Although Wall Street has been rightly enamored with the long-term potential for artificial intelligence (AI) — the analysts at PwC believe AI can add $15.7 trillion to the global economy by 2030 — the excitement surrounding stock splits has played a meaningful role in lifting Wall Street’s major stock indexes to record highs in 2024.
A stock split is an event that allows a publicly traded company to alter its share price and outstanding share count by the same factor. Keep in mind that these adjustments are entirely cosmetic and have no effect on a company’s market cap or its underlying operating performance.
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Since consumer goods juggernaut Walmart started the party by completing a 3-for-1 split in late February, more than a dozen high-profile companies have followed in its footsteps, all but one of which has been of the forward variety. Forward splits are designed to reduce a company’s share price to make it more nominally affordable for everyday investors who lack access to fractional-share purchases with their broker.
While many of these “Class of 2024” stock-split stocks are market-leading businesses, their outlooks can significantly differ. As we push forward into November, one unique stock-split stock stands out as nothing short of a screaming bargain, while two others are worth avoiding.
Although most investors gravitate to companies enacting forward splits, the only prominent reverse split of 2024 is the unique stock that can be confidently scooped up in November. I’m talking about satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI), which completed a 1-for-10 reverse split upon consummation of its merger with Liberty Media’s Sirius XM tracking stock, Liberty Sirius XM Group, following the close of trading on Sept. 9.
Companies completing reverse stock splits often do so to avoid delisting from a major stock exchange. What makes Sirius XM unique is it that it was no danger of being booted from…
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