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10 Stocks That May Be Splitting Soon

In this article, we will discuss the 10 stocks that may be splitting soon. If you want to explore similar stocks, you can also take a look at 5 Stocks That May Be Splitting Soon.

A stock split is when a company increases its number of outstanding shares in an effort to boost its stock’s liquidity and make it more affordable for investors. The underlying value of the business does not change, since the price of each share decreases in proportion to the increase in the number of outstanding shares. For example, if a company has 100,000 shares outstanding at a price of $10 per share, its market cap would be $1 million. If the company decides to go for a 2-for-1 stock split, the company will then have 200,000 shares outstanding at a price of $5 per share, and the market cap will stay the same at $1 million. Stock splits are usually carried out on a regular basis, such as every quarter or every year. They are often seen as a sign of a company’s health and growth potential. Stock splits can also be beneficial for companies as they can repurchase their shares at a lower price. Typically, stock splits are indicative of a company’s health and growth and are also indicative of management’s confidence in their business.

Mega Caps That Split In 2022

Stock splits have been all the rage in 2022, with mega caps like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Tesla, Inc. (NASDAQ:TSLA) leading the way. On February 1, Alphabet Inc. (NASDAQ:GOOG) announced a 20-for-1 stock split, under which shareholders of record on July 1, received 19 additional shares of Alphabet Inc. (NASDAQ:GOOG) on July 15, 2022. On March 9, Amazon.com, Inc. (NASDAQ:AMZN) declared a 20-for-1 stock split for shareholders of record on May 27, payable on June 3, 2022. As of November 9, Amazon.com, Inc. (NASDAQ:AMZN) is trading at $88 per share. On August 4, Tesla, Inc. (NASDAQ:TSLA) announced that its board of directors has approved a 3-for-1 stock split for investors of record on August 17, 2022. Tesla, Inc. (NASDAQ:TSLA) shareholders received 2 additional shares per share on August 24, 2022.

A hawkish Fed is spooking investors away from the equities market, triggering major sell-offs. As of November 9, the S&P 500 has sunk 20% year to date, the Dow has lost 10% since the beginning of the year, and the Nasdaq is down more than 30% for the year. We have compiled a list of 10 stocks that may be splitting soon to spark up investor interest and make shares more accessible to small investors. Some of the potential companies that may follow suit and announce a stock split soon include Lam Research Corporation (NASDAQ:LRCX), Booking Holdings Inc. (NASDAQ:BKNG), and Thermo Fisher Scientific Inc. (NYSE:TMO). These stocks, among others, are discussed in detail in the article below.

Our Methodology

To determine the 10 stocks that may be splitting soon, we did our research to identify companies that have solid track records of profitability and successful execution. We considered business fundamentals and various financial metrics to identify potential candidates for stock splits. Along with each stock, we have mentioned the hedge fund sentiment, stock split history, and analyst ratings. Please keep in mind that this is an opinion article and the companies presented in this article may not be splitting anytime soon. Here are the 10 stocks that we believe may be splitting soon, ranked according to their popularity among elite hedge funds from least popular to most popular.

10 Stocks That May Be Splitting Soon

10. Seaboard Corporation (NYSE:SEB)

Number of Hedge Fund Holders: 14

Seaboard Corporation (NYSE:SEB) operates as an agribusiness and transportation company worldwide. The company has six business divisions: Pork, Commodity Trading & Milling (CT&M), Marine, Sugar & Alcohol, Power, and Turkey. As of November 9, Seaboard Corporation (NYSE:SEB) is trading at $3,890 a share and at a PE multiple of 9x. The company has a long history of success and growth and has never split its stock. Seaboard Corporation (NYSE:SEB) is ranked among the stocks that may be splitting soon.

On November 1, Seaboard Corporation (NYSE:SEB) posted earnings for the fiscal third quarter of 2022. The company reported earnings per share of $125.78 and generated a revenue of $2.9 billion, up 27.2% year over year. The company also announced that its board of directors has approved a quarterly cash dividend of $2.25 per common share, which is payable on November 21 to stockholders of record at the close of business on November 11.

At the close of Q2 2022, 14 hedge funds held stakes in Seaboard Corporation (NYSE:SEB). The collective value of these stakes amounted to $99.6 million. This is compared to 15 positions in the preceding quarter with stakes worth $96.4 million. As of June 30, Kahn Brothers is the top investor in Seaboard Corporation (NYSE:SEB) and has a position worth $38.4 million.

