As part of its effort to enhance shareholder value, the Board of Directors of Fiserv, Inc. (FISV) has authorized the company to buy back an additional 10 million shares of its common stock. This represents about 7% of the company’s outstanding shares in the market.
The company has the option of conducting this buy-back program either in the open market or through privately negotiated transaction. This, however, will be in accordance with market condition assessments and other related factors. There is no expiration date for this authorization.
Fiserv previously repurchased a total of 8.8 million shares for $553 million during 2011 and had around 4.7 million shares remaining under its previous share repurchase authorization program.
On February 2, 2012, Fiserv reported its fourth quarter 2011 financial results, whereby it ended with net cash from operating activities of $953 million. Moreover, important acquisitions were completed which included M-Com, Maverick solutions and CashEdge.
The outlook for full year 2012 provided by Fiserv during its last quarter result release was highly approbatory with an adjusted earnings per share projection of $5.04 – $5.20, signifying its aim to increase of 10% – 14% annually. Furthermore, the company is perspicacious of generating an increase in free cash flow of 8% – 12% year over year.
It is quite pellucid that Fiserv considers retaining shareholders’ interests to be its top priority but, at the same time, the company is also quite prescient about maintaining a thewy hold on its capital and cash flow.
Fiserv continues to battle ominous competition from big players in the industry including Fidelity National Information Services Inc. (FIS), Envestnet, Inc. (ENV) and Heartland Payment Systems, Inc. (HPY).
The current Zacks Consensus Estimate for the first quarter of 2012 and for fiscal 2012 are $1.15 and $5.13, respectively. The company currently retains a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating. However, we presently maintain our ‘Neutral’ recommendation on the stock.
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