• First Cut
  • Recent Stock Splits

    Recent Stock Splits Splash image

    Stock splits are often announced with great fanfare and strong press coverage. A positive stock split partitions the outstanding shares of a corporation into a larger number of shares accompanied with a proportionate decrease in share price, without affecting the overall shareholders’ equity or the total market value.

    For example, if you own 100 shares of a company that trades at $90 a share and it declares a three-for-two stock split (a split ratio of 1.5), you will own a total of 150 shares at $60 a share after the split. If the company pays a dividend, the dividends paid per share will also fall proportionately.

    Why do companies split their shares—and why should you care? While stocks normally get a small boost from announcing a split, more importantly splits follow a period of strong price performance.

    Companies generally try to keep their stock price within a certain range. A stock split announcement represents a vote of confidence from the board of directors that acknowledges a company’s stock performance and signals the board feels that performance is going to continue.

    This issue’s First Cut seeks exchange-listed stocks that have undergone significant positive stock splits (a ratio of 1.5 or greater) in the second half of this year. The stocks are sorted by industry to highlight sector concentrations and patterns.

    The First Cut listing also includes: price performance over the last 13 and 52 weeks to judge short- and longer-term price strength; market cap as an indication of size; the price-earnings ratio to help assess how rich the stock is priced; and the historical earnings growth rate as a measure of the company performance that helped to drive the stock price up.

    Keep in mind that a stock split announcement is not a reason to buy a stock, but serves as a pointer to recently successful stocks that may be attractive if the fundamental factors that fueled the performance remain.

    The First Cut: Recent Stock Splits

    Company (Exchange: Ticker) 2006
    Split
    Date
    Split
    Factor
    Current
    Price
    (10/13/06)
    ($)
    Price Change Market
    Cap
    ($ Mil)
    P/E
    Ratio
    (X)
    3 Yr
    EPS
    Growth
    Rate
    (%)
    Industry
    (13 Wk)
    (%)
    (52 Wk)
    (%)
    PACCAR Inc. (M: PCAR) Aug 11 1.5 61.18 19 41 15,252.9 11.7 45.5 Auto & Truck Manufacturers
    Hansen Natural Corp. (M: HANS) Jul 10 4.0 32.79 (28) 198 2,978.9 36.8 153.3 Beverages (Non-Alcoholic)
    Corrections Corp. of America (N: CXW) Sep 14 1.5 45.58 29 75 2,754.1 30.4 (7.8) Business Services
    Geo Group, Inc., The (N: GEO) Oct 2 1.5 35.38 60 129 688.4 54.4 (11.9) Business Services
    H.B. Fuller Company (N: FUL) Aug 7 2.0 24.24 19 68 1,445.5 17.6 28.9 Chemical Manufacturing
    Chaparral Steel Co. (M: CHAP) Sep 5 2.0 40.14 17 252 1,855.2 9.7 63.5 Construction - Supplies and Fixtures
    Cleveland-Cliffs Inc. (N: CLF) Jul 3 2.0 42.84 17 11 1,784.8 8.8 70.2 Metal Mining
    Tennant Company (N: TNC) Jul 26 2.0 26.59 14 31 494.7 18.7 39.9 Misc. Capital Goods
    Terex Corporation (N: TEX) Jul 17 2.0 51.38 16 98 5,204.8 18.5 76.9 Misc. Capital Goods
    Reliance Steel & Aluminum (N: RS) Jul 20 2.0 34.77 (10) 39 2,623.4 8.8 87.5 Misc. Fabricated Products
    Wells Fargo & Company (N: WFC) Aug 14 2.0 36.33 7 23 122,331.1 15.4 10.7 Money Center Banks
    Global Imaging Systems (M: GISX) Aug 16 2.0 21.80 10 29 1,130.6 17.6 15.6 Office Equipment
    Dril-Quip, Inc. (N: DRQ) Oct 6 2.0 35.93 (13) 84 1,405.7 23.2 53.3 Oil Well Services & Equipment
    Halliburton Company (N: HAL) Jul 17 2.0 28.71 (22) (6) 29,604.4 11.8 97.3 Oil Well Services & Equipment
    Helmerich & Payne, Inc. (N: HP) Jul 10 2.0 23.73 (15) (8) 2,496.3 10.9 32.4 Oil Well Services & Equipment
    Orchids Paper Products (A: TIS) Jul 24 1.5 9.00 (15) 37 56.1 69.2 nmf Paper & Paper Products
    CSX Corporation (N: CSX) Aug 16 2.0 34.77 8 59 15,421.6 15.5 20.0 Railroads
    Cass Information Systems (M: CASS) Sep 18 1.5 33.65 21 58 280.2 21.4 15.2 Regional Banks
    CCF Holding Company (M: CCFH) Sep 21 1.5 20.55 19 75 74.6 18.7 17.6 Regional Banks
    Enterprise Bancorp, Inc. (M: EBTC) Jul 3 2.0 16.25 0 14 124.9 14.3 7.8 Regional Banks
    Frontier Financial Corp. (M: FTBK) Sep 27 1.5 27.50 26 50 1,244.6 19.9 13.4 Regional Banks
    Macatawa Bank Corp. (M: MCBC) Jun 30 1.5 23.30 8 13 377.7 17.5 25.7 Regional Banks
    Renasant Corp. (M: RNST) Aug 29 1.5 31.25 21 54 485.4 18.8 3.2 Regional Banks
    Lowe's Companies, Inc. (N: LOW) Jul 3 2.0 30.95 11 1 47,289.3 15.8 23.0 Retail (Home Improvement)
    Community Financial Corp. (M: CFFC) Sep 7 2.0 11.65 (2) 16 49.5 12.3 14.1 S&Ls/Savings Banks
    Cooperative Bankshares, Inc. (M: COOP) Jul 3 1.5 18.90 11 47 122.9 19.9 2.9 S&Ls/Savings Banks
    Riverview Bancorp, Inc. (M: RVSB) Aug 25 2.0 13.92 7 31 160.9 15.1 20.6 S&Ls/Savings Banks
    Intuit Inc. (M: INTU) Jul 7 2.0 35.33 24 64 12,197.0 33.6 19.2 Software & Programming
    Reynolds American, Inc. (N: RAI) Aug 15 2.0 62.64 5 59 18,513.0 16.8 12.9 Tobacco
    Artesian Resources (M: ARTNA) Jul 3 1.5 18.54 (3) (4) 112.4 22.1 2.1 Water Utilities
    Exchange Key: N=New York Stock Exchange; A=American Stock Exchange; M=NASDAQ National or NASDAQ Small Cap Market.
    Source: AAII's Stock Investor Pro, Reuters Research, Inc. Data as of 10/13/2006.


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