December Buybacks Near $30 Billion Already, More For 2011 (T, AET, AZO, ADSK, CB, CAG, CCK, ECA, ENZN, HD, INTC, MAN, MKL, SWY, SYK, TEVA, TIBX, PKW, CSCO, GE, BAC, WFC, JPM)

There is a long-standing debate over the effect and impact of share buyback plans. What is not up for debate is that many companies have given big updates or announced new buyback plans in the month of December.  In less than two weeks we had some $15 billion in updated buybacks, but through December 22 we actually have a much larger number: almost $29 billion tracked in just these buybacks!  The number is likely over $30 billion already.

We have updates for AT&T Inc. (NYSE: T), Aetna Inc. (NYSE: AET), AutoZone Inc. (NYSE: AZO), Autodesk, Inc. (NASDAQ: ADSK), Baxter International Inc. (NYSE: BAX), Chubb Corporation (NYSE: CB), ConAgra Foods, Inc. (NYSE: CAG), Encana Corp. (NYSE: ECA), Enzon Pharmaceuticals Inc. (NASDAQ: ENZN), Franklin Resources Inc. (NYSE: BEN), The Home Depot, Inc. (NYSE: HD), Intel Corporation (NASDAQ: INTC), Markel Corp. (NYSE: MKL), Safeway Inc. (NYSE: SWY), Stryker Corp. (NYSE: SYK) and Teva Pharmaceutical Industries Limited (NASDAQ: TEVA), TIBCO Software Inc. (NASDAQ: TIBX), and Trinity Industries Inc. (NYSE: TRN).

The buyback ETF is PowerShares Buyback Achiever Portfolio (NYSE: PKW), and we have highlighted that herein as well.  We also took a look at the continuing situations in General Electric Co. (NYSE: GE) and Cisco Systems Inc. (NASDAQ: CSCO).  For buybacks in 2011, there is already evidence that Bank of America Corp. (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), and J.P. Morgan Chase & Co. (NYSE: JPM) could begin significant buyback programs.

There is a long-standing debate over whether or not stock buybacks are an effective return of cash to shareholders.  It’s a simple theory by lowering the number of outstanding shares to boosts the price of the stock.  That does not always work, but many companies are willing to spend billions upon billions for this effort.  Investors need to know that many new buyback plans are coming.  We wanted to track December’s big buybacks now that we are likely over some $30 billion if you include the many smaller buybacks we either missed or eliminated due to size and the length of this already.

AT&T Inc. (NYSE: T) announced last week that it plans to repurchase as many as 300 million shares.  This would represent some $8.7 billion worth of stock at the time, or about 5% of its shares.  The current market cap is close to $171 billion.

Aetna Inc. (NYSE: AET) approved the repurchase of $750 million of stock, which is actually in addition to roughly $257 million left in prior approvals.  We’ll call it $1 billion for short, and that compares to a market cap of just over $12 billion at the time.

AutoZone Inc. (NYSE: AZO) added some $500 million into its buyback plan.  The company noted, “Since the inception of the repurchase program in 1998, and including the above amount, AutoZone’s Board of Directors has authorized $9.9 billion.”  Its market cap is currently just shy of $12 billion.

Autodesk, Inc. (NASDAQ: ADSK) added up to 20 million shares on its existing buyback plan in mid-December.  With shares having been just above $40 this week that comes to roughly $800 million against a market cap of just under $9 billion.

Baxter International Inc. (NYSE: BAX) in the middle of the month approved a share repurchase authorization of up to $2.5 billion in common stock; it had approximately $600 million remaining under its July-2009 $2.0 billion share repurchase program.  Baxter’s market cap is just above $29 billion.

Chubb Corporation (NYSE: CB) has now authorized an additional 30 million shares for buybacks, and that appears to be the second buyback expansion in the year.  That is nearly $1.8 billion at current share prices against a market cap of nearly $18 billion at the time.

Computer Sciences Corporation (NYSE: CSC) announced in mid-month a buyback plan of up to $1 billion as it noted, “CSC believes that its shares represent an attractive investment opportunity.”  This was recently one of our ‘Deep Value Tech Stocks’ and that $1 billion compares to a market cap today of close to $7.5 billion.

ConAgra Foods, Inc. (NYSE: CAG) lowered its guidance for  growth in 2011, but it did expand its buyback ambitions by the $554 million received as an early repayment of notes it was owed.  ConAgra’s  plan is now close to $750 million against a market cap of $9.7 billion at the time.

Crown Holdings Inc. (NYSE: CCK), in packaging products for consumer goods, said earlier this month that it had accelerated a share repurchase plan through Citi.  It then authorized the repurchase of up to $600 million worth of common stock through the end of 2012.  The current market cap is almost $5.4 billion.

Encana Corp. (NYSE: ECA) announced that it received renewed approval for a Normal Course Issuer Bid from the Toronto Stock Exchange and it may repurchase and cancel up to 36.8 million shares.  That is roughly 5% of its outstanding and issued shares.  Its market cap was close to $21 billion at the time.

