alongside others for a complete analysis. Happy investing, and see you next time on GuruFocus!