3 top stocks that look ready to split

Stock splits attract a lot of attention among investors.

While they don’t change a stock’s fundamentals, they act as a signal from management that they expect the stock to continue moving higher. This is because stock splits represent milestones in a stock’s growth and make the price of an individual stock cheaper, making it more accessible to retail investors.

There is also some evidence that stocks outperform after a stock split, which may be due to the stock’s upward momentum leading up to the split and management’s confidence that the stock will continue to move higher.

If you’re looking for the next split action, here are three that could be next.

1. Reservation of Holdings

Reservation Holdings (NASDAQ: BKNG) is the world’s largest online travel agency and has never had a stock split in its history, although it did a reverse split in 2003 when it was on the verge of bankruptcy after the dot-com bubble burst.

Since then, Booking’s stock has soared, and its stock price is now approaching $4,000 per share, making it bigger than any other US stock except the homebuilder. DVR and Berkshire Hathaway Class A Shares.

CEO Glenn Fogel recently played down expectations of a stock split as many other high-priced stocks split their shares. In an interview with at Barron’she responded to a question about a possible stock split by saying, “I don’t think I want that kind of investor.”

Fogel is not alone in this sentiment. Amazon founder Jeff Bezos also dismissed investors’ short-term concerns, insisting he is focused on the long term. However, Amazon eventually split its shares after Bezos passed the torch to current CEO Andy Jassy.

Despite Fogel’s comment, a Booking stock split looks increasingly likely if the stock price continues to rise.

2. AutoZone

AutoZone (NYSE: AZO) it is also one of the most expensive stocks on the market based on individual share price and, like Booking, has been a long-time performer.

AutoZone and rival O’Reilly Automotive have long provided huge profits by adding new stores and serving a growing market for aftermarket auto parts, especially since the average age of a vehicle on the road is now more than 12 years.

AutoZone stock is now trading at over $3,000 per share. The company hasn’t split its stock since 1994, and since then, the stock is up about 42,000%.

The auto parts stock has also consistently gained over the past five years in a volatile stock market, showing the strength of its recession-proof business model.

The story continues

The company hasn’t announced any plans for a stock split, but it would make sense to do one, especially since the stock looks well-positioned for continued gains.

3. MercadoLibre

finally, MercadoLibre (NASDAQ: MELI) it also looks like a good candidate for a stock split. The Latin American e-commerce leader just topped $2,000 per share and, like the other stocks on the list, has been a consistent gainer on the stock market.

MercadoLibre has grown over the years by expanding its business into a third-party marketplace, a digital payment network, logistics services and lending businesses.

While MercadoLibre appears to have been eligible for a stock split for a period of time based on its stock price, which has been above $1,000 for most of the past five years, the company has never split its stock price in its history , which goes back to its IPO in 2007.

MercadoLibre has not commented on a stock split, but it appears likely to happen if the stock continues to gain. The company is still growing rapidly and margins are expanding, setting the stock up for more gains.

Don’t be surprised to see MercadoLibre split its stock in the coming years, if not sooner.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Jeremy Bowman has positions in Amazon and MercadoLibre. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Booking Holdings, MercadoLibre and NVR. The Motley Fool has a disclosure policy.

Stock Split Watch: 3 Top Stocks That Look Ready to Split was originally published by The Motley Fool