Enzon Pharmaceuticals Inc. (NASDAQ: ENZN) was not all entirely great news as it was cutting its workforce by more than 25%, but it did announce this week that it was allocating up to $200 million in share repurchases.  That is pretty substantial considering a $750 million market cap.

Franklin Resources Inc. (NYSE: BEN) last week added to its prior plan and announced that it would buy back up to 10 million shares.  With shares over $100 a piece, that is over $1 billion if fully allocated and that is against a market cap of roughly $25 billion.

The Home Depot, Inc. (NYSE: HD) said earlier that the home improvement supply giant is targeting some $2.5 billion in share buybacks ahead in 2011 versus a market cap of roughly $56 billion.

Intel Corporation (NASDAQ: INTC) CEO Paul Otellini announced earlier in the month that it resumed repurchasing common stock after having previously suspended buybacks during the Great Recession.  Intel had roughly $5.7 billion remaining under an existing $25 billion buyback plan.  Intel’s market cap was more than $120 billion at the time.

Manpower Inc. (NYSE: MAN) announced in mid-December a 3 million share buyback plan which adds to a prior plan.  That might not sound like much, but that is fairly close to $200 million and its market cap is $5.3 billion.

Markel Corporation (NYSE: MKL) authorized some $200 million to repurchase shares.  It had repurchased roughly $179 million under a plan begun about 5 years ago.  Markel’s market cap was close to $3.5 billion at the time of its announcement.

Safeway Inc. (NYSE: SWY) added $1 billion to its existing buyback plan, which already had some $800 million available to repurchase shares.  Safeway’s market cap at the time was roughly $8 billion, which would make this one of the more significant percentage buybacks compared to the float if expedited.

Stryker Corporation (NYSE: SYK) approved the repurchase of $500 million an additional stock buybacks.  Under its existing $750 million repurchase plan, Stryker has repurchased roughly $410 million against what was roughly a $21 billion market cap.

Teva Pharmaceutical Industries Limited (NASDAQ: TEVA), one of our ten picks to own for the next decade, announced on December 1 that it would spend up to $1 billion to repurchase shares against a market cap of roughly $47 billion.

TIBCO Software Inc. (NASDAQ: TIBX) authorized a new share repurchase program along with its earnings report to repurchase up to $300 million in stock.  This new program replaces a prior $300 million plan which had approximately $159 million remaining.  TIBCO’s market cap is roughly $3.5 billion.

Trinity Industries Inc. (NYSE: TRN) replaced its prior plan earlier in December with a buyback plan of up to $200 million.  Not bad considering a $2 billion market cap for a products and services company in the industrial, energy, transportation, and construction segments.

If you want to know about an ETF that is a pure buyback play, there is the The PowerShares Buyback Achiever Portfolio (NYSE: PKW).  There are only 1.5 million shares outstanding according to Invesco’s website.  Its holdings must have repurchased at least 5% or more of their outstanding shares for the trailing 12 months.  Its holdings include some names mentioned here today: AutoZone, Aetna, and TIBCO Software.

What about existing plans as a comparison or those which are entertaining buybacks for 2011?

Let’s not forget General Electric Co. (NYSE: GE).  Jeff Immelt has discussed the buybacks being restarted after a long pause and that is after two dividend hikes as the company is back on the long road of recovery talking up its growth prospects.  We’ll wait for its Q4 earnings in January before we issue a tally on the buyback progress and more importantly what buybacks are coming while it also looks for acquisition possibilities. GE is one of the ten stocks to own for the next decade.

Cisco Systems Inc. (NASDAQ: CSCO) has hung low despite that in November it added $10 billion to its buyback plan.  John Chambers and friends have authorized some $62 billion in total for share repurchases over the years.  Its buyback effort has not driven shares higher. Its market cap is currently under $110 billion.  While the current situation is not favorable, we have Cisco as one of our top ten stocks to own for the next decade.

Bank of America Corp. (NYSE: BAC) and Wells Fargo & Co. (NYSE: WFC) both  may restart buyback plans in 2011 as soon as they are cleared to resume returning capital to shareholders.   Wells Fargo’s CEO John Stumpf told investors that wants to return of capital to holders with higher dividends and share buybacks.  Of these two banking giants, Wells Fargo has far less government and mortgage pressure than Bank of America, or that is at least what is believed today.

What about some $15 or $16 billion more in 2011?  Deutsche Bank earlier gave a forecast that a 10% share buyback announcement could come from J.P. Morgan Chase & Co. (NYSE: JPM).  A 10% buyback would be a monster of a plan considering that its market cap is $165 billion.

As you can see, billions upon billions of dollars could be used for buybacks.  Billions have already been committed so far in December alone and this is far from just a December story.  This is likely a story for 2011 and beyond.  Some companies are opportunistic on buybacks as others announce buybacks and rarely announce buybacks.

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JON C. OGG