Stock buybacks see growing skepticism

When it comes to stock buybacks, more investors are wondering what's in it for them.

A buyback should be good for shareholders, because it means there will be fewer remaining shares, and each remaining share will be worth more when valued against the company's earnings.

But increasingly, stock buyback announcements are getting a skeptical reception, because many times, the number of shares doesn't fall or in some cases, even rises. "Buybacks are often hocus pocus, smoke and mirrors," says Gordon Bell, fund manager at Citigroup Asset Management.

Announcing a buyback has never been a guarantee a company would actually do it. Even when a company does buy back stock, the benefit is often mitigated by other things it does. A USA TODAY analysis of data from The Buyback Letter found that during the fourth quarter of 2003, 94 companies announced stock buybacks. But as of the third quarter this year, on average, the number of shares outstanding remained almost exactly the same.

It's been the same story among companies in the Standard & Poor's 500 this year. So far, 205 have announced buybacks and released updated share counts. But among these companies, the ... // 59% Remaining