CNBC reporter Eric Rosenbaum covered President Biden’s push to quadruple the stock buyback tax in the 2023 State of the Union address. Vince (Qijun) Chen, then Director of Research at FCF Advisors, was quoted on how investors should evaluate buybacks through a cash flow lens: “Investors who care about cash return and shareholder value should care about operating results and doing buybacks with increased cash flow and EPS.” Chen’s analysis showed that among energy stocks in the Russell 3000, those doing buybacks backed by strong free cash flow returned 13.88% from 1996-2022 versus 7.99% for the average energy stock, demonstrating that fundamental cash flow backing matters more than buyback activity alone.
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