fraction

1. Homogeneous component of a mixture that can be separated in relatively pure from other components by certain processes such as centrifugation, crystallization, distillation, and filtration.

2. Numerical quantity that is not a whole number.

There is only one combination of facts that makes it advisable for a company to repurchase its shares: First, the company has available funds -- cash plus sensible borrowing capacity -- beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively-calculated. To this we add a caveat: Shareholders should have been supplied all the information they need for estimating that value. Otherwise, insiders could take advantage of their uninformed partners and buy out their interests at a fraction of true worth. We have, on rare occasions, seen that happen. Usually, of course, chicanery is employed to drive stock prices up, not down.
The business "needs" that I speak of are of two kinds: First, expenditures that a company must make to maintain its competitive position, and second, optional outlays, aimed at business growth, that management expects will produce more than a dollar of value for each dollar spent.

• The Only Time a Company Should Repurchase its Shares