We’re only a few days into November, and what a month it’s been thus far. We have a new president, the market has gone berserk, and most investor attention is being placed on companies that may benefit from the new geopolitical dynamics we could have on our hands for the next four years.
Additionally, Q3 earnings season has brought upgraded earnings guidance for a number of top companies which remain in the limelight. The two companies I’m going to discuss here have certainly seen their fair share of optimism following earnings and the recent Trump election win.
But there’s also the possibility for upcoming stock splits for the two companies I’m going to dive into, given where their stock prices currently trade and the momentum-driven track they’re on right now. If the market melt-up we’re seeing continues, these are two stocks I think could have big upside from here and could potentially be stock split candidates investors this month.
Key Points About This Article:
- Most investor attention is being paid to political events that are re-shaping the month of November, but that attention could quickly be diverted toward major stock splits.
- Here are two companies that are on my radar as potential stock split candidates for the month of November.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is a stock that has certainly seen its fair share of volatility over the past year. But with a year-to-date return of more than 60%, this is a stock that investors have been rewarded for holding through this volatility. And despite seeing its share price dip following Q3 results which saw the company bring in record revenue of $40.6 billion, and the stock managing little gain from the Trump election win, I still think this is a company that could be poised for a stock split in the future.
Whether such a split will be announced in November or not is anyone’s guess. But with Meta’s stock price now approaching $600 per share, in order for the company to keep this company’s share price within reach for the average investor (and in order to spur increased interest in this stock, which appears to be waning), a stock split may certainly be what the doctor ordered for this company that’s traded range-bound since late-September.
I think there are going to be fundamental drivers that likely take the stock higher in the coming quarters. With strong EPS growth of 37% this past quarter, one could make the argument that Meta’s forward price-earnings multiple of just 23-times is too cheap. On a relative basis compared to the market, that is cheap. I think many investors know that, and that’s why the stock remains at these elevated levels.
The thing is, over the long-term, I do think the company’s current stock price will look like a bargain. No one knows where the stock market is headed from here. But investing in top-tier blue-chip mega-cap tech stocks has clearly been a winning strategy for a long time. Assuming that doesn’t change, this is a potential stock split I think is worth keeping on the radar, whether or not the company decides to split its shares once again.
AutoZone (AZO)
One could certainly make the argument that AutoZone (NYSE:AZO) is overdue for a stock split. Trading around $3,200 per share, this auto parts retailer is among the priciest stocks in the market on a per-share basis. Thus, there are clear and understandable reasons why the company may decide to split its stock.
That said, unlike many tech companies which utilize stock-based compensation to pay employees (one of the key reasons behind stock splits, in many cases), that’s not necessarily the case for AutoZone generally. Teh company is among the more “boring” stocks in the market, operating 7,140 locations providing a wide range of auto parts to retail and commercial clients around the country.
That said, this is a company that’s continued to be in discussions among many investors for a stock split, and perhaps a large one. I’ve argued that a 20-for-1 or 30-for-1 split would be reasonable, given where shares trade. But ultimately, it’s going to be a decision the company’s management team takes on, as to whether such a move makes sense for investors overall.
AutoZone continues to perform well. In FQ3 2024, total sales rose 3.5%, driven by a 3.3% increase in commercial sales and a 1.9% rise in same-store sales. Domestic commercial sales represented 31% of domestic auto parts sales, despite flat overall domestic sales due to delayed tax refunds and mild weather. DIY sales declined by 1%.
For those who want to bet on the aging of the average automobile fleet on U.S. roads, and the propensity for consumers to pay to have their vehicles fixed rather than finance new purchases, this would be among my top picks right now. Again, as far as stock split candidates are concerned, this stock remains near the top of my list for the reasons listed in this article, but it’s a stock I think is worth owning regardless.
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