5 Stocks That Are Aggressively Buying Back Shares According To Goldman Sachs

In this article, we discuss 5 stocks that are aggressively buying back shares according to Goldman Sachs. If you want to see more stocks in this selection, check out 20 Stocks That Are Aggressively Buying Back Shares According To Goldman Sachs. 

5. Marathon Oil Corporation (NYSE:MRO)

Share Price Returns From November 2, 2022 to January 30, 2023: -6.09%

Number of Hedge Fund Holders: 50

Net Buyback Yield: 13%

Marathon Oil Corporation (NYSE:MRO) is a Texas-based independent exploration and production company that provides crude oil and condensate, natural gas liquids, and natural gas. Marathon Oil Corporation (NYSE:MRO) is one of the stocks that are aggressively buying back shares, with a net buyback yield of 13% as per Goldman Sachs. On January 25, the company declared a quarterly dividend of $0.10 per share, an 11.1% increase from its prior dividend of $0.09. The dividend is payable on March 10, to shareholders of record on February 15. 

On January 24, Wells Fargo analyst Roger Read assumed coverage of Marathon Oil Corporation (NYSE:MRO) with an Overweight rating and set a target price of $41. The analyst considers Marathon Oil Corporation (NYSE:MRO) to be a top choice in the sector due to its good performance, stock inventory, cash returns, and share buybacks. 

According to Insider Monkey’s data, 50 hedge funds were bullish on Marathon Oil Corporation (NYSE:MRO) at the end of the third quarter of 2022, compared to 41 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with 8.3 million shares worth $188 million. 

Here is what Carillon Tower Advisers had to say about Marathon Oil Corporation (NYSE:MRO) in its “Carillon Clarivest Capital Appreciation Fund” first-quarter 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”

4. Lowe’s Companies, Inc. (NYSE:LOW)

Share Price Returns From November 2, 2022 to January 30, 2023: 9.62%

Number of Hedge Fund Holders: 61

Net Buyback Yield: 13%

Lowe’s Companies, Inc. (NYSE:LOW) is a North Carolina-based home improvement retailer that offers a range of products for construction, maintenance, repair, remodeling, and decorating. On December 7, Lowe’s Companies, Inc. (NYSE:LOW)’s board of directors announced that they authorized a new $15 billion common stock repurchase program. The new repurchase program has no expiration date and adds to the previous program’s balance, which came in at $6.4 billion on December 6.

On January 23, R5 Capital analyst Scott Mushkin downgraded Lowe’s Companies, Inc. (NYSE:LOW)’s to Sell from Hold with a price target of $184, down from $203.

According to Insider Monkey’s third quarter database, 61 hedge funds were bullish on Lowe’s Companies, Inc. (NYSE:LOW), compared to 53 funds in the last quarter. Bill Ackman’s Pershing Square held the biggest position in the company, comprising 10.3 million shares worth $2 billion. 

Baron Funds made the following comment about Lowe’s Companies, Inc. (NYSE:LOW) in its Q3 2022 investor letter:

“Lowe’s Companies, Inc. (NYSE:LOW) is the second-largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. The company is valued at only 14 times estimated earnings per share versus its long-term average P/E multiple of approximately 18 times estimated earnings per share.

The shares of Lowe’s Companies, Inc. increased 7% in the most recent quarter following better-than-expected quarterly business results. Lowe’s is the second largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. We believe the shares are attractively valued at only 14 times estimated earnings per share versus a long-term average P/E multiple of approximately 18 times estimated earnings per share.”

3. Ralph Lauren Corporation (NYSE:RL)

Share Price Returns From November 2, 2022 to January 30, 2023: 37.19%

Number of Hedge Fund Holders: 22

Net Buyback Yield: 17%

Ralph Lauren Corporation (NYSE:RL) is a New York-based company that designs, markets, and distributes lifestyle products including clothing, footwear, and accessories. On January 27, BMO Capital analyst Simeon Siegel downgraded Ralph Lauren Corporation (NYSE:RL) to Underperform from Market Perform with a price target of $100, up from $96. The analyst noted that although the company has a strong brand and management team compared to its competitors, who created the “Sell Less, Charge More” strategy, the stock has nearly returned to its pandemic-peak levels after a 50% increase over the past 4 months. The firm is also worried that the strong performance in Asia is hiding the declining margins in North America, which are significantly lower than pre-pandemic levels.

According to Insider Monkey’s data, Ralph Lauren Corporation (NYSE:RL) was part of 22 hedge fund portfolios at the end of the third quarter of 2022, compared to 24 in the last quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held the biggest position in the company, with 801,348 shares worth $68 million. 

