In today’s Daily Alert, The Buyback Letter Editor David Fried recommends a fast-growing company with a generous buyback policy.
“Arrow Electronics, Inc. (ARW $41 NYSE) is a global provider of products and services to industrial and commercial users of electronic components and enterprise computing solutions. Arrow is a supply channel partner for more than 100,000 original equipment manufacturers, contract manufacturers and commercial customers through a network of more than 470 locations in 55 countries.
“Arrow has a market cap of $4.3 billion and is part of the services sector. Shares are up some 4% so far this year, and analysts praise the company for its increase in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures.
“For the quarter ended December 31 (Q4), Arrow Electronics beat expectations on revenues and on earnings per share. Revenue was $5.40 billion ($5.26 billion predicted), and EPS came in at $1.22 ($1.08 predicted).
“A component of the Russell 3000, Arrow was identified as having a larger market cap than the smaller end of the S&P 500 (Leggett & Platt). In February, the board approved another $200 million for buybacks. Arrow has spent some $800 million on buybacks since 2006. In the last 12 months, management has reduced shares outstanding by 5.3%. Buy ARW.”
- David R. Fried, The Buyback Letter, March 21, 2013