Share Buybacks Can Enhance A Stock.(A)(INVESTOR'S CORNER)

Byline: CHRISTINA WISE

As you search for the best stocks, take note if a company buys back its own shares. It could be a sign of management's faith in its future.

Corporate buybacks got plenty of media attention in the wake of the Sept. 11 attack. Scores of firms said they would be buying back shares when the market reopened on Sept. 17.

In all, 417 companies authorized stock repurchases between Sept. 11 and Dec. 14, according to data tracker Thomson Financial.

Of these, 88 announcements came within a week of the terrorist attack. In all, firms OK'd the buyback of nearly 2.14 billion shares worth $57 billion. The average authorization was 5.5 million shares worth $143 million.

Don't use buybacks as a primary factor for selecting stocks. Stick to those with outstanding fundamentals. Narrow that group to stocks that form solid bases and are in a top-performing industry group.

Yet if a company buys back, say, 5% to 10% of its stock, treat this as one more positive. Why? Buybacks tell you several things about the company.