Favorite Buyback Bets

02/25/2016 7:00 am EST


David Fried

Editor, The Buyback Letter

David Fried specializes in selecting stocks from among those which have announced buybacks or are undergoing repurchase programs. Here’s two new additions to the model portfolio at The Buyback Letter.

Celestica (CLS)

Celestica is one of the main companies in the electronic manufacturing services industry; its products are found in smartphones, wireless networking, printers, medical products, and many others.

Celestica management has begun to turn away from the consumer market and focus on becoming more of a target niche provider, including a focus on the growing aerospace and defense markets.

For the second year in a row, the firm was named to the 2016 Global 100 Most Sustainable Corporations in the World Index. The firm also received the 2015 EMS Partner of the Year award from Cisco (CSCO).

For the year, the company reported profit of $66.9 million (42 cents per share), with revenue of $5.64 billion. Management has reduced shares outstanding by 21.11% in the last 12 months.

Regions Financial (RF)

Regions is a leading regional bank, with about $126 billion in assets. It serves customers in 16 states across the South, Midwest, and Texas, and operates some 1,630 banking offices and 2,000 ATMs.

It has won awards of excellence for providing distinguished service to small business and middle market clients and was ranked among the top 10% of companies for customer service in 2015.

Analysts taking the long view have noted that while Regions faced major problems during the 2008-09 meltdown, management has done a good job of returning to banking basics and strengthening the loan portfolio while also expanding the bank’s customer and asset base.

Strong cost-cutting initiatives and shareholder-friendly dividend and repurchase activities have rewarded shareholders. The firm has reduced shares outstanding by 5.77% in the past 12 months.

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