The Associated Press August 30, 2010, 1:31PM ET
CHICAGO
Shares of Fossil Inc. climbed Monday after the watch and accessories maker said it will buy back up to $750 million of its outstanding shares.
THE SPARK: The company said it plans to fund purchases with its cash flow as well as its $435 million of cash and cash equivalents. The repurchase authorization expires at the end of 2013.
Fossil has an estimated 67.1 million shares outstanding. Buybacks boost a company's per-share earnings and expand the percentage size of shareholders' stakes.
THE BIG PICTURE: Fossil's fashion watch business continues to be strong and trounce its competitors. That helped the company triple its second-quarter profit.
THE ANALYSIS: Jefferies & Co. analyst Randal Konik told investors in a research note that the company's decision highlights its confidence in its cash flow and its business trends.
"We think this may be the best story in retail today," he wrote, adding that Fossil should be able to double its size in the next five years.
SHARE ACTION: Fossil shares hit an all-time high of $49.50 in Monday trading. By early afternoon the company's stock was up $2.61, or 5.7 percent, to $48.62.
From Bloomberg Businessweek published on August 30, 2010, 1:31PM ET