1 Stock-Split Stock to Buy Hand Over Fist in May and 1 to Avoid
Should you jump on the latest stock splits? Some make sense and others don't. Here's what you need to know about two recent stock split announcers.
The mere fact that a company recently executed a stock split isn't much of an investment thesis. The move neither creates nor destroys bottom-line profits or shareholder value -- it simply lowers the stock price by dividing the same business value into a larger number of equal slices.
That being said, stock splits often give the stock a short-lived price boost as the split attracts media attention -- and the decision can speak volumes about how the leadership team expects the stock to perform in the future.
So, stock splits don't really change my analysis of any given stock but they can draw attention to some surprisingly swift share price gains. Some are well-deserved, highlighting a solid investment idea. Other stock splits might be too hasty, setting buyers up for potential disappointment.
