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Synopsys Begins $100M Accelerated Share Buyback Program
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Synopsys Inc. (SNPS - Free Report) recently announced that it is going to buy back $100 million worth of its common stock under an accelerated share repurchase (ASR) agreement with Wells Fargo Bank NA. This reflects the California-based company’s sound financial position and favorable prospects.
Per the agreement, Synopsys will initially receive approximately 1.39 million shares while the remaining shares will be received on or before Feb 16, 2016, depending on the completion of purchase. The number of shares to be repurchased will be calculated on the basis of Synopsys’ volume weighted average share price during the stated period, after adjusting for a discount.
This is not the first ASR program undertaken by Synopsys. In May this year, the company had initiated an ASR program worth $125 million. Last year in December, it initiated a $200 million ASR program while in Dec 2014, it had started a $180 million ASR program that was completed in the third quarter of fiscal 2015.
According to the company, accelerated share repurchase arrangements are an integral element of its overall framework for enhancing investors’ worth. Continuing with its strategy of returning cash to shareholders, the company has repurchased stocks worth $400 million in the recently concluded fiscal 2016.
In September, Synopsys approved an extension of its existing share repurchase authorization to make it worth $500 million again. The company had nearly $435 million remaining under its normal share repurchase program at the end of fiscal 2016.
Synopsys’ financial strength allows it to continue with its buyback program. As of Oct 31, 2016, the company’s cash, cash equivalents and short-term investments were $1.117 billion. The company’s aggressive share repurchase policies are expected to boost investors’ confidence. Synopsys’ strategy to return wealth to shareholders reflects its growth potential and stable liquidity position.
Other companies that have a consistent record of returning value through share repurchases and dividend payments are Apple Inc. (AAPL - Free Report) , Electronic Arts Inc. (EA - Free Report) and Accenture plc (ACN - Free Report) .
We believe that apart from enhancing shareholders’ return, these initiatives also raise the market value of the stock. Through dividend payouts, companies bolster investors’ confidence, persuading them to either buy or hold the scrip. Looking ahead, Synopsys remains confident of its growth potential, thereby raising hopes for a further increase in shareholder value through dividend payouts and share buybacks.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries. The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products, as well as physical verification products.
Synopsys recently posted better-than-expected fourth quarter of fiscal 2016 results. Revenues as well as earnings improved year over year, mainly on the back of higher adoption of Synopsys’ products and strength in hardware products. Moreover, the company provided encouraging first quarter and fiscal 2017 guidance.
With respect to earnings surprise, Synopsys’ has surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average positive surprise of 27.9%.
Notably, Synopsys shares have surged 27.2% year-to-date, as compared with the Zacks categorized Computer-Software industry’s return of 8.1%, primarily due to the consistent performance. We believe the company’s aggressive share buyback policy will further boost investors’ confidence, thereby driving the stock price higher, going forward.
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Synopsys Begins $100M Accelerated Share Buyback Program
Synopsys Inc. (SNPS - Free Report) recently announced that it is going to buy back $100 million worth of its common stock under an accelerated share repurchase (ASR) agreement with Wells Fargo Bank NA. This reflects the California-based company’s sound financial position and favorable prospects.
Per the agreement, Synopsys will initially receive approximately 1.39 million shares while the remaining shares will be received on or before Feb 16, 2016, depending on the completion of purchase. The number of shares to be repurchased will be calculated on the basis of Synopsys’ volume weighted average share price during the stated period, after adjusting for a discount.
This is not the first ASR program undertaken by Synopsys. In May this year, the company had initiated an ASR program worth $125 million. Last year in December, it initiated a $200 million ASR program while in Dec 2014, it had started a $180 million ASR program that was completed in the third quarter of fiscal 2015.
According to the company, accelerated share repurchase arrangements are an integral element of its overall framework for enhancing investors’ worth. Continuing with its strategy of returning cash to shareholders, the company has repurchased stocks worth $400 million in the recently concluded fiscal 2016.
In September, Synopsys approved an extension of its existing share repurchase authorization to make it worth $500 million again. The company had nearly $435 million remaining under its normal share repurchase program at the end of fiscal 2016.
Synopsys’ financial strength allows it to continue with its buyback program. As of Oct 31, 2016, the company’s cash, cash equivalents and short-term investments were $1.117 billion. The company’s aggressive share repurchase policies are expected to boost investors’ confidence. Synopsys’ strategy to return wealth to shareholders reflects its growth potential and stable liquidity position.
Other companies that have a consistent record of returning value through share repurchases and dividend payments are Apple Inc. (AAPL - Free Report) , Electronic Arts Inc. (EA - Free Report) and Accenture plc (ACN - Free Report) .
We believe that apart from enhancing shareholders’ return, these initiatives also raise the market value of the stock. Through dividend payouts, companies bolster investors’ confidence, persuading them to either buy or hold the scrip. Looking ahead, Synopsys remains confident of its growth potential, thereby raising hopes for a further increase in shareholder value through dividend payouts and share buybacks.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries. The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products, as well as physical verification products.
Synopsys recently posted better-than-expected fourth quarter of fiscal 2016 results. Revenues as well as earnings improved year over year, mainly on the back of higher adoption of Synopsys’ products and strength in hardware products. Moreover, the company provided encouraging first quarter and fiscal 2017 guidance.
With respect to earnings surprise, Synopsys’ has surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average positive surprise of 27.9%.
SYNOPSYS INC Price, Consensus and EPS Surprise
SYNOPSYS INC Price, Consensus and EPS Surprise | SYNOPSYS INC Quote
Notably, Synopsys shares have surged 27.2% year-to-date, as compared with the Zacks categorized Computer-Software industry’s return of 8.1%, primarily due to the consistent performance. We believe the company’s aggressive share buyback policy will further boost investors’ confidence, thereby driving the stock price higher, going forward.
Currently, Synopsys has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>