Share price of
Alliance Data Systems Corporation
) has been on an uptrend following the approval of a new share
buyback program worth $400 million by the company's board of
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The current share repurchase program replaces the earlier one
that expired at the end of 2013. In the first nine months of the
year, Alliance Data had repurchased about 1.4 million shares for
The previous buyback program was approved on Jan 2, 2013, whereby
the company was authorized to repurchase shares worth $400
Alliance Data's continued share repurchase activity reflects its
strong financial position, which in turn, is sustained by solid
operational performance at the company.
Share repurchases benefit a company's earnings per share, book
value as well as shareholder equity, as buyback activities lower
share count. Meanwhile, Alliance Data continues to concentrate on
enhancing its core line business growth and operating income. The
company delivered positive earnings surprises in two of its last
four quarters with an average beat of 0.8%.
However, no earnings momentum has been witnessed over the last 7
days. As a result, the Zacks Consensus Estimate for 2013 and 2014
remains flat at $9.40 per share and $11.86 per share,
respectively. Nevertheless, we expect that the announcement of
the recent buyback authorization will encourage analysts to pull
up their estimates going forward.
Alliance Data presently has a Zacks Rank #2 (Buy). Other
top-ranked stocks worth considering in the Financial Transaction
Services industry are
Fidelity National Financial Services, Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).