Both articles are based on the same Thomson Reuters study. I can't seem to get a free copy, so I can't comment on the quality of the analysis. But I have some questions:
(1) Did the study measure repurchase announcements, or actual repurchases, or both?
(2) Did the study control for other things going on at the same time?
(3) Did the results hold after a month? A year? Two years?
(4) Did the study compare share repurchases with dividend increases? With special dividends?
FWIW there is a huge literature out there. Most of it finds that share repurchases are positive. Here is an example
. And here's the abstract from another
The results show that initiation announcements of open market share repurchase programs exhibit a two-day abnormal return of approximately 2%. The price impact on the actual repurchase days is positively correlated with the daily repurchase volume, and is both statistically and economically significant during the first 3 repurchase days in a repurchase program. The long-run abnormal stock performance is positively associated with the fraction of shares bought in the program and is approximately 7% the first year following the initiation announcement. The results indicate that repurchase trading provides price support and that the market participants detect and perceive the repurchase announcement and the first repurchase days in a repurchase program as a signal of undervaluation. The long-run abnormal stock performance found in the study is consistent with the results found in prior studies.
FWIW, share repurchases have the potential to be much more tax-efficient than the same sum distributed as dividends. On the negative side, share repurchases can be initiated by management as a way to increase the value of stock options they own.
Many of the criticisms of share repurchases in the articles Google turned up are hilarious. Examples:
(1) Share repurchases show management's lack of confidence in the company's ability to use the money internally. Yes. So do dividend increases.
(2) Share repurchases reduce the number of shares outstanding, and so reduce liquidity. By that reasoning, stock splits should increase the value of shares.
(3) Share repurchases are bad for the economy -- companies should use the money to create jobs instead. Uh-huh. So dividend increases must be bad too.
(4) Share repurchases discriminate among shareholders -- only some get any money. Gosh, then dividend reinvestment plans must be bad too.
The plural of anecdote is NOT data.
In God we trust, all others bring data (William Edwards Deming)