AmericaFirst believes a company’s own management team knows more about its future prospects than any analyst.

For more than two decades, share repurchases have surpassed cash dividends as the primary way for companies in America to reward their shareholders. Companies have been using buybacks as a way to beneficially spend their additional cash and return value back into shareholder's hands.

AmericaFirst’s research suggests that over the long-term, buyback portfolios have generated positive excess returns when compared to their parent indices in the US market. Our research also suggests an equal-weighting approach to selecting buyback securities often enhances performance in both up and down markets.

Financial Strength at a Value

Companies that engage in buybacks can have a value bias because managers typically repurchase shares when they believe their company is undervalued. AmericaFirst research has observed that companies engaging in share buyback programs display stronger financial strength as measured by such ratios as Return on Equity and Operating Earnings Yield than companies not participating in share repurchase programs.

A Common-Sense & Multi-Factor Approach

The utilization of individual factors can be cyclical and may require precise market timing to maximize returns. In its research, AmericaFirst has discovered that a multi-factor approach that includes Quality, Value & Momentum together could result in an improved investment experience for investors through increased potential reward while reducing risk or other negative consequences such as volatility when compared with single factor strategies alone .

Rather than focusing on a single driver to return, AmericaFirst uses a multi-factor approach that ranks the top 100 S&P 500 buyback stocks. Our approach considers sales growth, valuation, capital efficiency and balance sheet strength before selecting which ones have the highest ranking.

In addition, we select stocks on an equal-weight basis to provide better diversification by avoiding concentration of portfolio in few big stocks. This means the risk is spread across a wider range of companies and your investment may be more resilient to changes in one or two underlying securities.