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1 Beaten-Down Stock-Split Company to Avoid in 2025 and Beyond
The Motley Fool· 2025-05-09 08:30
Core Viewpoint - Stock splits can indicate a company's performance, with forward splits often seen positively, while reverse splits may signal struggles, as exemplified by Tilray Brands [1][2][4]. Group 1: Stock Splits - A forward stock split increases the number of shares for each investor, often indicating expected strong performance and making shares more affordable [2]. - A reverse stock split reduces the number of shares and increases the stock price proportionately, often used to avoid delisting from major exchanges [2][3]. Group 2: Tilray's Performance - Tilray has faced significant challenges, with its share price dropping below $1, currently at approximately $0.43, indicating a long-term downward trend [4]. - The company's financial results are disappointing, with revenue growth largely driven by acquisitions and consistent unprofitability [4][6]. - The legal landscape for cannabis remains difficult, with federal illegality in the U.S. and regulatory barriers in Canada hindering growth [6]. Group 3: Reverse Stock Split Proposal - Tilray announced a special stockholders' meeting to vote on a reverse stock split proposal, which is likely to be approved given the company's current situation [7]. - A reverse stock split would prevent delisting from Nasdaq but does not address the underlying business challenges [8]. Group 4: Future Prospects - Tilray has reduced its focus on cannabis and is now a leading craft brewer in the U.S., hoping for future federal legalization of cannabis [8]. - CEO Irwin Simon anticipates potential legalization during President Trump's second term, which could position Tilray favorably in the cannabis-infused drinks market [9]. - However, uncertainties remain regarding the timeline and specifics of legalization, which could limit market potential [9][10]. Group 5: Investment Outlook - Given the ongoing challenges and lack of attractive business prospects, Tilray is not considered an appealing investment opportunity [10].
Wall Street's Newest Stock-Split Stock -- Which Has Gained 343% in 5 Years -- Is Set to Make History
The Motley Fool· 2025-05-09 07:06
Core Viewpoint - The article discusses the trend of stock splits on Wall Street, highlighting their role in the current bull market and the appeal they hold for investors, particularly in the context of companies that are performing well and seeking to attract everyday investors [1][2][3]. Stock Split Dynamics - Stock splits are cosmetic adjustments that do not affect a company's market capitalization or operational performance [3]. - There are two types of stock splits: forward splits, which lower share prices to make them more accessible, and reverse splits, which are typically used by struggling companies to avoid delisting [4][5]. Performance of Companies with Forward Splits - Companies that announce forward stock splits tend to outperform the market, with an average annual return of 25.4% in the year following the announcement, compared to the S&P 500's 11.9% [7]. - High-profile companies like Nvidia, Broadcom, and Walmart completed forward splits in 2024, indicating a trend among brand-name businesses to attract everyday investors [8]. Recent Stock Split Announcements - O'Reilly Automotive announced a 15-for-1 forward split, effective June 9, 2025, which reflects its strong performance in the auto parts sector as consumers keep their vehicles longer [9][10]. - Fastenal approved a 2-for-1 forward split, marking its ninth split since going public in 1987, with a stock price increase of nearly 124,000% since its debut [12][13]. Interactive Brokers Group's Historic Split - Interactive Brokers Group announced a 4-for-1 forward split, the first in its history, following a 343% increase in stock price over the past five years, aimed at making stock ownership more accessible [15][16]. - The company has seen significant growth in customer accounts, equity, and trading activity, benefiting from favorable market conditions [19][21]. Market Context and Valuation - Despite strong performance metrics, Interactive Brokers' stock is considered expensive with a forward P/E ratio of nearly 23, representing a 14% premium over its five-year average [20]. - The company has experienced a 65% increase in customer accounts and a 67% surge in customer equity, indicating robust growth in its trading platform [21].
DeFi Development Corp. Announces Seven-For-One Stock Split
Globenewswire· 2025-05-07 20:01
BOCA RATON, FL, May 07, 2025 (GLOBE NEWSWIRE) -- DeFi Development Corp. (Nasdaq: DFDV) ("DeFi Dev Corp" or the "Company"), or formally known as Janover Inc. (Nasdaq: JNVR), the leading public- market vehicle for Solana ("SOL") accumulation, today announced that its Board of Directors has approved a 7- for-1 forward stock split of the Company's issued and outstanding common shares. The stock split will result in each shareholder of record as of the close of business on May 19, 2025, receiving six additional ...
Possible Stock Split? This Stock Has Surged 284% Since 2023 -- Here's Why You Shouldn't Wait to Buy It
The Motley Fool· 2025-05-04 08:00
Core Viewpoint - The stock of Netflix is expected to continue rising regardless of whether management announces a stock split this year, driven by strong fundamentals and growth prospects [1][4]. Company Performance - Netflix's stock has increased by 284% since the beginning of 2023, indicating strong market performance and investor interest [4]. - The company achieved a 31.7% operating margin last quarter, with expectations to exceed 33% in the upcoming quarter, reflecting operational efficiency and profitability [7]. - Free cash flow has significantly improved, with a record of $2.66 billion generated last quarter and a projected total of $8 billion for the year, primarily allocated for share repurchases [9][10]. Strategic Initiatives - Netflix's strategy focuses on maintaining a target operating margin while investing heavily in new content, which is expected to enhance earnings and free cash flow over time [6]. - The company plans to spend $18 billion on new content this year, which is anticipated to attract new subscribers and retain existing ones [12]. - Netflix has introduced a lower-priced ad-supported tier, which is expected to provide substantial revenue upside as the company gains control over its advertising technology [13][14]. Future Outlook - Management anticipates that advertising revenue will double by 2025 as part of a phased strategy to implement new initiatives, allowing for testing and refinement [15]. - Despite a high forward price-to-earnings ratio of 44, the long-term free cash flow generation is expected to increase, supported by share buybacks that will enhance earnings growth [16].
