Some Major Stocks Are Splitting: Here's When You're Most Likely to Benefit

There's one particular list that's star-studded these days. I'm talking about the list of companies splitting their stocks. E-commerce giant Amazon (NASDAQ: AMZN) completed its operation last month, Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is finishing up its split right now, and Tesla (NASDAQ: TSLA) plans to ask for approval of its proposed split during the shareholder meeting next month.

The big question in recent months has been whether it's a better idea to buy shares of these companies ahead of their stock splits or after they open at the split-adjusted price. Will gains happen leading up to the event or after? But both of these times may not be when you'll benefit most.

First, a quick look at the logic behind a stock split. These operations are often signs that a company is doing well -- and future prospects are bright. Companies split their shares after the price has climbed considerably. For example, Amazon and Alphabet shares have climbed more than 100% over the past five years. They both surpassed $3,000 a share at their peaks.

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Source Fool.com