Stock-Split Watch: Is ASML Next?

Stock splits have swept the market in recent years as nearly every "Magnificent Seven" Stock has split its shares, as well as a number of other high-profile stocks like Shopify and Walmart.

Investors often speculate about what could be the next stock to split its shares. Stock splits don't add value or change the fundamentals of a stock. They essentially divide the stock pie into more pieces, meaning individual shareholders still own the same stake they did before. There is some evidence that stocks tend to outperform after a stock split, according to research from Bank of America, though it's not fully clear why.

This could be because companies can choose the timing of their stock splits and generally choose to do them from a position of strength when they expect the stock to keep climbing. It could also be because investors tend to respond positively to a stock split, seeing it as a signal to buy the stock.

Continue reading

Source Fool.com