The Globe and Mail reports in its Saturday edition that when it comes to issuer bids, companies are lousy at market timing. The Globe's David Berman writes that last week Manulife Financial announced a $1.2-billion share buyback, at a time when its share price was trading at a 15-year high. When a company does a buyback, it cuts the number of outstanding shares -- a substantial 2.8 per cent, in the case of Manulife -- from circulation. That means that corporate profits are divided among fewer shares, boosting earnings on a per-share basis. That is good for shareholders, who can be rewarded with gains. However, as a market-timing signal, buyback activity leaves a lot to be desired. Companies often buy their own shares when prices are high and ignore buying opportunities when their stocks are cheap. University of Arizona finance professor Alice Bonaime says, "Companies may believe they are buying low, but the evidence in support of managers successfully timing the market is at best mixed." She says this is likely because stock prices and repurchases tend to rise when corporate earnings are high. Companies often cut back on repurchases during recessions, when profits are down and hoarding cash may be necessary.