Institutional investors may loathe stock splits, but that does not diminish the potency of forward splits.
“The academic studies of stocks undergoing splits suggest that you could beat the market by simply creating a portfolio that contained all stocks undergoing a so-called forward split (the opposite of a reverse split). But MacNeale believes he can do even better by investing only in stocks that, at the time of their splits, are trading for relatively low ratios of price to earnings or book value ,” writes Mark Hulbert for MarketWatch.
A University of Virginia confirms that splits boost liquidity via increased post-split buying by, if you can believe it, mutual funds.
Since June 2014, the month in which Apple announced its split, shares of the iPad maker are up 41.1%. TOFR is up almost 8% since coming to market while the S&P 500 is higher by 4.2% over that period.
USCF Stock Split Index Fund
