TOL - Jim Cramer Says Investors Should Check Share Count Before Buying A Stock: 'You Want A Management That Agrees With You' | Benzinga
Jim Cramer highlighted the role of share count reduction behind more than half of the S&P 500 stocks achieving new 52-week highs in the first quarter.
What Happened: Cramer mentioned that a considerable number of companies have substantially cut their share count since 2019, an approach that has mostly flown under the radar, as reported by CNBC on Monday. This trend of share count reduction spans multiple sectors, including housing, retail, and technology.
“Check the share count before you buy a stock. You want a management that agrees with you, not one that thinks it can give away stock as compensation, often to throw you off the scent of adulterated earnings power,” he said.
Cramer cited examples of companies such as Lennar (NYSE:LEN) and Toll Brothers (NYSE:TOL) in the housing sector that have significantly reduced their share count. For example, Lennar’s outstanding shares have decreased to 276 million from 318 million five years ago, while Toll Brothers’ shares have dropped to 105 million from 145 million.
Similarly, retail companies like ...