A number of companies have issued reports in the last 30 days indicating they plan to buy back their own shares. On the face of it, that appears bullish, but stock buybacks are not always what they appear to be.

IN PICTURES: 5 Tips To Reading The Balance Sheet

Consider, for instance, Lockheed Martin Corporation (NYSE:LMT), an aerospace and defense major, that just announced it would repurchase up to $3 billion worth of stock. According to the company, the buyback was instituted because the firm was cash rich and couldn't find any suitable acquisitions in the defense sector.

The same holds for Cisco Systems, Inc. (Nasdaq:CSCO), whose shares took a beating two weeks ago after the company reported that business was likely to slow down in the future. Cisco's balance sheet boasts an incredible $39 billion cash hoard, so it wasn't surprising when it announced last week announcement that the company would repurchase $10 billion. Cisco has a history of repurchasing shares. Nearly $68 billion worth of market cap has already been absorbed through previous buyback programs.

The Bullish Buyback Band
Aeropostale, Inc. (NYSE:ARO) is a retailer of teen fashions with a history of stock buybacks going back five years. All in all, a billion dollars worth of shares have been removed from circulation, and management's plan is to lower the share count by an additional $300 million worth this year.

Aeropostale is also a winner in the price appreciation department, tacking on nearly 29% in the last full year. Despite that, the stock trades at a very low multiple to earnings. P/E is just 10.65. The company pays no dividend.

Cakes and Pastry and Meat, Oh My!
Sara Lee Corporation (NYSE:SLE) is a manufacturer of a broad array of packaged food and beverage products that it markets worldwide. The company has just announced a hugely ambitious buyback program that would see a full quarter, or $2.5 billion dollars worth, of the outstanding float retired.

Sara Lee stock has climbed 23.5% in the last 12 months. Notwithstanding that, the shares still pay 3.0% annually, though the P/E ratio is a bit rich at present. SLE stock trades with a multiple of 20.2-times last year's earnings.

Why Buy?
Rent-a-Center, Inc. (Nasdaq:RCII) is in the furniture rental business, and has been growing in a very creative fashion. RCII rents space inside other retailers operations, seeking to partner with similarly themed retailers. There are now over 200 such "mini-stores," and there are plans for another 600 by 2013.

The company has already repurchased $500 million in stock over the last ten years and plans now to buy another $300 million. RCII pays a nominal dividend of less than 1% and trades with a P/E of 10.0. In the last year shares climbed 55%.

The Wrap
Share buybacks are an important piece of the investment puzzle and can offer an important buy signal - when all the information surrounding them is known. The above three companies offer ample reasons for investors to buy, and the share repurchase is just one of them. (Find out what these company programs achieve and what it means for stockholders. Check out A Breakdown Of Stock Buybacks.)

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