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Opinion: Stock splits tend to boost a company’s shares. Here’s how to find candidates. - MarketWatch

1. Stock splits lead to outsized returns; one-year gains average 25% versus 12% for the S&P 500. 2. Splits boost liquidity, narrow bid-ask spreads, and enhance retail investor sentiment. 3. Index eligibility improves post-split, indirectly helping major S&P 500 constituents. 4. Momentum plays drive post-split performance, as seen in firms like NVDA, AAPL and META.

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FAQ

Why Bullish?

Historically, companies that split exhibit strong price momentum and liquidity improvements. Examples include Apple and Nvidia, which saw enhanced investor sentiment post-split relative to broader index performance.

How important is it?

A sizable number of S&P 500 components are involved; increased retail interest and liquidity provide indirect upward pressure on the index.

Why Short Term?

Most post-split price gains occur within six months to a year, indicating a swift, momentum-driven effect on stock performance.

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