Despite a tough market, Lowe’s (NYSE:LOW) continues to generate substantial cash flows.  The company has an efficient distribution platform and a good track record of cutting costs.

What to do with all that money?  Lowe’s wants to buy back $5 billion of its shares. That’s certainly a big number when you consider that the company’s market cap is $24 billion.  Yet in Monday’s trading, the shares are up only 1.2%. 

Why the muted response? The problem is that the buyback is really an admission that Lowe’s has few options.  Keep in mind that Home Depot (NYSE:HD

) continues to make inroads against the company. 

At the same time, there seems to be no end to the real estate depression.  If anything, it may get worse if the economy has a double-dip recession. 

In the latest quarter, Lowe’s posted a decline in same-store sales (the forecast was for a 2% increase), and it also cut full-year revenue guidance to 2% growth from 4%. 

The fact is that buybacks are often ineffectual. Wall Street wants to see real growth in earnings, not financial engineering.  Besides, Lowe’s buyback will be over a period of several years. 

For shareholders, there will likely be few positive catalysts for the company, and the best strategy is to avoid the stock for now.

Tom Taulli is the author of various books, including “All About Commodities.”  He does not own a position in any of the stocks named here.