After all, they make expensive, sought after stocks far cheaper for retail investors that 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 are 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 upcoming stock splits with:
Company: Nvidia (SYM: NVDA)
Company: Chipotle Mexican Grill (SYM: CMG)
Company: Cintas Corp. (SYM: CTAS)
Since testing a low of about $342 in 2022, CTAS soared to a recent high of $682.81. It’s now expected to split its shares 4:1. As noted by the company, “its Board of Directors approved a four-for-one split of its common stock. Shareholders of record, as of September 4, 2024, will receive three additional shares for each share held, which will be distributed after market close on September 11, 2024. Cintas’ shares are expected to begin trading on a post-split basis at the market open on Thursday, September 12, 2024. Prior to this announcement, Cintas’ most recent stock split was in 2000.”
