Invesco BuyBack Achievers ETF [PKW] Stock Forecast

PKW selects U.S. companies that have reduced shares outstanding by 5% or more in the last year. Fees are 0.61%, and the ETF manages $920 million in assets. The 5% threshold, combined with only utilizing one year's worth of buybacks, leads to high turnover. There is also no mechanism to remove current constituents that pause their buyback programs.

Share repurchases, or stock buybacks, have become increasingly prevalent in tech companies' earnings this year.

Buybacks are waning lately as borrowing costs are rising and cash reserves are shrinking.

In the fourth quarter, S&P 500 companies shelled out about $189 billion on stock buybacks, up 2% from the third quarter.

Corporate buybacks may surpass $1 trillion for the first time, according to S&P Global.

Invesco BuyBack Achievers ETF gives investors exposure to companies that buy back 5% of their shares or more. Buybacks are great if companies opportunistically buy below "intrinsic" value.

Oracle reported mixed first-quarter fiscal 2023 results. ORCL's earnings missed the Zacks Consensus Estimate, while revenues came in line.

U.S. corporate buybacks have been robust in recent months. But the Inflation Reduction Act includes 1% excise duty on repurchases.

The House of Representatives passed the Inflation Reduction Act on Aug. 12. It now goes to President Joe Biden's desk.

The 1% excise tax on buybacks that is part of the Inflation Reduction Act has spurred questions regarding the implications for investors. In a note to clients, Goldman Sachs' David Kostin estimated that the proposed 1% excise tax on buybacks would reduce earnings per share by about 0.5%, CNBC's Bob Pisani reported on Monday.