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Comparing Tech Companies on Market Capitalization and Stock Price

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Jan. 2 2016, Updated 10:05 p.m. ET

Share buybacks have a positive impact on EPS

A share buyback program is generally positive news for investors. It means management believes that the firm’s shares are undervalued. As the number of shares outstanding falls, each available share represents a greater percentage of ownership in the company. Usually, that means each available share is worth more. A share buyback has a positive effect on EPS (earnings per share), as well.

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Apple

In the last five years, Apple (AAPL) has concentrated a lot on share repurchase programs. Since December 2010, Apple’s stock has risen from $46.47 to $108.74. In the same period, the firm’s market capitalization has increased from $299.6 billion to $606.26 billion. Given the 102.4% increase in the firm’s market cap, AAPL shareholders have seen a return of 134%.

Microsoft Corporation

Since December 2010, Microsoft’s (MSFT) stock has risen from $27.97 to $56.55. The firm’s market capitalization has increased by 88.8% from $239.3 billion to $451.72 billion, and shareholders have seen a return of 102.2%.

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Oracle Corporation

Since December 2010, Oracle’s (ORCL) shares have risen from $22.57 to $43.86. In the same timeframe, the firm’s market capitalization has fallen from $159.15 billion to $155.61 billion. While the market capitalization has fallen by 2.2%, shareholders have seen a return of 17.6%.

Qualcomm

Since December 2010, Qualcomm’s (QCOM) shares have risen from $49.99 to $50.88. In the same timeframe, the company’s market capitalization has decreased from $81.68 billion to $76.48 billion. While the market capitalization has decreased by 6.4%, shareholders have seen a return of 1.8%.

Oracle and Qualcomm constitute 4.8% of the Technology Select Sector SPDR Fund (XLK).

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