I have been digging into the accounting statements of a few US consumer staples companies and something that keeps bothering me is how much of their reported earnings growth over the last 5 years has come from share buybacks rather than actual operating improvement. Procter and Gamble is a good example where EPS has grown meaningfully but revenue growth has been largely flat when you strip out pricing. My question is how many investors here are actually adjusting for buyback distortion when evaluating earnings quality, and do you think the market systematically overpays for EPS growth that is essentially financial engineering rather than real business expansion?