Heartland Value Plus Fund released its Q3 2020 investor letter and mentioned Ralph Lauren Corporation (NYSE:RL). Here is what the fund said: 

“The business climate remains cloudy. As such, we continue to seek companies trading at attractive valuations, with strong management teams and that have avenues to succeed under multiple scenarios. For example, we initiated a position in Ralph Lauren Corp. (RL), a global lifestyle company that sells clothing, accessories and home goods.

Shares of Ralph Lauren tumbled earlier this year during the COVID-19 selloff. The stock has yet to fully recover as investors continue to cast a skeptical eye toward apparel companies and retail brands in the Consumer Discretionary space. While the global pandemic has been a severe blow to the beleaguered apparel industry, we view Ralph Lauren as a relative winner in the space.

Ralph Lauren is a best-in-breed brand with high gross profit margins and a loyal clientele. Management is using the disruption from the pandemic to accelerate cost-cutting efforts and pivot to an e-commerce growth model. With approximately $800 million in net cash on its balance sheet, we believe Lauren is well prepared to weather current headwinds in retail and should increase sales and earnings in the long-term. Despite our favorable outlook, shares are trading at roughly 6x enterprise value/next year’s earnings before interest, taxes, depreciation and amortization.”

2. Tapestry, Inc. (NYSE:TPR)

Share Price Returns From November 2, 2022 to January 30, 2023: 45.22%

Number of Hedge Fund Holders: 40

Net Buyback Yield: 20%

Tapestry, Inc. (NYSE:TPR) is a New York-based company that provides luxury accessories and branded lifestyle products worldwide. The company operates in three segments – Coach, Kate Spade, and Stuart Weitzman. On January 23, Barclays analyst Adrienne Yih downgraded Tapestry, Inc. (NYSE:TPR) to Equal Weight from Overweight with a $43 price target. The analyst’s report on promotions for handbags shows potential risk in the demand for accessories and handbags. The firm also noted that the effects of inflation are impacting higher income households.

According to Insider Monkey’s data, 40 hedge funds were long Tapestry, Inc. (NYSE:TPR) at the end of September 2022, compared to 36 funds in the prior quarter. Robert Pohly’s Samlyn Capital is a prominent stakeholder of the company, with 3.5 million shares worth $99.3 million. 

Here is what Ariel International & Ariel Global Fund has to say about Tapestry, Inc. (NYSE:TPR) in its Q3 2021 investor letter:

“Luxury accessory and lifestyle brand, Tapestry, Inc. was the top contributor to performance over the trailing one-year period. Revenue improvement across all three brands with a notable increase in consumer demand, particularly for the Coach business, triple-digit growth in e-commerce, and better than expected pricing, drove margins higher. Looking ahead, we expect Tapestry’s supply chain and SKU rationalization initiatives to continue to deliver margin expansion. Together, with early signs of improved receptivity for the Kate Spade brand, we believe a significant value creation opportunity lies ahead.”

1. Marathon Petroleum Corporation (NYSE:MPC)

Share Price Returns From November 2, 2022 to January 30, 2023: 16.51%

Number of Hedge Fund Holders: 50

Net Buyback Yield: 22%

Marathon Petroleum Corporation (NYSE:MPC) operates as an integrated downstream energy company in the United States. On January 27, Marathon Petroleum Corporation (NYSE:MPC) declared a quarterly dividend of $0.75 per share, in line with previous. The dividend is payable on March 10, to shareholders of record on February 16. Marathon Petroleum Corporation (NYSE:MPC)’s net buyback yield as per Goldman Sachs data came in at 22%. 

On January 9, Barclays analyst Theresa Chen raised the firm’s price target on Marathon Petroleum Corporation (NYSE:MPC) to $130 from $126 and maintained an Overweight rating on the shares. The analyst predicts another quarter of high R&M earnings due to a favorable macroeconomic environment.

According to Insider Monkey’s data, 50 hedge funds were bullish on Marathon Petroleum Corporation (NYSE:MPC) as of the end of the third quarter of 2022, and Paul Singer’s Elliott Management is the leading position holder in the company, with 11 million shares worth $1 billion. 

Here is what Clark Street Value has to say about Marathon Petroleum Corporation (NYSE:MPC) in its Q4 2021 investor letter:

“During the worst of covid, I bought some LEAPs on Marathon Petroleum (MPC) as a proxy for Par Pacific (PARR) since long dated options weren’t available on the later.  Those MPC calls expire next month and I’ll take profits, with PARR I’ve reduced my position throughout the year and might sell the rest early next year, I’ve owned it for 6-7 years and it has gone nowhere, they haven’t touched the NOLs, just a difficult business that I probably don’t understand as well as I should.”

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