1 Stock-Split Stock to Buy Hand Over Fist in July and 1 to Avoid
Stock splits don't change fundamentals, but there's some evidence they can lead to outperformance.
O'Reilly has been a longtime winner in the auto parts industry.
Interactive Brokers has delivered strong growth, but lower interest rates would put a significant dent in its profits.
10 stocks we like better than O'Reilly Automotive ›
Stock splits don't do anything to change the fundamentals of a stock, but investors still like them nonetheless.
Some believe they make the stock cheaper, which is not really true. Though stock splits do lower the individual share price, they don't affect the valuation of the stock, which is what actually matters. Additionally, there's some evidence that stocks tend to outperform the S&P 500 after their split. That could be because management chooses the timing of the split, and they're likely to do it when they're confident that the stock can keep rising.
Additionally, if investors see the stock split as a bullish signal, that could become a self-fulfilling prophecy, driving the stock up because people expect growth after the split.
While there are a number of attractive stock-split stocks on the market, not all of them are buys. Let's take a look at one stock-split stock worth buying and another one to avoid.
One stock-split stock to buy
O'Reilly Automotive (NASDAQ: ORLY) has quietly been one of the best-performing stocks of the 21st century. The auto parts retailer has delivered a steady stream of growing profits and established a competitive advantage in serving the commercial channel, meaning repair shops. In that business, having the needed part in stock and being able to deliver quickly is essential. O'Reilly has also blanketed the U.S. with stores to drive its growth. Since 2000, the stock is up more than 12,000%, making it a 100-bagger.
Given those gains, it shouldn't be a surprise to see the company finally issuing a stock split. It announced a 15-for-1 split on June 2, which went into effect on June 9.
O'Reilly trades at a premium, but it's well-deserved. In the first quarter, comparable sales rose 3.6%, and the company continues to open new stores, with 38 new locations in Q1. For the full year, it sees comparable sales of 2% to 4%, and earnings per share of $42.90 to $43.40 (before the split was announced). That's about $2.90 in earnings per share.
O'Reilly's distribution network is a key source of competitive advantage for the company. Having the right inventory in stock has helped it serve both the commercial and DIY channels. The company has also benefited as the average age of a car on the road has increased. This means that Americans are spending more money on repairs, instead of buying new cars.
One stock-split stock to avoid
The stock-split stock to avoid is Interactive Brokers (NASDAQ: IBKR), a leading discount brokerage, which issued a 4-for-1 stock split in June.
It's true that Interactive Brokers' recent performance has been impressive. In Q1, commission revenue rose 27% to $516 million, buoyed by higher trading volume. As with other brokerages, the bull market has been good to Interactive Brokers, as investors tend to be more active when they believe stocks will go up.
Customer accounts in the quarter were up 32% to 3.87 million, and equity rose 34% to $664.5 billion.
Those numbers are all positive and show the business delivering solid growth. However, the reason to avoid the stock is that most of its revenue currently comes from interest income, and that may not be sustainable. While interest rates have remained elevated due to fears about inflation coming back, the Federal Reserve still aims to bring down interest rates, which will cool off Interactive Brokers' most valuable profit stream. The company collects interest on both the cash it holds and margin loans, and says that yields are generally a reflection of benchmark interest rates, which are greatly influenced by the Fed. Cash and margin loans contribute a similar amount of its income.
Additionally, the stock is trading at a price-to-earnings ratio of 35, though interest rate cuts or a sell-off in stocks could wipe out profits. While the company deserves credit for its execution and the growth of the business, the valuation and reliance on interest income set the stock up for a potential pullback.
Should you buy stock in O'Reilly Automotive right now?
Before you buy stock in O'Reilly Automotive, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!*
Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2025
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $175 calls on Interactive Brokers Group and short January 2027 $185 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.
1 Stock-Split Stock to Buy Hand Over Fist in July and 1 to Avoid was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
22 minutes ago
- Yahoo
Where Will Cameco Stock Be in 3 Years?
