Show I It l t Wm STOCK SPLIT IOSSI POSSIBILITIES FOtt FOit 1975 With most stocks still priced well below their former high levels there are now only a limited number of issues which appear to be in a position to split Throughout most of the past decade however it was relatively easy to find a large number of stocks that were logical split candidates It was in fact usually usually- a matter of keeping such a table to manageable length by listing only the larger companies But when the stock of a concern remains in a comparatively depressed state state and and this is the situation with the bulk of stocks today today today-it it would be rather unlikely for a management to consider splitting its stock This usually happens when an issue is moving sharply upward often into new high ground Not many are doing so now Why Split One of the major reasons for a astock astock astock stock split of course is the price range at which the issue sells Most managements would obviously like to have their firms firm's stock actively traded and in recent years the most popular price range for investor purchases has been between 25 and 50 per share most stocks are now already selling at or below these levels In past years more investors have bought meaningful numbers of shares in the 50 25 price range than at higher levels because they could usually buy in round lots of shares As a consequence when good- good grade issues rose in price to the area of 60 they were generally regarded as logical split candidates The split ratio would not necessarily ly be 2 for 1 but could be any multiple or percentage thereof There is naturally no assurance that a stock will split when it reaches the over 50 share per-share or even per- per share range Some issues have sold at these levels for years without splitting In contrast there are instances where a stock priced 0 below 50 has split As a general general general gen gen- eral rule when stocks in that lower range have split they were moving upward upward not not downward in in price Usually A Plus In theory a split provides no advantage for the shareholder since he merely has more pieces of paper but the same proportionate equity in the company as he had before Nevertheless a a split usually does have a bullish impact One reason for this is the fact that a split is often accompanied accompanied accompanied ac ac- ac- ac companied by some increase in inthe inthe inthe the dividend And there is an implication that the company is enjoying fundamental growth- growth enough so that the stock has risen in price to the point where a split is in order Finally a lower share per-share price indicates there may be a pickup in interest and demand for the shares The Possibilities Below are listed 14 companies that seem in the opinion of the Research Department of Babson's Reports to be in a position to split their stocks or declare important stock di dividends this year Of course if the stock market should be strongly upward through much of he year the outlook might brighten for a greater number of stock splits Babson's currently maintains a hold position on all of the stock in the following 75 1974 high high- low price Atlantic Richfield 86 IB- IB 73 Getty 96 Halliburton I 04 Packard Hewlett 82 92 52 Johnson Johnson 92 72 McGee Kerr 70 93 47 Lilly 74 83 56 McDermott 71 48 Merck 74 86 47 Procter Gamble 92 67 Reynolds 51 57 37 73 Standard Brands 65 67 40 and Union Pacific 69 98 95 |