Sat 30 Sep 2006
This from a business article about Accenture (ACN):
Buyback: Accenture management is clearly troubled by the fall in valuation. It has announced a buyback price per share that is not greater than $24.75 nor less than $22.50. The Board of Directors of Accenture authorized the use of $650 million of existing cash from operations to fund the offer, as well the use of up to an additional $123 million should Accenture SCA choose to increase the size of the offer in response to shareholder demand. This aggregates to about 5% of current market cap.
So, if you want to make some low-risk money, look to buy shares of ACN in the $23-$25 range. This will take patience as ACN is currently trading over $30 a share right now.
Of course, there are all sorts of catches, like how much they have left in their share repurchase budget, how often they renew the repurchase offer, etc.
Accenture has been suffering slightly (here’s a 5 year chart) as a publicly traded stock due to the volatility in its earnings. They’re very vulnerable to economic downturns, and they can’t scale up as quickly as other companies (to scale up, Accenture has to hire more people or raise rates).
Plenty of risks, but when you look at the dynamics of their share repurchase program, you can probably lower the market risk substantially.