He cites an example of WHSL which will forward split 3 for 1 on March 10th.
Ronjer, there are many schools of thought on this. It would be nice if others would join in and express their thoughts.
If your total equity value will not change after a split, this is a no brainer.
Decades back, I bought Raytheon stock knowing it was about to jump in price and a forward 3 for 1 split was about to happen. It split, ten or fifteen days later, my stock was back at the price before the split, a 66.6 percent gain.
That happening is rare.
Your stock is eleven bucks per doe, err, eleven dollars per share. This is way out of my league; I never look at stocks in that price range.
This is important. Are fundamentals strong enough for a continued rise in price? Will a lower price attract more investors?
Often a lower price will attract more investors leading you to a better net gain after your split.
Offhand, and I have not researched your stock at all, I would say for a stock in this price range, showing some gains, probably won't make any difference or will cause a mild benefit.
I am always tempted to buy before a forward split. This is just an opinion.
What do you think?
I encourage others to join this thread as this is a topic not often discussed and your opinions are important.
posted
HMMMMMMM-- this looks like fun--do they give dividends?---if yes--how are they handling the div/share--this often gives a clue as to whether its a good split or a bad split. insider holdings need to be examined too--are the BIG holders getting a gift?--why are they saying they want to split? is someone looking to double an option play?
i usually like forward splits if the company is in black ink---reverse splits IF the company is moving toward black ink.
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First of all, let me thank you for your time on this topic.
I do seem to be having trouble digging up info on this stock for some reason. Their financials are nothing to write home about, and they do seem to have some 'stock options for financing' deal going on per SEC EDGAR website. As I am just learning the ropes, I don't fully comprehend the details. It does seem that they are changing their business direction as they were a natural resources sector company and they are pending a name change to "Global Electric" which makes me wonder if that could be the reason for the lack of info. The reason I put this question up is because I am trying to polish up my DD skills and this seemed to challenge me. I've read their PR's and checked into what they offer, who they've brought in, who is interested in them, and it all is pretty good (i.e. Govt contracts, electric vehicles and houses, recreational vehicles) as well as a 250ih percent gain over the last 3 months. Until this stock, all of my DD made sense. OOOOOH how it mocks me, LOL It sure is fun though......
posted
I'm generally in favor of forward splits. Most of the ones I've been involved with have done well. I have had a few exceptions to this though.
My experience is that forward splits help increase the liquidity of a stock (higher daily volume), as well as making it more affordable for the smaller investor. They do seem to have a tendancy to drift up to their Pre-Split prices as well
Reverse Splits = Kiss of Death.
I've yet to experience any positive results from an R/S - and I've had many. I here news about an R/S for a stock and I'm outta there in heartbeat - haven't been wrong on that account yet.
For Pennies, stay away from R/S's. It's just a way for a Company to steal your money, and I'll give some examples if you wish.
posted
Ronjer, as you can see, those who have responded so far are favorable about a forward split.
Yes, reverse split is really bad news.
All three of us are pointing to fundamentals rather than technicals. If your company is in the black ink (profitable) your risks are very low and potential for better gains, a bit better.
Wanderer mentions volume which is important for price gains. Most often, not always, but most often higher volume leads to increasing prices. A forward split produces prices which are more attractive to investors who will hesitate at higher prices. New investors bring in more volume as Wanderer writes.
Black ink, steady product sales, firm future prospects of sales, no diultion in the making, those are some of the fundamentals you want to find for this company.
You mentioned something which might be a little bit of a damper. With this company having already experienced significant growth, future growth rate should be slower, meaning a split jump could take longer than you like.
I believe you will discover most feel comfortable about a forward split.
posted
I'd like to thank the Academy, and also a special thanks to Purl Gurl, Glassman, and Wanderer.....Wouldn't stock oscars be cool? Naaaaaw, I'll just go with profits(I hope). Again, thanks y'all Ronjer
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