Summary
Cognizant Technology Solutions Corporation (CTSH) announced on August 19, 2011, a significant expansion of its stock repurchase program. The Board of Directors approved an increase from $300 million to $600 million for the aggregate amount of Class A Common Stock that can be repurchased. This move indicates management's confidence in the company's financial health and its commitment to returning value to shareholders. The company had already completed the initial $300 million authorization. These repurchases can be executed through open market purchases or private transactions, subject to market conditions and applicable securities laws. Cognizant plans to fund these buybacks using its existing cash reserves and cash generated from ongoing operations. This decision suggests a belief by the leadership that the company's stock may be undervalued or that it represents an attractive use of capital compared to other investment opportunities.
Key Highlights
- 1Cognizant's Board of Directors approved an increase in its stock repurchase program authorization by an additional $300 million.
- 2The total authorized amount for share repurchases is now $600 million.
- 3The company had already repurchased the previously authorized $300 million of Common Stock.
- 4Repurchases will be conducted through open market purchases or private transactions.
- 5The program is expected to be funded by cash on hand and cash generated from operations.
- 6This action signals management's confidence in the company's financial position and outlook.