Name three things these five companies have in common: AutoZone,
One: Their shares are among the priciest in the U.S. stock market — all in four figures. Two: They have almost never split their stock. Three: All enjoy among the highest-quality shareholders measured by long-term horizon and portfolio concentration.
These are not coincidences, yet the shared experience seems lost on the increasing number of companies doing stock splits, from
(ticker: AAPL) to
(TSLA). Both of these companies recently split their stock in order to cut share price. They apparently are trying to attract shareholders who will also be customers. But while that might be good product marketing, it is definitely bad investor stewardship: Stock splits degrade a company’s shareholder quality.
Managers and investors alike should care about which shareholders grace a company’s shareholder list. At companies brimming with transient