Unlocking Hidden Gems in the Stock Market
As Wall Street continues to ride the wave of artificial intelligence (AI) excitement, another trend has quietly emerged: stock splits. Since consumer goods giant Walmart kicked off the trend with a 3-for-1 split in late February, over a dozen high-profile companies have followed suit. While many of these stocks are market leaders, their outlooks can vary significantly.
A Unique Opportunity in Satellite Radio
One stock-split stock stands out as a screaming bargain in November: Sirius XM Holdings (NASDAQ: SIRI). After completing a 1-for-10 reverse split following its merger with Liberty Media’s Sirius XM tracking stock, Sirius XM is now back on the radar of Wall Street’s top money managers. As a legal monopoly with a satellite-radio license, Sirius XM boasts long-term subscription pricing power and predictable cash flow. With a market-topping 4% yield and shares trading at just 8 times forward-year earnings, this stock is a compelling value proposition.
Two Stock-Split Stocks to Avoid
Not all stock-split stocks are created equal. Two companies that investors should steer clear of in November are Super Micro Computer (NASDAQ: SMCI) and MicroStrategy (NASDAQ: MSTR).
Super Micro conducted its first-ever 10-for-1 split in September, but allegations of accounting manipulation by Hindenburg Research have cast a shadow over the company. With Ernst & Young resigning as its accounting firm and the U.S. Justice Department launching an early-stage probe, it’s best to wait until these issues are resolved before investing.
MicroStrategy, on the other hand, has a Bitcoin-heavy portfolio that accounts for 1.2% of all tokens that’ll ever be mined. However, its unjustifiable valuation premium, dangerous debt-fueled acquisition strategy, and declining software sales make it a bubble waiting to pop.
Don’t Miss Out on the Next Big Opportunity
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