This is from the NYT online column Dealbook by Andrew Ross Sorkin there is no link for this column.
Buybacks don’t work for all companies. (Even Buffett admits this.) Shareholders tend to punish companies that repurchase shares that are already too pricey. Subramanian calculates that the 50 biggest companies in the S&P 500 are overvalued. For them, buybacks don’t make as much sense.
Companies may be buying back too many shares. Companies announced plans to buy more than $1.2 trillion of their own stock last year and could come close to, or surpass, that this year. Firms are spending roughly 90 percent of their earnings on buybacks and dividends, according to Bharat Ramamurti, deputy director of the National Economic Council. Some market pros are having second thoughts, too. In a December survey of global fund managers by Bank of America, 56 percent said they would prefer that the C.E.O. used excess funds to shore up the balance sheet; just 16 percent said they wanted to see more buybacks.