David Smith

"We strongly believe in the long-term outlook of our company and our business model and disagree with the market's current discounted view on broadcast," said Sinclair CEO David Smith in the company's announcement Friday. (Amy Davis / Baltimore Sun / January 3, 2014)

Sinclair Broadcast Group Inc. plans to buy back up to $100 million of its common shares.

"We strongly believe in the long-term outlook of our company and our business model and disagree with the market's current discounted view on broadcast," said Sinclair CEO David Smith in the company's announcement Friday.

The Hunt Valley TV station owner said it will buy back stock on the open market "from time to time."

Sinclair's stock price has dipped 20 percent since the start of the year, closing up more than $1 Friday at $28.47 per share.

The company's use of free cash flow to buy back stock will boost value for shareholders, Smith said. Companies typically buy back stock when they believe it is undervalued. Reducing the number of shares that are trading publicly can boost the stock price.

"We applaud [Sinclair's] commitment to returning capital and believe that a share repurchase is the most efficient method to do so given [Sinclair's] current trading prices," said Marci Ryvicker, senior analyst with Wells Fargo Securities, in a report.

Sinclair, which has been on a television station buying binge, will own, operate, program or provide sales services to 166 stations in 77 markets once all the announced transactions are completed.

lorraine.mirabella@baltsun.com