3 Companies Prepared for Stock Splits

Sometimes, a company’s success can take a stock so high that it pushes investors away. This is why managers announce stock splits.

While a stock split doesn’t change anything in terms of a company’s fundamentals, it makes it easier for investors to own the stock. 2024 has been the year of the stock split and there are many potential stock splits to make a big announcement.

From a tech darling Nvidia (NASDAQ:NVDA) to the famous Chipotle Mexican Grill (NYSE:CMG) and Walmart (NYSE:WMT), all went through the divisions this year.

Retail investors find themselves in a stock split and take advantage of it.

A low price means the stock is readily available and often gains momentum after it starts trading at a new price. Here are three companies that are ideal options for stock splits for the year. Let’s check them out.

Eli Lilly (LLY)

So far, 41% Eli Lilly (NYSE:LLY) stock exchanges hands for $834 and is one of the top pharma stocks to own. The company reported impressive revenue growth, driven by obesity drugs Zepbound and Mounjaro.

It hit a 52-week high of $960 earlier this month and has seen a recent pullback. In addition to weight loss, the company also has solid cancer drugs and recently received FDA approval for donanemab, its Alzheimer’s drug.

After receiving FDA approval for Mounjaro in 2023, the company has seen steady sales growth. It generated revenue of $1.8 billion in the first quarter while Zepbound generated $517 million.

These are two blockbuster drugs on the market that have seen huge demand and Eli Lilly has invested $9 billion in a new manufacturing facility to boost production.

The company’s upcoming quarterly results could push the stock to $1,000 and make it harder for investors to own it. It is clear that the demand for weight loss drugs is high and Eli Lilly is in a position to take advantage of it.

Super Micro Computer (SMCI)

Super Micro Computer (NASDAQ:SMCI) has been on an 18-month streak and is up 147% YTD. Exchanging hands for $705, the stock continues to move higher since the beginning of the year and now may be the perfect time to part.

Its partnership with Nvidia has made the stock stronger and as Nvidia grows, SMCI follows. The company got the opportunity to move forward and as the AI ​​market grew, it showed great growth.

It makes servers that help run AI processors and microchips and the company has seen incredible demand worldwide. The future is AI and as the demand is slowly rising, SMCI is in the right place at the right time. Super Micro Computer added three new devices this year to meet demand.

The company has just been added to Nasdaq 100 index will make it more prominent as the underlying funds and ETFs that track this index will buy shares.

In fact, SMCI has become a hot commodity. In the third quarter, it saw a 200% gain to $3.85 billion and aims to earn $14.7 billion for the full year.

Although a stock split doesn’t change anything for the company, it can make the stock cheaper for investors. With SMCI inches closer to $1,000, a stock split may be in the cards.

MercadoLibre (TWO)

Free market (NASDAQ:TWO) was launched in 2007 and the company has never divested its assets. This year may be different. Trading at $1,650, the stock is valued and is up 8% YTD. It’s up 40% in the last 12 months and the company doesn’t pay dividends either.

The Latin American e-commerce company is very similar to Amazon (NASDAQ:AMZN) and operates in a market where it has seen significant growth. It is different from fintech and focuses on digital payments. The biggest advantage the company has is its location.

It operates in Latin America where fintech is still in its infancy and there is little competition. In the first quarter, it saw a 36% YOY jump in revenue to $4.33 billion and 59% of total revenue came from Brazil. Even its advertising revenue grew 64% YOY.

As a business, MercadoLibre is a lucrative business and generates enough revenue to keep investing in new opportunities. Its e-commerce segment saw significant growth and the business reported EPS of $6.78 per share.

MELI stock may continue to rise, driven by strong fundamentals and market expansion. MercadoLibre is in a very strong position to benefit from the growing popularity of e-commerce and digital payments. The company will report results next week and could keep the momentum going.

At the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any of the security positions mentioned in this article. The opinions expressed in this article are those of the author, in accordance with InvestorPlace.com Publishing Guidelines..