3 Top Stocks That Look Able to Split

Stock splits attract quite a lot of attention amongst investors.

While they do not change the basics of a stock, they do act as a signal from management that it expects the stock to maintain moving higher. That is because stock splits represent milestones in a stock’s growth, they usually make the worth of a person share cheaper, making it more cost-effective for retail investors.

There’s also some evidence that stocks outperform after a stock split, which could also be attributable to the momentum from growth within the stock that led to the split and confidence from management that the stock will proceed to maneuver higher.

In case you’re on the lookout for the following stock-split stocks, listed here are three that could possibly be next.

Image source: Getty Images.

1. Booking Holdings

Booking Holdings (NASDAQ: BKNG) is the largest online travel agency on the planet, and it’s never had a stock split in its history, though it did do a reverse split in 2003 when it was on the point of bankruptcy after the dot-com bubble burst.

Since then, Booking shares have skyrocketed, and its share price is now approaching $4,000 a share, making it higher than some other U.S. stock aside from homebuilder NVR and Berkshire Hathaway Class A shares.

CEO Glenn Fogel recently tamped down expectations of a stock split as many other high-priced stocks have split their shares. In an interview with Barron’s, he responded to a matter a few prospective stock split, saying, “I do not think I would like that type of investor.”

Fogel’s not alone in that sentiment. Amazon founder Jeff Bezos also dismissed the concerns of short-term investors, insisting he was focused on the long run. Nonetheless, Amazon eventually split its shares after Bezos passed the torch to current CEO Andy Jassy.

Despite Fogel’s comment, a Booking stock split seems increasingly likely if the share price continues to rise.

2. AutoZone

AutoZone (NYSE: AZO) can also be one of the crucial expensive stocks in the marketplace on a person share price basis, and, like Booking, it has been a longtime outperformer.

AutoZone and rival O’Reilly Automotive have long delivered outsize returns by adding latest stores and serving a growing marketplace for aftermarket auto parts, especially as the typical age of a vehicle on the road is now greater than 12 years.

AutoZone stock now trades at greater than $3,000 a share. The corporate hasn’t split its stock since 1994 and since then, the stock is up by roughly 42,000%.

The auto parts stock has also gained steadily during the last five years during a volatile stock market, showing the strength of its recession-proof business model.

The corporate hasn’t announced any plans for a stock split, however it would make sense to do one, especially for the reason that stock seems well positioned to maintain gaining.

3. MercadoLibre

Finally, MercadoLibre (NASDAQ: MELI) also looks like an excellent candidate for a stock split. The Latin American e-commerce leader just crossed $2,000 a share, and like the opposite stock on the list, has been a consistent winner on the stock market.

MercadoLibre has grown over time by expanding its business right into a third-party marketplace, digital payments network, logistics service, and lending business.

While MercadoLibre seems to have been eligible for a stock split for some time based on its share price, which has been over $1,000 for many of the last five years, the corporate has never split its share price in its history, which works back to its IPO in 2007.

MercadoLibre hasn’t commented on a stock split, however it seems more likely to occur if the stock keeps gaining. The corporate remains to be growing rapidly and margins are expanding, setting the top off for more gains.

Do not be surprised to see MercadoLibre split its stock in the approaching years, if not sooner.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Jeremy Bowman has positions in Amazon and MercadoLibre. The Motley Idiot has positions in and recommends Amazon, Berkshire Hathaway, Booking Holdings, MercadoLibre, and NVR. The Motley Idiot has a disclosure policy.

Stock-Split Watch: 3 Top Stocks That Look Able to Split was originally published by The Motley Idiot

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