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HarryCarysGhost (99.72)

When is the best time to buy a split?

Recs

5

October 15, 2009 – Comments (10) | RELATED TICKERS: BUD , EBIX

Hi everybody!

Since I am fairly new to investing (Visa IPO) I have a question.

I've never owned a split. But Ozzfan34 just turned me on to the fact that EBIX will be offering a 3-1 split.

I did my own research and like the company.

So my question is in your experience when is the best time to buy on annoucement of a split.

Right now at 60

after Dec at 20 or higher(or lower)

after the dust settles.

 Thank you your wisdom is greatly appreciated.

 

As long as I Have you reading this I may as well make a blatent pitch to make me the top bull pitch for BUD.

Just type in BUD give my pitch a rec and Larry the Liver shall live another day. 

10 Comments – Post Your Own

#1) On October 15, 2009 at 10:22 PM, Varchild2008 (83.61) wrote:

If I were you I would stay away.... You sound as if you know nothing about EBIX.  At least that is how you are presenting yourself.

From the standpoint of someone thinking of buying a stock JUST BECAUSE it is about to split..... That is ludicrous.

For example: 

1) EBIX

2) BUD

Which one is a buy if both had the same share price and both announced a 3 to 1 split to happen on the same day and you can't buy both?

It is obvious you have more knowledge with BUD than EBIX.

So... Consider the advantages of taking a gamble at EBIX for the split..... versus increasing your stake (I assume you have one in real money) in BUD.

Just my 2 cents.  Sometimes it is not about the company but it is about your portfolio.  Don't ask if something is good....ask if it is the best choice.

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#2) On October 15, 2009 at 11:22 PM, streetflame (30.23) wrote:

Share price doesn't matter that much.  Very high share prices may discourage speculators and low share prices encourage them but that effect is not huge.

My advice is don't buy EBIX because it is overpriced.   They are selling for 22.6x trailing earnings and 7.5x sales.  Free cash flow is negative.  Their financial condition is weak, with negative tangible book and a current ratio of only .7. On the positive side, margins and growth are good. Margins are holding up but growth may be slowing a bit.

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#3) On October 15, 2009 at 11:29 PM, ozzfan1317 (78.67) wrote:

I didnt see your question till now but my advice is to not buy until you have researched the company and are confident you want to put money into it. Balance sheet in my opinion is decent but you are buying in for the growth potential not valuation. Also if you like the company enough I would buy before the split which offers you two shares for each share you own. Again though look over the financial statements or ask someone to show you how don't just buy because someone else likes it.

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#4) On October 15, 2009 at 11:30 PM, ChrisGraley (29.86) wrote:

Maybe this might explain a split better to you.

I am now your favorite company. I'm worth a dollar a share.

I am now announcing that due to my popularity, I'll be going through a 4:1 split. Instead of getting a dollar, your getting 4 quarters.

When's the best time to buy me?

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#5) On October 15, 2009 at 11:59 PM, ozzfan1317 (78.67) wrote:

Chris is right the split by itself just gives you more shares of the company at a lower price. The whole appeal to a split is you get more shares assuming the price appreciates back to its origional price.

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#6) On October 16, 2009 at 12:05 AM, streetflame (30.23) wrote:

That is a terrible assumption to make.

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#7) On October 16, 2009 at 12:23 AM, HarryCarysGhost (99.72) wrote:

Thank you all for responding.

 Good point I know enough about EBIX  that I could fit into one day. I've done research on Bud all my life. (yes I own shares but under $40 when it was AHIBF.PK)

If Bud were to announce a 3-1 split I would be elated.

 

 

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#8) On October 16, 2009 at 12:33 AM, HarryCarysGhost (99.72) wrote:

Also I must add that I was not asking for advice on the basics of splits.

I wanted to know how the share price moves during the period of a split and is their a way to profit.

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#9) On October 16, 2009 at 1:58 AM, ozzfan1317 (78.67) wrote:

No problem just wanted to make sure you did your HW. Never put money in something without having a good deal of confidence in the company. Best of luck with your portfolio.

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#10) On October 20, 2009 at 11:22 PM, HarryCarysGhost (99.72) wrote:

Just to defend myself I should have worded the question this way. When is the best time to buy a split on Caps.

I think I'll play it this way green thumb at $60

red thumb right before the split.

green thumb after.

Was'nt sure how a split affects score.

Thank you all for the recs thats more important to me then what happens with Ebix. There's lots of companies that I do a quick research on and then use Caps as a giant watch list.

The companies I really know the insides and outs of I own and write about them. That reminds me my next blog should be about Visa. Will do a write up when I get time.

Thanx,

msftgev

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