3 Companies That Should Follow in Chipotle’s Stock Split Footsteps

InvestorPlace03-28

Not that they necessarily will, but some companies look ripe for stock splits. Costco (COST): Sales volume remains steady, but the company may decide that trading volume needs a boost. Broadcom (...

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href=https://investorplace.com/2024/03/stock-splits-anyone-3-stocks-that-could-follow-the-chipotle-split/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Not that they necessarily will, but some companies look ripe for stock splits. \nCostco (COST): Sales volume remains steady, but the company may decide that trading volume needs a boost. \nBroadcom (...</p>\n\n<a href=\"https://investorplace.com/2024/03/stock-splits-anyone-3-stocks-that-could-follow-the-chipotle-split/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"QQQ","symbol_name":"纳指100ETF","start_time":0,"source_url":"https://investorplace.com/2024/03/stock-splits-anyone-3-stocks-that-could-follow-the-chipotle-split/","article_id":"2422940742","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2422940742","pubTimestamp":1711567405,"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"The interest in the Chipotle stock split may prompt other companies to do the same, here are three companies that look ripe for stock splits","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"QQQ":"纳指100ETF","QLD":"纳指两倍做多ETF","PSQ":"纳指反向ETF","BKNG":"Booking Holdings","BK4551":"寇图资本持仓","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" 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may reward investors with a split of a much better kind. \n \n\n\n\n \n\nSource: iQoncept/ShutterStock.com\n\n\n\nHeading into 2024, many analysts believed Chipotle (NYSE:CMG) was on the verge of splitting its stock. But many weren’t prepared for the company’s 50-for-1 split, one of the recent most extensive stock splits.  \nStock splits are generally seen as being bullish signs for a stock. This is even though a split doesn’t change the company’s fundamentals. When a company splits its stock, the number of outstanding shares increases, and the stock goes down proportionately. For example, every CMG stock owner will receive 49 additional shares for every share they hold.  \nThe bullish feeling about stock splits is part of investor psychology. Some investors simply won’t buy a stock after it reaches a certain price, even when you can buy fractional shares. Knowing this, companies split their stock to make it more accessible to a broader range of investors.  \nHowever, making the stock accessible and attractive are two different things. The Chipotle split will likely go over very well because the company’s fundamentals look attractive. If it does, it may prompt other companies with lofty share prices to consider splitting their stock. Here are three stocks that make appealing candidates for stock splits.  \nCostco \nSource: ShutterstockCostco (NASDAQ:COST) reported its fourth quarter and full-year earnings in early March. Revenue and earnings were up year-over-year. The company’s guidance echoed some of the concerns other companies shared. Consumers continue to buy essentials but are cutting back on discretionary spending.  \nInvestors should expect more of the same in coming quarters. That performance alone isn’t sufficient for the company to split its stock. On the other hand, the stock is up nearly 50% in the last 12 months. That’s impressive growth and could be causing investors to stay away. Trading volume is down about 39% compared to the stock’s 20-year average. \nIf Costco does execute a stock split, its valuation won’t change. COST stock trades at around 47x forward earnings, and the high single-digit growth in twelve-month earnings may not be enough to increase the stock price. However, if Costco increases its membership fee, earnings could get a boost, driving COST stock up by 201% in the last five years or even higher. \nBroadcom \nSource: BroadcomAll eyes have been on Nvidia (NASDAQ:NVDA) in the chip sector, and not without reason. Just when attention in NVDA stock was cooling, the company announced a new GPU platform, Blackwell, at its recent developer conference. And realistically, NVDA stock is rumored in companies that may issue stock splits.  \nHowever, if you’re looking for a different way to play the chip sector – and possibly still get a stock split, consider Broadcom (NASDAQ:AVGO). The stock is one of the leaders in helping companies build their AI infrastructure.  \nAVGO stock is up more than 100% in the last year and institutional investors are showing heavy interest in AVGO stock. Having done it three times, Broadcom is not a newcomer to stock splits. Notably, the company hasn’t split its stock since Avago acquired it in 2016.  \nThe chip sector will likely continue to be red hot for several years. For companies thinking about splitting their stock, that’s something you look for. That way, the stock will move up from its split-adjusted price as the company grows revenue and earnings.  \nBooking Holdings \nSource: Denys Prykhodov / Shutterstock.comStock splits can be both positive and negative. Booking Holdings (NASDAQ:BKNG) instituted a 1-for-6 reverse stock split in 2003. That makes the company’s current situation even more remarkable, with a stock price of over $3,600.  \nBooking has become a one-stop shop for investors looking to scratch their travel itch. That itch is becoming more constant as the lines between work and leisure remain blurry. The company is adding AI capabilities, making the platform even more useful for consumers. \nLike the other stocks on this list, BKNG stock is up 111% in the last five years. One thing that would argue against a split is that the company is seeing increased trading volume, which suggests that investors, for now, believe there’s good value in the stock’s current P/E ratio of around 31x earnings. \nOn the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. \nChris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSubmit\n\n\n\n\n\n\n\nArticle printed from InvestorPlace Media, https://investorplace.com/2024/03/stock-splits-anyone-3-stocks-that-could-follow-the-chipotle-split/.\n©2024 InvestorPlace Media, LLC","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2422940742"}