Wall Street's Newest Stock-Split Stock, Up More Than 127,100% Since Its IPO, Is Conducting Its 9th Split in 37 Years
The Motley Fool· 2025-04-30 07:51
Stock Split Overview - The market has seen a significant stock split announcement in 2025, with O'Reilly Automotive declaring a 15-for-1 forward split after a notable increase in its stock price since its last split in 2005 [1][11] - Stock splits, particularly forward splits, have been a key driver of market performance, contributing to record highs in major indices like the Dow Jones, S&P 500, and Nasdaq [2][9] Types of Stock Splits - There are two main types of stock splits: forward and reverse, with forward splits being more favorable among investors [5][6] - Forward stock splits aim to lower share prices to make them more accessible to retail investors, while reverse splits are often associated with companies facing operational challenges [6][7] Performance of Companies with Forward Splits - Companies that have executed forward stock splits have historically outperformed the S&P 500, with an average return of 25.4% in the 12 months following the announcement since 1980, compared to the S&P 500's 11.9% [9] - High-profile companies like Nvidia, Walmart, and Broadcom have recently completed forward splits, contributing to a wave of stock-split enthusiasm [10] O'Reilly Automotive's Performance - O'Reilly Automotive's stock has increased by over 4,400% since its last split in 2005, driven by factors such as an aging vehicle fleet and a robust stock buyback program totaling nearly $26 billion since 2011 [11][12] - The company's strong performance is attributed to its strategic investments and operational efficiency [12] Fastenal's Stock Split and Growth - Fastenal has a history of stock splits, with its latest 2-for-1 split approved for May 21, reflecting its long-term success and operational investments [15][16] - The company has seen significant growth, with shares increasing by over 127,100% since its IPO, supported by a strong sales performance tied to manufacturing [16][17] Economic Factors and Future Outlook - Fastenal's contract sales have been rising, indicating strong demand from established customer relationships, which account for nearly three-quarters of total sales [18] - The company is investing in e-commerce and digital solutions to enhance customer service and streamline operations, which positions it well for future growth [19][20] - Despite a promising outlook, Fastenal faces challenges with a high valuation, as its forward P/E ratio of nearly 34 is above its historical average [21][22]
Wall Street's First High-Profile Stock Split of 2025 Has Been Announced -- and It's Not Meta Platforms, Netflix, or Costco!
The Motley Fool· 2025-04-28 07:51
Group 1: Stock Split Overview - The first major stock split of 2025 has been announced by O'Reilly Automotive, marking its first forward split in 20 years and fourth since going public in 1993 [17][18] - O'Reilly Automotive's board approved a 15-for-1 forward split, which is expected to take effect after trading closes on June 9, 2025 [18] - The stock split is aimed at making it easier for employees to purchase whole shares rather than fractions, enhancing participation in the employee stock purchase plan [19] Group 2: Company Performance - O'Reilly Automotive's stock has increased over 4,500% since its last stock split two decades ago, indicating strong company performance and effective management decisions [20] - The average age of vehicles on U.S. roads has risen to 12.6 years in 2024, which benefits auto parts suppliers like O'Reilly as consumers tend to keep older vehicles longer [21] - O'Reilly's hub-and-spoke distribution model, with 31 regional distribution centers and nearly 400 hub stores, ensures efficient supply and availability of over 153,000 stock keeping units (SKUs) [22] Group 3: Share Repurchase Program - O'Reilly Automotive has executed a significant share repurchase program, buying back 96.5 million shares for a total investment of $25.94 billion, resulting in a 59.4% reduction in outstanding shares [23] - The reduction in share count due to buybacks is expected to positively impact earnings per share (EPS), making the stock more attractive to investors [23] Group 4: Market Resilience - The demand for auto parts is considered relatively recession-resistant, suggesting that O'Reilly Automotive's stock may continue to rise in the long term [24]
Will Netflix Announce a Stock Split on Thursday?
The Motley Fool· 2025-04-16 15:55
Core Viewpoint - Netflix is expected to report strong first-quarter earnings, which could lead to discussions about a potential stock split, marking the first in nearly a decade [2][3][7]. Group 1: Earnings Expectations - Netflix's first-quarter revenue is projected to rise by 11% to $10.4 billion, with earnings expected to reach $5.58 per share according to the company's guidance [7]. - Analysts are forecasting a profit of $5.66 per share and revenue of $10.5 billion, indicating a positive outlook as Netflix has consistently beaten earnings estimates in previous reports [8]. Group 2: Stock Split Considerations - Netflix has only executed two stock splits in its 23 years of public trading, with the last being a 7-for-1 split in 2015 [3][4]. - The current stock price is significantly higher than during previous splits, and there is less pressure to maintain a lower price point [4]. - A stock split could enhance accessibility for individual investors and potentially increase trading activity, especially as Netflix approaches the $1,000 mark [9]. Group 3: Market Context - The tech industry has seen several major companies declare stock splits in recent years, suggesting a shift in market sentiment regarding high stock prices [9]. - Netflix's current stock price could hinder its inclusion in the Dow 30 index, as it would disproportionately affect the index due to its price-weighted nature [9].