Key Points Cameco's stock recently hit an all-time high. Uranium's soaring commodity price is driving that rally. But it still looks reasonably valued relative to its growth potential. 10 stocks we like better than Cameco › Cameco (NYSE: CCJ), one of the world's top uranium miners, usually isn't a high-growth stock. But over the past three years, its price surged about 250% and now hovers near its all-time high. The S&P 500 only rose 60% during the same period. Let's see why Cameco's stock crushed the market, and if it can keep climbing over the next three years. A look back at Cameco's lost decade Cameco, which is based in Canada, owns uranium mines and mills across Canada, the U.S., and Kazakhstan. It mined roughly 17% of the world's uranium in 2024, making it the second largest uranium miner after Kazatomprom (OTC: NATK.Y), Kazakhstan's national mining company. From 2011 to 2021, Cameco's annual revenue dropped from $2.41 billion to $1.18 billion (in U.S. dollars) without a single year of revenue growth. That decline started after the Fukushima nuclear disaster in March 2011, which triggered a global collapse in uranium prices as many countries cautiously reined in their nuclear energy plans. Uranium's spot price plunged from more than $70 per pound before the Fukushima disaster to less than $20 in 2017, and Cameco was forced to suspend work at its biggest mines and throttle back its production to conserve its cash. Before the uranium market could recover, the COVID pandemic disrupted the market again and forced the company to temporarily shut down more of its mines. The weak Canadian dollar exacerbated that decline because the miner sold its uranium in U.S. dollars. What happened over the past three years? But from 2021 to 2024, Cameco's revenue had a compound annual growth rate (CAGR) of 29% in Canadian dollar terms. Its gross margins also expanded to the double digits over the past two years. Metric 2022 2023 2024 Revenue growth 27% 39% 21% Gross margin 0.1% 21.7% 25% Data source: Cameco (all figures in Canadian dollar terms). That robust recovery was driven by uranium's spot prices, which soared from $29.63 in January 2021 to $78.50 this June. That rally prompted Cameco to restart its mining operations at McArthur River in Australia and Key Lake in the Canadian province of Saskatchewan in 2022 after being suspended in 2018. It also partnered with Brookfield Asset Management to acquire the nuclear power plant designer and builder Westinghouse Electric in late 2023. Its new 49% stake in Westinghouse should offset the volatility of its core mining business and make it the top uranium supplier for those plants. Several catalysts drove uranium's price higher over the past few years. The global supply shrank as Cameco and Kazatomprom curbed their production, but the demand rose as more countries initiated new nuclear energy plans and resumed their idled projects. Other global challenges are keeping uranium prices elevated. Russia, which was a major exporter of enriched uranium products and services to the U.S. and Europe, was hit by sanctions and export bans after its invasion of Ukraine in early 2022. Kazatomprom's supply chain issues and a coup in Niger (another key producer of uranium) in 2023 further reduced the global supply while driving more nuclear energy companies to buy their uranium from Cameco. What will happen to Cameco over the next three years? The bulls expect uranium's price to soar even higher as the market's demand continues to outstrip its available supply. The rapid growth of the cloud and AI data center markets -- which are driving more companies to consider using next-gen nuclear energy solutions like small modular reactors (SMRs) and microreactors -- could amplify those gains. Looking ahead, Cameco's 49% stake in Global Laser Enrichment (GLE) -- its uranium enrichment joint venture with Silex -- could transform it into a one-stop shop for nuclear power as it integrates those uranium enrichment capabilities into its core mining and conversion businesses. The International Atomic Energy Agency (IAEA) expects the world's nuclear capacity to expand by up to 2.5 times from 2024 to 2050, so Cameco could still have plenty of room to grow over the next few decades. From 2024 to 2027, analysts expect Cameco's revenue to have a CAGR of 8% (in Canadian dollar terms) as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) have a CAGR of 16%. Its growth should cool off as it laps the big spike in uranium spot prices, the restarting of its mines, and its investment in Westinghouse Electric, but it still looks reasonably valued at 25 times this year's adjusted EBITDA. So even though Cameco's stock is trading near its all-time high, it could rise even higher over the next three years. Should you invest $1,000 in Cameco right now? Before you buy stock in Cameco, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Cameco wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management and Cameco. The Motley Fool has a disclosure policy. Where Will Cameco Stock Be in 3 Years? was originally published by The Motley Fool Sign in to access your portfolio
New York Post
23 minutes ago
- New York Post
Democrats self-own bragging about inflation shows the left has learned NOTHING
Everybody makes mistakes. Not everyone makes the same mistakes over and over again. Last week, the geniuses in charge of maintaining the Democratic Party's social media picked at a fresh wound — and showed, again, exactly why it lost the 2024 election. The blue team's official X account shared a line chart showing the change in the price of various groceries — meat, dairy, produce, etc. — over time, and asserting that 'prices are higher today than they were on [sic] July 2024.' 'Trump's America,' read the caption. The problem? The last part of the line barely went up. The blue team's official X account, with the caption 'Trump's America,' shared a chart showing the change in the price of various groceries, asserting that 'prices are higher today than they were on [sic] July 2024.' Eric Daugherty, /X And what it actually showed was a massive increase in prices between 2021 and 2024. In other words: over the course of former President Joe Biden's White House tenure. 'I would just advise Democrats not to post about inflation given their track record,' suggested conservative influencer A.G. Hamilton. 'Might save them the embarrassment of having to delete their posts after getting dunked on' — which is exactly what they did. 