Companies that have executed substantial share buyback programs have managed to perform considerably better than their peers in the U.S. market over the past five years. The Nasdaq BuyBack Achievers Index (Index: ^DRB) tracks the performance of U.S. companies that have reduced their outstanding issued shares by at least 5% over the previous 12 months. This index has outperformed the broader market by more than 6% per year over the past 10 years and by 5% every year for the past five years. Warren Buffett is a strong supporter of companies that utilise excess company capital to buy its own stock. He explained in his 2011 letter to Berkshire Hathaway shareholders that buying up a company's own undervalued stock is a sure way to make money for shareholders. Share buybacks provide an alternative and more flexible method for companies to return excess, low-yielding capital to shareholders.