Why not 3 for 2 splits?
The question is, “Why don’t we include stocks that have split 3 for 2 or by some other formula?” We include 2 for 1 and higher splits (such as 3 for 1), but not 3 for 2 or lower. Our procedure is based on one basic consideration. The entire 2 for 1 strategy and procedure relies on David Ikenbery’s Rice University original study and follow-up study on stock splits. The studies show that the group of stocks that had announced splits had a better overall performance, over two to three years, than a group of similar stocks that had not split. For our purposes, the number of stocks splitting 2 for 1 or higher is more than enough to provide several good companies to choose from each month. Remember, we only need one! Doing the research and sifting through the 20 to 50 stocks that split 2 for 1 or 3 for 1 each month is time consuming enough. Why would one want to make the list any longer? To this some might say, “but what if the most promising stock splits 3 for 2 instead of 2 for 1?” You can
The question is, “Why don’t we include stocks that have split 3 for 2 or by some other formula?” We include 2 for 1 and higher splits (such as 3 for 1), but not 3 for 2 or lower. Our procedure is based on one basic consideration. The entire 2 for 1 strategy and procedure relies on David Ikenbery’s Rice University original study and follow-up study on stock splits. The studies show that the group of stocks that had announced splits had a better overall performance, over two to three years, than a group of similar stocks that had not split. For our purposes, the number of stocks splitting 2 for 1 or higher is more than enough to provide several good companies to choose from each month. Remember, we only need one! Doing the research and sifting through the 20 to 50 stocks that split 2 for 1 or 3 for 1 each month is time consuming enough. Why would one want to make the list any longer? To this some might say, “but what if the most promising stock splits 3 for 2 instead of 2 for 1?” You can
