CRA International Inc.
) recently approved an extension of its stock repurchase program,
thereby maintaining the trend of returning wealth to its
shareholders from time to time, depending on market conditions.
Under this program, the company is authorized to repurchase up to
$5.0 million of its common stock on top of its existing share
Earlier, in August 2011, the company's Board of Directors had
allocated up to $7.5 million for common stock repurchase, which was
followed by another authorization of up to $4.45 million of its
common stock in February 2012. During the first six months of
fiscal 2012, the company bought back 252,585 shares at an average
price of $22.28 per share. As of June 30, 2012, the company had
around $2.1 million available for future repurchases under its
CRA International will fund this repurchase program through cash
balances. At the end of second-quarter 2012, the company had cash
and cash equivalents as well as short-term investments worth $41.8
million. Shareholders' equity at the end of the quarter stood at
$266.6 million. With no long-term debt burden and access to a $60.0
million credit facility, the company has adequate financial
flexibility to carry out its corporate strategy.
The increase in share buyback authorization reflects the
company's confidence in its fundamentals. At the same time, buying
back shares will help the company in reducing the share count,
thereby increasing earnings per share and return on equity.
As of August 13, 2012, the shares of CRA International were
trading at $16.08. The stock has historically traded between $13.41
and $27.93 in the last 12 months. Apart from bolstering
shareholders' value, this strategic move will also lift the
relatively undervalued share price.
CRA International, which competes with the likes of
FTI Consulting Inc.
Navigant Consulting Inc.
), currently carries a Zacks #5 Rank, which translates into a
short-term Strong Sell rating. We are also maintaining our
long-term Underperform recommendation on the stock.
CRA INTL INC (CRAI): Free Stock Analysis Report
FTI CONSULTING (FCN): Free Stock Analysis
NAVIGANT CONSLT (NCI): Free Stock Analysis
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