Monday, July 9, 2007

Now Conoco Teaches Home Depot A Lesson

Just in case management at Home Depot (HD) did not learn anything about how to announce a buyback, from Best Buy's (BBY) announced share repurchase, ConocoPhillips (COP) today tried to drive the point home.

ConocoPhillips (COP)approved the repurchase of up to $15 billion of the company's shares through the end of 2008. This amount includes $2 billion remaining under the $4 billion program previously announced on February 9, 2007. Based upon its current commodity price and operational outlook, ConocoPhillips expects third quarter 2007 purchases of $2 billion to $3 billion, and fourth quarter 2007 purchases of a similar range. Now this is a buyback announcement.

With a market cap of $133 billion, Conoco will take 11% of the company off the market by the end of 2008. They will do this by taking 3% to 4.5% this year and the rest in 2008. Unlike Home Depots "we are going to buy back a lot sometime in the future" announcement, this one gives us the details we need to determine if it is a good one or not. Clearly this is. This is the reason shares have jumped almost 4% since the announcement while the Depot's were unmoved.


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