Category

Capital Allocation

Capital AllocationCapital MarketsCOVID-19
April 30, 2020

COVID-19 Puts Buyback Programs on Hold—but Not for Everybody

Some companies are keeping share repurchases programs going while many others suspend them.“We are continuing to buy back stock,” said the treasurer of a cash-rich technology company in mid-March, speaking to peers during a virtual NeuGroup meeting of mega-cap businesses. “We haven’t pulled share repurchases either,” said the treasurer of a large health care company with a very healthy balance sheet and strong cash flow. Later that day, a third treasurer told the group that investor Bill Ackman was feeding…
Antony Michels
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Capital AllocationCash & Working Capital
February 27, 2020

A Look Back at Our Enterprise Reconciliation Insight

Founder’s Edition, by Joseph Neu A 20-year-old best practice guide says a lot about the state of working capital management today. There seems to be a lot of renewed interest in working capital management lately, with a focus on automating processes, capturing data and deploying technology. The goal: to improve analysis and predictability of the quote-to-cash, order-to-delivery and purchase-to-pay cycles. This stands to vastly improve working capital management, but especially cash and liquidity management. I kept thinking, all of this…
Ted Howard
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Capital AllocationCapital Markets
January 28, 2020

Share Repurchases: Don’t Wait for the Sell-off

The case for spending all (or almost all) the cash allocated to buybacks right away. Monday’s stock market sell-off provides an opportunity to revist an insight on stock buybacks from a NeuGroup meeting last spring: A risk management expert at Deutsche Bank argued that waiting for dips is not the most effective way to repurchase shares. That’s worth considering given that many companies only buy back their stock when the price dips below what they consider its intrinsic value. Danger…
Antony Michels
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Capital AllocationInsights NewsletterInvestment Management
January 21, 2020

What Would an AI-Driven Capital Allocation Look Like?

Founder’s Edition, by Joseph Neu Perennial discussions of capital allocation tend to end up in essentially the same place.My friend Tom Joyce at Deutsche Bank circulated the chart below last week in his “Chart of the Day” email. This one caught my eye because it shows how corporate uses of capital, at least at the S&P 500-company level, are pretty consistent year to year. M&A and Buybacks. Tom calls out the changes: “During the current M&A upcycle, which began in late…
Ted Howard
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Capital AllocationCapital MarketsCash & Working Capital
January 9, 2020

The Art—Not Science—of Matching Capital Allocation to the Situation

Treasurers discuss balancing the need for liquidity with keeping cash levels moderate as business ebbs and flows. Decisions about capital allocation help treasury pave the way for the road ahead and may take on added importance for businesses generating lots of cash—as well as for those whose growth is downshifting. Treasurers at a recent NeuGroup meeting of life sciences companies shared approaches to the challenges of allocating capital during a variety of scenarios and situations. Optimal capital allocation amid uncertainty.…
Antony Michels
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BankingCapital AllocationCapital MarketsRegionalTreasury Management
January 23, 2019

The Five Cash Management Initiatives Treasurers Should Consider

When it comes to cash management, treasurers must keep their focus on ways to make it more efficient and cost effective. Editor’s note: This article was originally posted on iTreasurer.com on October 09, 2014. The year 2014 has been one focused on efficiency and innovation as treasurers consider outside-the-box strategies for unlocking working capital and improving the tactical aspects of treasury. Major initiatives including SEPA and the internationalization of the renminbi (RMB) have proven to be catalysts for greater global…
Ted Howard
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