CSL buy-back continues as share price falls

Leading blood plasma group CSL  (ASX: CSL) has been making the most of the recent fall in its share price with continued on market purchases of its shares. Since the latest buy-back was implemented in October 2012 over 14 million shares have been re-purchased and cancelled at a total cost of around $820 million.

With CSL shares trading at their lowest level since April it would appear an opportune time to boost the daily buy-back amount, which in the last few days has been running at around a $10 million spend. Other health sector stocks to be conducting buy-backs at present include wholesaler Sigma Pharmaceuticals (ASX: SIP) and medical products supplier ITL  (ASX: ITD).  As the chart below shows, there is often a correlation between companies conducting buy-backs and share price outperformance.


Source: Google Finance

Foolish takeaway

Buy-backs can be a great way for management to increase shareholder value. It can be worth investors investigating companies that announce buy-backs given the potential for these stocks to outperform.

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Motley Fool contributor Tim McArthur has no financial interest in any company mentioned in this article.

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