Other viable candidates that have a stock split long overdue include Lam Research Corporation (NASDAQ:LRCX), Booking Holdings Inc. (NASDAQ:BKNG), and Thermo Fisher Scientific Inc. (NYSE:TMO).

9. W.W. Grainger, Inc. (NYSE:GWW)

Number of Hedge Fund Holders: 30

W.W. Grainger, Inc. (NYSE:GWW) is a leading global distributor of maintenance, repair, and operating products The company operates through two segments: High-Touch Solutions N.A. and Endless Assortment. W.W. Grainger, Inc. (NYSE:GWW) has had 3 splits in history, with the most recent one being a 2-for-1 split in June 1998. The company’s share price has soared from roughly $50 at the time of the split to $595, as of November 9. W.W. Grainger, Inc. (NYSE:GWW) is ranked among the stocks that may split soon.

On October 28, W.W. Grainger, Inc. (NYSE:GWW) announced earnings for the fiscal third quarter of 2022. The company reported earnings per share of $8.27 and outperformed expectations by $1.02. The company generated a revenue of $3.94 billion, up 16.90% year over year, and beat estimates by $73.57 million. Shortly after the company’s earnings release, Baird analyst David Manthey raised his price target on W.W. Grainger, Inc. (NYSE:GWW) to $640 from $590 and maintained an Outperform rating on the shares.

At the end of Q2 2022, W.W. Grainger, Inc. (NYSE:GWW) was spotted on 30 investors’ portfolios that held collective stakes of $304.6 million in the company. As of June 30, Citadel Investment Group is the top investor in W.W. Grainger, Inc. (NYSE:GWW) and has a position worth $66.2 million in the company.

8. NVR, Inc. (NYSE:NVR)

Number of Hedge Fund Holders: 32

NVR, Inc. (NYSE:NVR) is a major homebuilder in the United States. The company has two business divisions: Homebuilding and Mortgage Banking. NVR, Inc. (NYSE:NVR) is profitable and is also efficient at making profits for shareholders. The company has a trailing twelve-month operating margin of 21.34% and an ROE of 52.62%. The company has never split its stock since going public, and its stock split may be over due. As of November 9, NVR, Inc. (NYSE:NVR) is trading at a PE multiple of 9x and has a share price of $4,100. The stock ranks among the stocks that may be splitting soon.

On October 25, NVR, Inc. (NYSE:NVR) announced earnings for the fiscal third quarter of 2022. The company reported an EPS of $118.51 and generated a revenue of $2.74 billion, up 17.24% year over year, and ahead of Wall Street estimates by $167.85 million. This October, BofA analyst Rafe Jadrosich resumed coverage of NVR, Inc. (NYSE:NVR) with a Buy rating and a $4,900 price target.

At the close of Q2 2022, 32 hedge funds were long NVR, Inc. (NYSE:NVR) and disclosed stakes of $434 million in the company. As of September 30, Diamond Hill Capital is the top investor in NVR, Inc. (NYSE:NVR) and has stakes worth $495 million in the company.

Here is what Ensemble Capital Management had to say about NVR, Inc. (NYSE:NVR) in its third-quarter 2022 investor letter:

NVR, Inc. (NYSE:NVR): The US housing market has been unstable so far this year, as rising mortgage rates and higher housing prices have rapidly reduced affordability. Fortunately for existing homeowners, most of whom own their houses outright or have locked in low, fixed mortgage rates, rising rates have not directly impacted their finances unless they have an outstanding variable-rate home equity line of credit.

Homebuilders, who rely on incremental demand for housing, have seen demand dry up in response to declining affordability. Single-family home building permits have plummeted in recent months back to pre-pandemic levels.

