STOCKS
These days, announcing a stock split is like pumping steroids into a company's share price. The average split, according to one analysis, outperforms nonsplits by 8 percent in the year afterward.
But the biggest gains occur 30 days before the split announcement, so it pays to get in before word gets out. It doesn't take psychic powers: If, in the past, Dell split after hitting 100, it's likely to split when it reaches that point again. Still, keep your eyes - and your Web browsers - wide open.
Aimed at frugal traders, SplitTrader.com delivers free email reports five times a week. Each identifies split candidates, charts their key fundamentals and technical indicators, and suggests trading strategies.
StockSplits.com is geared toward active traders. For $100 a year, it squeezes out up-to-the-minute split announcements (not predictions); for $100 a quarter it sends alerts directly to your pager. StockSplits also sells Nasdaq Level II quotes, daily research, and a book on trading tactics.
Most impressive, Rightline serves up predictions for $400 a year (after a two-week free trial), as well as an earnings calendar, trading tips, and analyses of interest rates, liquidity flows, and market sectors. Rightline's picks are based on a nuanced approach that takes a variety of factors into account. Of 69 splits forecast last year, the company says 74 percent outperformed the Dow.
Rightline's philosophy also sets it apart. "A split doesn't cause good performance," observes founder Roger Perry. "It's a consequence of good performance." Rather than pouring money into a stock because it's poised to split, Perry advises treating a likely split as a starting point for fundamental research. Plenty of companies have tried to play the split game to mask weak fundamentals. Consider Iomega, whose stock has languished despite announcing a split more than two years ago.
In any case, the rage over splits isn't likely to last forever. Perry warns, "Splits only work in a bull market."
SplitTrader.com:www.splittrader.com.
StockSplits.com:www.stocksplits.com.
Rightline:www.rightline.net.
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