The new tax legislation will encourage companies to repatriate much of the cash they now hold outside the U.S., much of which could find its way to stock repurchases, writes Mark Hulbert in a recent Barron’s article.

But the expected surge in buybacks, he argues, “isn’t going to extend the bull market’s life longer than it would have lasted otherwise.”

Hulbert cites the first research regarding share repurchases (published in the 1990s) which found that they “added perhaps two percentage points to the annualized return of stocks,” and suggests that such a boost “isn’t big enough to keep a bear market at bay.” Further, writes Hulbert, today’s investors are not reacting as positively to buyback announcements. He cites a 2015 study showing that in recent years, half the stocks of repurchasing companies beat the market three years after their buyback announcement.

Hulbert addresses other arguments concerning buybacks, including:

• Effect on earnings-per-share: He cites data from AQR showing that the EPS of previous buyback companies have not grown faster than non-buyback companies;
• Share buybacks point to lazy companies that don’t want to reinvest: The same AQR study argues that share repurchase volume and net investment “have been positively correlated of late, as both…have increased since the end of the financial crisis.”

Hulbert points out: “None of this is to say that repurchases are never abused,” but says the takeaway for investors is that “it’s important to be choosy when investing in companies that are repurchasing their shares.” Stocks that perform the best after a buyback announcement, he says, fall closest to the “value end on the growth-versus-value spectrum.”