That’s the bad news. On the bright side, the building materials supply chain, which delayed construction and increased the cost to build a home, is rapidly improving. This bodes well for homebuilders like NVR with a track record of cost discipline. In other words, even if NVR’s average selling price declines, it can maintain attractive gross margins if they simultaneously control costs…” (Click here to read the full text)

7. Mettler-Toledo International Inc. (NYSE:MTD)

Number of Hedge Fund Holders: 39

Mettler-Toledo International Inc. (NYSE:MTD) is a leading provider of precision instruments and services worldwide. The company benefits from a strong competitive position in the marketplace, with a wide range of products and services that address the needs of customers in a variety of industries. Mettler-Toledo International Inc. (NYSE:MTD) has a long history of innovation and customer focus, which has resulted in strong relationships with its customer base. The company has a strong financial position, with a history of consistent profitability and cash flow generation. The company has a trailing twelve-month operating margin of 28.28% and free cash flows of $691.7 million. Mettler-Toledo International Inc. (NYSE:MTD) is another company whose stock split may be long overdue, and is trading at $1,331 a share, as of November 9. Mettler-Toledo International Inc. (NYSE:MTD) ranks among the stocks that may split soon.

On November 3, Mettler-Toledo International Inc. (NYSE:MTD) posted earnings for the fiscal third quarter of 2022. The company reported earnings per share of $10.18 and beat estimates by $0.35. The company generated a revenue of $985.85 million and outperformed Wall Street consensus by $12.17 million. After the company posted a strong print for Q3, Goldman Sachs analyst Matthew Sykes upgraded Mettler-Toledo International Inc. (NYSE:MTD) to Neutral from Sell and raised his price target on the shares to $1,355 from $1,120.

At the end of Q2 2022, 39 hedge funds were bullish on Mettler-Toledo International Inc. (NYSE:MTD) and disclosed stakes of $1.51 billion in the company. This is compared to 36 positions in the preceding quarter with stakes worth $1.50 billion. As of June 30, Fundsmith LLP is the largest shareholder in the company and has disclosed a position worth $620.85 million.

Here is what Baron Funds had to say about Mettler-Toledo International Inc. (NYSE:MTD) in its third-quarter 2022 investor letter:

Mettler-Toledo International Inc. (NYSE:MTD) is a leading provider of weighing instruments for use in laboratory, industrial, and food retailing applications. Mettler detracted from performance as the stock fell due to investor concerns about a possible global recession and the impact of foreign currency fluctuations on the company’s earnings. We believe that Mettler’s business has historically proved resilient in the face of macroeconomic challenges, and we expect Mettler will continue to compound its earnings at mid-teens or better growth rates over the long term.”

6. O’Reilly Automotive, Inc. (NASDAQ:ORLY)

Number of Hedge Fund Holders: 41

O’Reilly Automotive, Inc. (NASDAQ:ORLY) is a leading retailer in the auto parts and accessories industry with over 5,900 stores in 47 states. The company has a strong history of growth and profitability and is well-positioned to continue its growth in the future. The company has a diversified product mix, and a strong brand name, and is a leading player in the growing auto parts market. O’Reilly Automotive, Inc. (NASDAQ:ORLY) has split its stock 3 times in its history of being a public company. The most recent split was a 2-for-1 stock split in June 2005, and its share price has skyrocketed from roughly $30 at the time of the split to $829.40, as of November 9. O’Reilly Automotive, Inc. (NASDAQ:ORLY) is ranked among the stocks that may be splitting soon.

This October, UBS analyst Michael Lasser raised his price target on O’Reilly Automotive, Inc. (NASDAQ:ORLY) to $940 from $855 and maintained a Buy rating on the shares. On October 28, Truist analyst Scot Ciccarelli raised his price target on O’Reilly Automotive, Inc. (NASDAQ:ORLY) to $892 from $765 and reiterated a Buy rating on the shares.

At the end of Q2 2022, 41 hedge funds were long O’Reilly Automotive, Inc. (NASDAQ:ORLY) and held stakes worth $2.40 billion in the company. As of June 30, Akre Capital Management is the largest investor in the company and has a position worth $992.8 million.

In addition to O’Reilly Automotive, Inc. (NASDAQ:ORLY), some of the potential stocks that may announce a stock split soon include Lam Research Corporation (NASDAQ:LRCX), Booking Holdings Inc. (NASDAQ:BKNG), and Thermo Fisher Scientific Inc. (NYSE:TMO).

Click to continue reading and see 5 Stocks That May Be Splitting Soon.

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Disclosure: None. 10 Stocks That May Be Splitting Soon is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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Should I put my money in Artificial Intelligence?

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Click to continue reading…