62% of S&P 500 buyback programs destroyed shareholder value over the last decade
u/Ok-Line2658 ·
Reddit — r/ValueInvesting
· May 21, 2026 at 16:26
· ⬆ 16 pts
· 💬 16 comments
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AI Summary
Summary
The post analyzes 183 S&P 500 buyback programs over the past decade, finding that 62% destroyed shareholder value by buying back stock above their five-year median EV/EBIT and subsequently underperforming the index by 3.8% annually.
The author contrasts Intel (bad buyback, falling revenue) with AutoZone (good buyback, 8% annual revenue growth), arguing that revenue growth—not the purchase multiple—is the key separator.
Quality assessment: Moderately well-researched DD using screening data, but limited depth (e.g., "probably breaks for cyclicals") and no full methodology—borderline between data-driven observation and speculative inference.
Intel spent $23B on buybacks at a ~10x EV/EBIT while revenue declined 20% over the period—a textbook value-destroying repurchase. The post implies that continued lack of revenue growth will persist, making future buybacks equally destructive and likely pressuring the stock. Short INTC as a bet that its buyback-driven capital allocation continues to erode intrinsic value, lagging the broader market. Cyclical recovery in semis, new product cycle (e.g., foundry success), or activist intervention could reverse revenue trends.
AutoZone spent $18B at 14x EV/EBIT but grew revenue 8% annually, making its buyback program a success. The author’s screening suggests AZO is an exemplar of buybacks that work—sustained top-line growth validates the strategy and supports further capital returns. Long AZO as a quality compounder that uses buybacks effectively; the post reinforces its superior capital allocation track record. Cyclical auto parts demand slowdown, margin compression from inflation, or a shift in consumer behavior (e.g., more new car sales).
This Reddit post, published May 21, 2026,
features u/Ok-Line2658
discussing INTC, AZO.
2 trade ideas extracted by AI with direction and confidence scoring.