Invest in Stocks That Split

Invest in Stocks That Split
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Buying in Round Numbers

Certain types of investors like certain stocks and they like them at a certain price. If you have $5,000 to invest every quarter and you would like to buy 100 shares you might decide to stock with your regular $50 a share stock. If the stock climbs to $85 a share and then splits you can get your 100 shares for $4,250 and will be happy. There may well be people for whom this approach works.

Evidence of Success

Growth stocks run the risk of being overpriced. If Microsoft had never split it would be trading for tens of thousands of dollars a share today. Splitting the stock keeps the price where an investor can pick of a few shares within his price range. And, if a company splits their shares every few years it is because they are growing. Stock splits over time are evidence of success. NASDAQ talks about how to identify growth stocks.

Growth and Value

The Motley Fool asks if a growth stock can be a value stock.

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