This is a good article from Barron's this week.
While I do agree that buybacks can be good, I don't think corporate finance managers are buying only when the company's "intrinsic value" is more than the market price. That would require corporate finance managers to be good stock market investors. I just don't see it.
Buybacks are done more mechanically to use the dollars they have been budgeted. The corporate finance manager's responsibility is to complete the purchase within a certain time frame - not toward value. They don't focus on purchasing investments at the "right price". That would require a longer time frame at times and would also require them to NOT COMPLETE their task when the price was too high. Not completing the task would be more risky for their career than not getting a good value. Odd, but that is a clear difference between the investor and corporate finance person.
Given the surge in buybacks in 2018 (according to the graphic in the article), it seems as corporate investors are just as subject to buying at the wrong times as many other investors! 2009 and 2010 would have been much better times when equity prices were generally down.
Buffett likes what Apple is doing because he sees "intrinsic value" being more than the company’s stock price. He often has said that he doesn't like buybacks, but that is solely because of the way corporations do them.
Like all good tools, there are the right places to use them and the wrong place to use them. A parallel to this would be spreadsheets. Spreadsheets are really good for a lot of things, but not everything. When they start to be used for everything that is where the problems begin!
