What Happened:
Shares of higher education company Laureate Education (NASDAQ:LAUR) jumped 8.8% in the morning session after the company announced a new share repurchase program to acquire up to $100 million of its common stock. This could indicate that management believes shares are undervalued.
In addition, the announcement highlights management's focus on returning value to shareholders, as the repurchase reduces the total shares in circulation, improving the ownership stake of existing shareholders. This increase in ownership stake could result in shareholders receiving a larger portion of future profits or dividends.
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What is the market telling us:
Laureate Education’s shares are not very volatile than the market average and over the last year have had only 4 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Laureate Education is up 25.5% since the beginning of the year, and at $16.56 per share, has set a new 52-week high. Investors who bought $1,000 worth of Laureate Education’s shares 5 years ago would now be looking at an investment worth $983.74.
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