Aggressive buybacks are giving some companies an edge, Jim Cramer says

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As buybacks slow across the market, CNBC’s Jim Cramer on Tuesday told investors why he thinks generous share repurchasing is currently working in some companies’ favor, citing a note from Goldman Sachs

analyst David Kostin.

“Kostin has some great news here: while buybacks have slowed, investors continue to reward companies that aggressively purchase their own shares,” he said. “And there’s your edge. Stocks with bountiful buybacks can do well here, in contrast to those that might not. It’s an edge. It’s not foolproof, but it’s certainly an arrow in your stock-picking quiver.”

Buybacks are integral to the market because they “drain the excess supply from the system,” Cramer said. For example, if there are a slew of shares added to the market through IPOs but not a lot of new money coming along with them, stocks will head lower, he continued. Buybacks help ease such a supply and demand problem, he said.