Walmart becomes the latest stock to split today, and these three rising stocks look poised to do their own splits
Before trading began on February 26th, Walmart implemented a forward-looking stock split, joining a select group of rising companies.
Three companies with strong performance, with abundant catalysts and high stock prices, may announce stock splits.
10 stocks we like better than Metaplatform
There are three candidates who should follow Walmart’s example and implement a forward stock split.
Today, the Dow Jones Industrial Average enters a new era. With the entry of online retailer Amazon and the departure of pharmacy chain Walgreens Boots, the nearly 128-year-old index is not only in its 52nd change, but also the Dow’s denominator (when converting stock prices into Dow Points) (Numbers that are useful for) are also changing. This change is being driven by his 3-for-1 stock split in Walmart (WMT 0.09%).
A stock split is an event in which a listed company can change its stock price and number of outstanding shares by the same amount. The important thing to note about stock splits is that they are merely cosmetic and have no effect on the company’s market capitalization or performance.
Forward stock splits make a company’s stock more affordable for everyday investors and are especially helpful for investors who cannot purchase fractional shares.
In plain terms, a reverse stock split tries to boost a company’s stock price and keep it listed on a big stock market. Walmart is now splitting its stocks on Wall Street, which means they’re dividing their company’s ownership into more parts.
Today, Monday, February 26th, Walmart implemented a 3-for-1 forward stock split that was first announced on January 30th. Walmart CEO and President Doug McMillan said the reason for the split was to encourage employees to join Walmart. Associate Stock Purchase Plan. Mr McMillan said:
Sam Walton thought it was crucial for the stock price to stay low enough so that all workers could buy complete shares instead of just parts. Given the company’s growth and future plans, he felt it was a good time to split the stock and encourage employees to participate in the coming years.
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Walmart has benefited greatly from above-average inflation over the past two years. Walmart’s deep pockets and ability to buy large quantities of goods give it cost and product variety advantages that big-box stores cannot match. Walmart continues to attract shoppers because consumers are looking for great deals.
Walmart joins a select group of less than a dozen well-known companies to implement forward stock splits starting in mid-2021. But it’s not the last widely held or well-known public company to announce a stock split. , Below are three outperforming stocks that are likely to follow in Walmart’s footsteps and become the next stock split stock.
Meta Platform
The first logical candidate to become Wall Street’s next stock split after Walmart is none other than social media company Meta Platform (META -0.43% ). Meta hasn’t split its stock since going public in 2012, and less than two weeks ago its stock price was nearly $490.
Meta’s long-term success depends on three factors.To start with, the company’s social media stuff is like nothing else out there. The company is the parent company of Facebook, the most visited social site in the world, along with Instagram, WhatsApp, Facebook Messenger, and Threads. Combined, Meta’s family of apps totaled just under 4 billion monthly active users in the quarter that ended in December. Reaching such a large audience is an advertiser’s dream, which is why meta often has a huge influence on ad pricing.
Second, investors are excited about the company’s potential beyond advertising, including augmented reality and virtual reality tools and a variety of artificial intelligence (AI) applications that provide a gateway to the metaverse. Even though advertising accounts for approximately 98% of Meta’s total sales, the growth potential and notable market for Metaverse and AI is tantalizing.
His third catalyst for Meta has always been its healthy balance sheet. For example, the company ended 2023 with $65.4 billion in cash, cash equivalents, and securities, and generated $71.1 billion in net cash from operating activities last year alone. Our ability to take risks in terms of innovation is unmatched by most other technology-driven companies.
Chipotle Mexican Grill
The second rising stock that appears ready for a stock split is fast-casual restaurant chain Chipotle Mexican Grill (CMG 0.74%). Since Chipotle started selling shares to the public in 2006 for $22 each, the price of its stock has risen dramatically to $2,725 per share around three weeks ago.The sharp rise in stock prices is certainly a deterrent for investors who cannot afford to buy fractional shares.
Chipotle’s secret to success has long revolved around the quality of its food and its innovation. The company relies on locally sourced food and vegetables and is committed to using only responsibly sourced meat. Chipotle executives have found that consumers are willing to pay more if they are offered healthier food options. As a result, Chipotle is not affected by inflationary pressures.
Apart from the above, the company has kept the menu very small, which he says has two benefits. First, the menu is small, which allows the staff to prepare meals efficiently and move through the lines quickly. Second, keeping your menu concise makes introducing new products more impactful.
However, it’s clear that coming up with new ideas is what’s really driving success nowadays. For example, in 2018, Chipotle made a special drive-through lane just for picking up orders made online. This makes ordering faster and helps the company work more efficiently. It’s why Chipotle keeps making a lot more money every year.
His third company, a high flyer poised to follow in Walmart’s footsteps and join the exclusive club of split-stock stocks, is semiconductor company Broadcom (AVGO -0.65%). He split his original Broadcom stock three times until Avago acquired Broadcom in 2016 and kept the company name. However, Avago did not implement a stock split. Earlier this month, investors lost up to $1,295 on a single Broadcom share.
Since the beginning of 2023, his Broadcom’s outstanding performance in a wide range of markets is associated with his AI revolution. In April, the company introduced Jericho3-AI, which is designed to power connectivity to up to 32,000 graphics processing units in high-computing data centers. Broadcom’s traditional steady growth has translated into impressive revenue growth as companies substantially build out AI-powered data centers to take advantage of AI solutions.
However, Broadcom still derives the majority of its revenue from wireless chips and accessories designed for next-generation smartphones. The transition to 5G has facilitated a steady replacement cycle for smartphones and other wireless devices, which has proven to be a boon to the company’s bottom line.
The second most important thing for Broadcom is that, unlike other tech companies that go through ups and downs, it likely has a lot of orders waiting to be fulfilled. In July 2022, Broadcom had $31 billion worth of orders waiting. The CEO, Hock Tan, hasn’t said anything new about the company’s backlog, but the increase in orders related to artificial intelligence shows that the company is doing well. Having a lot of orders waiting means the company can expect to make steady money year after year.