Stock buybacks: At the right time

I greatly enjoyed Saj's post on stock buybacks at the wrong time. I wholeheartedly agree that this is a value destroying trend. When money is plentiful, it is invariably true that the assets are priced richly.

Although, I would like to point out two exceptions to this.

Cisco Systems (CSCO) recently experienced a sharp drop in the share price because of a guidance mismatch. Since this organization has a solid balance sheet with $38B in cash, they immediately announced that they will begin a $10B share buyback at those low prices. Cisco is a business that is often subject to market's extreme sentiments, positive or negative. It is good to see that the management realizes that and plays to that sentiment to increase shareholder value.

I will post my second example in the following post.

Disclosure: I own Cisco at the time of this writing.