In this piece, we will take a look at 11 stocks that might be splitting soon. If you want to skip our overview of what a stock split is and some recent stock market news, then you can take a look at the 5 Stocks That May Be Splitting Soon.
When it comes to keeping investors happy, publicly traded stock managers have several options at their disposal. When it comes to investor expectations, the management strategy depends on the kind of stock. For value stocks, i.e. companies that seek to deliver share price and business stability by targeting well established markets, investors typically hope for dividends and the ability to hedge losses and growth drops during turbulence. Similarly, for growth stocks, the primary driver is, well, growth - both for the earnings per share and the share price.
One way in which a company can keep its share price stable over the long run and insulate it against sentiment driven volatility is by doing a stock split. A split, if you're unaware, is when a firm divides its shares into more shares. So a one for two split simply means that one share trading for $10 is now worth two shares worth $5 each and so on. The primary motivation for a stock split is management's aim to make the shares more tradeable, particularly for retail investors since a stock split makes the shares more affordable. Additionally, a stock split also increases liquidity, which makes for an overall healthier trading environment.
Stock splits are quite common in the stock market and nearly every mega cap stock available for trading today has used them in its history. For instance, one of the most valuable companies in the world, the Cupertino, California consumer technology giant Apple Inc. (NASDAQ:AAPL) has gone through five stock splits in its history. The most recent Apple stock split came in 2020 as the world was reeling from the impact of the coronavirus pandemic. Apple split a single share into four back then, and had the split not occurred and the shares had continued to appreciate by a similar percentage from then until now, then a single Apple share would currently be worth $744 right now. Apple's previous stock split before the 2020 split was a whopping 7 for 1 split in 2014, and cumulatively, as of February 2024, its shares have been divided into 168 components.
Building on this, 2022 has been a busy year when it comes to mega cap stocks and stock splits. Big ticket names such as Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Tesla, Inc. (NASDAQ:TSLA) have all undergone stock splits which came right when the Federal Reserve was making preparations for lift off when it came to jacking up interest rates. Alphabet and Amazon both announced massive 20 for 1 stock splits in 2022, which was understandable since their shares were trading north of as much as $1,000 by then. When the Federal Reserve raises interest rates, market liquidity dries up and investors, both retail and institutional, find it hard to acquire capital to pile into stocks. Therefore, a stock split, which reduces the share price, encourages trading as a unit of a stock is now worth less in absolute dollar terms and can be bought relatively easily. Additionally, record share price gains during the coronavirus pandemic that saw investors flock to technology stocks due to their potential to capitalize from lock downs induced trend also pushed their share prices quite high and management thought it was best to bring it back to comfortable levels by splitting the shares.
Fast forwarding to 2024, the year has borne some fruit when it comes to big companies and stock splits. The start of the year has seen the world's largest brick and mortar retailer Walmart Inc. (NYSE:WMT) announce a stock split. Walmart's shares have reclaimed their all time high levels in 2024 after the firm beat analyst Q4 2023 earnings per share estimates and kept the foot on the pedal when it comes to growth by announcing new stores in its biggest market, the U.S. The firm also announced a three for one stock split that is set to go into effect into February 2024. At the heart of the decision is associate well being, argues Walmart, with its official release sharing that the decision is motivated by ensuring an affordable entry level share price for its Associate Stock Purchase Plan.
With these details in mind, let's take a look at some stocks that are splitting soon. Some notable names are Booking Holdings Inc. (NASDAQ:BKNG), Walmart Inc. (NYSE:WMT), and Broadcom Inc. (NASDAQ:AVGO).
To make our list of the stocks that are splitting soon, we first made a list of all stocks that are going to split in February 2024, stocks trading above $1,000 and haven't split in decades, and large cap stocks with more than 100% share price gain over the past year. They were ranked by their market capitalization and the top stocks were chosen.
For these stocks that may be splitting soon, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
The Cooper Companies, Inc. (NASDAQ:COO) is a specialized healthcare company that makes and sells a wide variety of contact lenses. The firm has officially announced a four for one stock split that is slated to go live on the market on the 20th of February.
As Q3 2023 ended, 34 out of the 910 hedge funds part of Insider Monkey's database had bought and owned The Cooper Companies, Inc. (NASDAQ:COO)'s shares. David Blood and Al Gore's Generation Investment Management was the firm's biggest hedge fund shareholder through its $360 million stake.
The Cooper Companies, Inc. (NASDAQ:COO) meets Walmart Inc. (NYSE:WMT), Booking Holdings Inc. (NASDAQ:BKNG), and Broadcom Inc. (NASDAQ:AVGO) in our list of stocks that might split soon.
Builders FirstSource, Inc. (NASDAQ:BLDR) is a well known American company that sells building supplies and other associated products. Its shares have gained more than 120% over the past year, and a multi billion dollar market capitalization makes the firm a great target of a stock split.
During last year's third quarter, 53 out of the 910 hedge funds covered by Insider Monkey's research had invested in the company. Builders FirstSource, Inc. (NASDAQ:BLDR)'s largest hedge fund investor is Cliff Asness's AQR Capital Management due to its $195 million investment.
The shares of Deckers Outdoor Corporation (NYSE:DECK) are quite pricey, with a current going tag of $882. This is after a 112% 12 month share price gain that has come alongside a consecutive four quarter earnings EPS beat by the firm.
Insider Monkey's September quarter of 2023 survey covering 910 hedge funds revealed that 42 were the firm's shareholders. Robert Pitts's Steadfast Capital Management was the biggest shareholder, owning 342,753 shares that are worth $176 million.
Super Micro Computer, Inc. (NASDAQ:SMCI) is a semiconductor company headquartered in San Jose, California. The stock has soared by a stunning 596% over the past year, making a $579 share price a bit high when compared to a year ago share price of $83. Ripe for a split? You decide.
Insider Monkey dug through 910 hedge fund portfolios for last year's third quarter and found that 41 had bought and owned Super Micro Computer, Inc. (NASDAQ:SMCI)'s shares. Richard Driehaus's Driehaus Capital was the firm's biggest investor through its $127 million stake.
Chipotle Mexican Grill, Inc. (NYSE:CMG) is a restaurant chain operating out of Newport Beach, California. Its shares are some of the most expensive ones on our list, with one share going for a whopping $2,482. Coupled with the fact that Chipotle Mexican Grill, Inc. (NYSE:CMG) has never had a stock split in history, perhaps 2024 will see the shares cost less than a MacBook.
For their third quarter of 2023 shareholdings, 57 out of the 910 hedge funds profiled by Insider Monkey had invested in the firm. Bill Ackman's Pershing Square is Chipotle Mexican Grill, Inc. (NYSE:CMG)'s largest shareholder as it owns $1.7 billion worth of shares.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a software company that provides cybersecurity products and services. As firms continue to shift their workloads to the cloud, CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s shares have soared by 177% in the past 12 months. They are also rated Strong Buy by analysts.
69 out of the 910 hedge funds part of Insider Monkey's Q3 2023 research were CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s shareholders. Jim Simons' Renaissance Technologies was the biggest investor since it had piled in $279 million into the stock.
Booking Holdings Inc. (NASDAQ:BKNG), CrowdStrike Holdings, Inc. (NASDAQ:CRWD) , Walmart Inc. (NYSE:WMT), and Broadcom Inc. (NASDAQ:AVGO) are some top stocks ripe for a split.
