Is It Too Late to Buy These 2 Stock-Split Stocks?
Stock splits don't actually do anything to change the fundamentals of a Stock, but they do get investors excited in a way that few other moves do.
There's no single reason why companies split their stocks. Often, it's because the price has hit some milestone, and the company believes a single share is too expensive. Other times, a company may do it to make individual shares more affordable to retail investors, or because the management team thinks it acts as a buy signal by resetting the share price.
Though the split has no effect on the value of a stock -- it's like splitting a pie into more pieces -- there is some evidence that a stock split can lead to outperformance the following year. This is likely a consequence of the momentum the stock had going into the split, and possibly some market psychology since investors will buy the stock-split stock if they believe the split will make it go higher.
Source Fool.com
