The stock market is in a fever: a stock split fever. Walmart, Chipotle Mexican GrillAnd Nvidia are just a few of the companies that have announced stock splits so far this year. No doubt more will follow. But which? Here are two great growth stocks that I think are primed.
MercadoLibre
At the top of the list are stocks ready for a split MercadoLibre (NASDAQ: MELI). The company, which operates a Latin America-focused e-commerce and payments platform, has a stock price above $1,700, making it a prime candidate for a stock split.
That said, if history is any guide, investors may continue to wait for a MercadoLibre stock split. It has not conducted a stock split in the 25 years it has been a publicly traded company.
The company’s shares are nearing an all-time high thanks to excellent fundamentals. Over the past twelve months, the company generated $15.6 billion in revenue and $1.1 billion in net profit, with quarterly profits growing 71% year over year.
Analysts expect MercadoLibre’s blistering sales growth to continue, with this year’s sales estimated to rise 33% from a year ago.
Either way, a stock split would be a good move for the company, as a lower price could attract more retail interest in this red-hot growth stock.
Spotify technology
The following is Spotify Technology (NYSE: SPOT). What should immediately strike any Spotify investor is how the company’s stock prices have changed over the past two years.
At the end of 2022, the stock seemed to be left for dead. Shares were down more than 80% from their all-time high. Still, Spotify CEO Daniel Ek showed his courage by cutting costs, and now it’s clear his strategy has paid off.
After struggling to turn a profit, the company recently posted a quarterly net profit of $214 million. In addition to the aforementioned cost savings, Spotify is also expanding its ad-based business. While subscription fees still make up the vast majority of the company’s revenue (about 89% of total revenue), advertising revenue has increased since the company’s most recent quarter (ended in March) to $389 million, or 11% of total turnover. ).
Be that as it may, Spotify shares are now trading for around $300 per share, making them expensive for many investors who are resistant to high-priced stocks. The company’s shares, which debuted in an initial public offering in 2018, have never undergone a stock split. However, now could be the right time, as a 2-for-1 or even 3-for-1 stock split could generate additional interest in Spotify stock among retail investors.
Should You Invest $1,000 in Spotify Technology Now?
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Jake Lerch has positions in MercadoLibre, Nvidia and Spotify Technology. The Motley Fool holds positions in and recommends Chipotle Mexican Grill, MercadoLibre, Nvidia, Spotify Technology, and Walmart. The Motley Fool has a disclosure policy.
Stock-Split Watch: 2 Great Growth Stocks That Look Ready to Split was originally published by The Motley Fool
