February 2026
Along with stock valuation and management strength, cash flow generation sits at the foundation of DM’s equity investment approach. Companies that are left with extra capital after covering operating expenses have choices to make, and much of our work is geared toward understanding what management plans to do with excess funds. In our analytical framework, a company may pursue a growth-oriented tack — either by redeploying capital back into the business or using it to acquire competitors or complementary enterprises — or it may decide to distribute it to shareholders through dividend increases or share buybacks.
When a company purchases its own shares in the open market, it “retires” them which causes remaining shareholders to own a slightly larger slice of the corporate pie. In reviewing buyback announcements, however, we’re careful to ensure that employee share participation and other incentive programs aren’t causing stock to be issued as quickly as it’s being repurchased. Other questions we ask in our analysis include: Are the company’s shares reasonably valued at the time? If not, could the funds be better directed elsewhere, perhaps toward R&D or acquisitions? Is management using the buyback to temporarily boost earnings per share to meet performance targets?
While several of the holdings in DM portfolios have built impressive buyback histories, few have been as consistent and as voracious as Apple in devouring its own stock. As shown in the chart below, the company’s share count has been on a steep decline since it peaked in early 2013 and is well on its way to being halved. Over this period, shares have disappeared at a compound annual rate of about 3% which, all else equal, has undoubtedly helped to drive price appreciation.
Many of the big tech companies now known as “hyperscalers” are also renowned for their aggressive buyback policies. Today, however, these firms are pouring substantially all of their free cash flow into artificial intelligence investment and data centre buildout. Because little capital is likely to be available for share repurchases, we’re about to find out just how important these programs have been to ongoing stock performance.
Portfolio Activity
In January, we added to our gold streaming position by purchasing Triple Flag Precious Metals in the DM Canadian Equity Portfolio.
Feature Stock
Thomson Reuters Corp. (TRI)
TRI is a content and technology company known primarily for the services and information that it provides to both the legal and financial professions. Despite being a strong return generator for DM portfolios over several years, TRI has recently fallen victim to the emergence of artificial intelligence and the worry that it could undermine the company’s competitive position. In particular, Anthropic’s legal plugin for its Claude Cowork platform is seen as potential threat to a portion of TRI’s offering. In reality, however, the moat that TRI has built with its Westlaw and core tax products should be relatively difficult to ford. For example, Westlaw is one of only a few law libraries and it’s been built by collecting cases from the past 150 years; it currently has 3500 sources to add to its library of 300 million cases, all indexed and annotated by its team of 1700 lawyers. Because of its massive installed information base, we believe that TRI will eventually be a beneficiary, rather than a victim, of AI by offering tools to enhance efficiency and decision-making for legal, tax, and accounting professionals. Having previously sold half our position in the stock at more than $200, we recently re-upped our TRI weight at roughly $121/share