Sony Corporation Message Board

sdferrell 2 posts  |  Last Activity: May 15, 2013 1:48 PM Member since: Oct 13, 2005
  • Reply to

    WOW $50!

    by pes77_2010 Apr 10, 2013 5:43 PM
    sdferrell sdferrell May 15, 2013 1:48 PM Flag

    I'm sorry, but you are just wrong. While the price did increase significantly after the last split, it had very little to do with the split. In fact, if you look more closely, after the prior two splits, the price was relatively stagnant for at least a year following the split. That wasn't caused by the split, either.

    It turns out that if you pour 16 oz of milk into two glasses you have twice as many glasses, but you do not have twice as much milk. Just because you are providing twice as many glasses, the market will not pay twice as much for the same amount of milk.

    If NEOG doubles in value, it will be because their sales improve, their costs go down or their prospects improve. Something will happen to make the people buying the stock want to pay a higher price for it.

    There are some limited short term effects a split can have and there are some benefits for liquidity, but it adds nothing to the value of the company.

    sf

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  • Reply to

    WOW $50!

    by pes77_2010 Apr 10, 2013 5:43 PM
    sdferrell sdferrell Apr 14, 2013 11:53 PM Flag

    I enjoy a good stock split as much as the next guy...but, realistically, a stock split adds no value. It is fun, but it is a null event.

    Share buybacks are only a good thing if the stock is undervalued. NEOG is not, it trades at a premium. I think it is worth the premium, but you would not confuse it for "cheap". Why would you want management to waste money like that?

    Dividends are okay, but NEOG typically uses money to make acquisitions. And they do a pretty good job at it. Those acquisitions add value and increase the stock price.

    While it is true you don't "get" anything from a rising stock price until you sell...presumably, at some point you will. I'd rather have a stock that is up 35% in a year and 200% in 5 years, then a 2-3% dividend.

    sf