Research paper from author and strategist Michael Mauboussin.
Summary: “The issue of disbursing cash to shareholders is a crucial and timely issue in determining shareholder value.”
In the 2014 letter to Walgreens’ board, Credit Suisse emphasized the importance of aligning capital allocation decisions, such as share repurchases, with the company’s long-term strategic goals. They cautioned against using buybacks solely to boost short-term earnings per share, as this approach might not reflect the company’s true financial health. Instead, Credit Suisse recommended that buybacks be considered within the broader context of the company’s overall capital allocation strategy, ensuring that such decisions support sustainable growth and value creation for shareholders.
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