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Is Share Buyback Tsunami an Investor Buy Signal?

Company share buybacks are roaring, at a rate unseen in years. Is that a market buy signal? Mike Holland, chairman of Holland & Co., and Jack Bouroudjian, chief executive of Indexfuturesgroup.com, offered their insights.

"It means there's growing confidence in the boardrooms," said Holland.

He believes it is a buy signal, "though not one I find overpowering."

"And as shareholders, we'd much prefer cash dividends, given history," he added.

Counterpoint:

Bouroudjian had a different take.

"It's a mixed message: [Firms are] either seeing value, or they don't know what else to do with their money."

"The thing you have to remember about buybacks is that they either come at the beginning of a big bull move, or as a bull move is toward the end of its maturation process," Bouroudjian explained.

"I'm starting to think the market is more at its maturing side."

For the unconvinced, Bouroudjian had a clincher:

"Remember, there were a lot of buybacks about 10 years ago, as we were coming off of that tech bubble." (See slideshow, below.)

Recent Buybacks (at least $1 Billion):

Applied Materials

Qualcomm

Lowe's

Philip Morris International

DirecTV

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CNBC Slideshow:

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CNBC Data Pages:

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Disclosures:

Disclosure information was not available for Holland, Bouroudjian or their respective companies.

Disclaimer