Originally Posted by
seenitall
Buying back one's own stock only makes sense when management has no good ideas for investments that would return more than what the stock is currently returning. That is, it is an admission of management's inability to improve from the present.
Not entirely true, that is just one reason. If you buyback your shares the earnings per share is increased as the net income is spread over less shares. This makes the stock look more appealing for everyone likes earnings. Thus it is a manipulation of sorts for that purpose, although if you have a strategic announcement or some large pivot to announce soon, that isn't public knowledge it would also make sense to buy back your shares before this in house revelation is shared and the stock jumps afterwards. Not saying that will happen, but it is a reason. Like insider trading of the BOD's, they know xxx announcement will be met with an increase in the stock price, so they buy it back before hand, the company does not individuals on the BOD, but they make the decision.
I don't know if UA is under or over valued, but buying back your stock when money is cheap as it still most definitely is is a gamble of sorts, for you have the service whatever debt was created in buying back the shares (I don't believe UA has this cash laying around). The debt also has the advantage of helping reduce tax liability for the company in servicing the debt (interest on the debt payments are deductible ).