Don’t Forget About this Stock Split
Stock splits make expensive, sought-after stocks far cheaper for retail investors who may have missed out on the prior run. In addition, according to Bank of America analysts, stock splits are typically bullish for companies that enact them. On average, returns one-year post-split is 25%, compared to around 12% for the broader market, as noted by Investing.com.
“Splits seem to be bullish across market regimes, something management teams might consider if shares look too expensive for buybacks,” they added.
In addition, stock splits are also a sign the company is bullish on its future, believing its stock will soar again post-split.
That being said, investors may want to take advantage of the upcoming stock split with Chipotle Mexican Grill (CMG), which just split 50:1. Last trading just under $63, it could push aggressively higher again with strong growth and earnings.
In fact, with strong growth ahead, CMG could easily rally back to $3,200 again down the road.
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Written by Ian Cooper