Thursday, March 02, 2006

stock splits

A stock split is generally regarded as a non-event since it creates no additional value for the shareholder.

However I received a blurb in my email from 2 for 1: the stock split newsletter saying stocks that have split actually outperform the market (and they will tell you which ones to buy for a modest fee). He cites a study conducted by Dr. David Ikenberry of Rice University which showed that a company's performance after a stock split beat market performance by up to 12% for up to three years after the split was announced.

Newsletter editor Neil Macneale explained his strategy in a Forbes interview.

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