'This is the gang that couldn't shoot straight!' marveled Fox Business host Stuart Varney. And of course Team Trump got in on the action. The problem with the chart was that it actually showed a massive increase in prices between 2021 and 2024 – when Biden was president. RapidResponse47/X What's notable about the braindead blunder, though, is not the blunder itself. It was that it represented yet another admission, eight and a half months after they surrendered the presidency to Donald Trump for the second time in three election cycles, that the Democrats still haven't made a sincere effort at diagnosing the reasons for their unpopularity — much less addressing them. A new Wall Street Journal poll found that their party continues to suffer as a result — to the point that just 33% of Americans hold a favorable view of it, and 63% view it unfavorably. Both Donald Trump (-7) and the GOP (-11) are also underwater, but may as well be polling as well as ice cream compared to the Democrats. The same holds true of the public's view of various issues; voters still trust the GOP more than the alternative when it comes to the economy, inflation, immigration and foreign policy. If that doesn't wake Democrats up to the provenance of all their political pain, nothing will. The Left has long relied on comforting fallacies to numb the discomfort that accompanies defeat. After 2016, elected Democrats and their media allies insisted that Trump's shocking victory was only possible thanks to Russian meddling. And now, they're laboring under the misimpression that return to power can be attributed to Republicans' superior, but decepting messaging — an almost supernatural ability to compel Americans to believe that which isn't so. If only they could convince the public of the truth, they'd surely prevail. But the cold, hard truth is that it's always been about the substance, stupid — as the unflattering data they so proudly shared last week demonstrates. Kamala Harris was deposited into the dustbin of history because she was the top lieutenant in an administration that had proven a miserable failure long before her boss's implosion last summer. Americans spent the entirety of the Biden years telling pollsters that their lives were demonstrably, palpably worse as a result of historic price hikes. Biden & Co. responded to these pleas for relief by denying the existence of inflation until they couldn't any longer. Then, when they finally did implicitly admit to the effects of the nearly $2 trillion boondoggle they passed in 2021, they slapped the name 'Inflation Reduction Act' on yet another profligate spending bill that every layman in America knew would only compound the problem. There are similar stories to be told about Americans' dissatisfaction with Biden's approach to foreign policy, his abdication of his duty to secure the border, and his championing of a radical social agenda that maintains up is down, left is right, and black is white. Their stubborn refusal to grapple with this incontrovertible truth is also reportedly set to be reflected in an upcoming 2024 autopsy conducted by the DNC. The New York Times reports that it will 'steer clear of the decisions made by the Biden-turned-Harris campaign,' and instead 'focus more on outside groups and super PACs that spent hundreds of millions of dollars aiding the Biden and Harris campaigns through advertising, voter registration drives and turnout efforts.' It's like watching a restaurant serving inedible food invest in new plateware. The gripe has never been with the Democrats' presentation or voters' tastes. It's with the product itself.
Los Angeles Times
23 minutes ago
- Los Angeles Times
It's a year of rapid change, except when it comes to Trump's approval numbers, poll finds
WASHINGTON — Eric Hildenbrand has noticed prices continue to rise this year with President Trump in the White House. The San Diego resident doesn't blame Trump, however, his choice for president in 2024, but says Gov. Gavin Newsom and other Democrats who control the state are at fault. 'You can't compare California with the rest of the country,' said Hildenbrand, 76. 'I don't know what's going on in the rest of the country. It seems like prices are dropping. Things are getting better, but I don't necessarily see it here.' Voters like Hildenbrand, whose support of the Republican president is unwavering, help explain Trump's polling numbers and how they have differed from other presidents' polling trajectory in significant ways. An Associated Press-NORC Center for Public Affairs Research poll conducted in March found that 42% of U.S. adults approved of Trump's job performance. That is a lower rating than those of other recent presidents at the beginning of their second terms, including Democrat Barack Obama and Republican George W. Bush. The most recent AP-NORC poll, from July, puts Trump at 40% approval. While that is not a meaningful change from March, there is some evidence that Trump's support may be softening, at least on the margins. The July poll showed a slight decrease in approval of his handling of immigration since earlier in the year. Some other pollsters, such as Gallup, show a downward slide in overall approval since slightly earlier in his term, in January. But even those shifts are within a relatively narrow range, which is typical for Trump. The new AP-NORC polling tracker shows that Trump's favorability rating has remained largely steady since the end of his first term, with between 33% and 43% of U.S. adults saying they viewed him favorably across more than five years. Those long-term trends underscore that Trump has many steadfast opponents. But loyal supporters also help explain why views of the president are hard to change even as he pursues policies that most Americans do not support, using an approach that many find abrasive. Trump has not had a traditional honeymoon period in his second term. He did not in his first, either. An AP-NORC poll conducted in March 2017, two months into his first term, showed that 42% of Americans 'somewhat' or 'strongly' approved of his performance. That is largely where his approval rating stayed over the course of the next four years. The recent slippage on immigration is particularly significant because that issue was a major strength for Trump in the 2024 election. Earlier in his second term, it was also one of the few areas where he was outperforming his overall approval. In March, about half of U.S. adults approved of his handling of immigration. But the July AP-NORC poll found his approval on immigration at 43%, in line with his overall approval rating. Other recent polls show growing discontent with Trump's approach on immigration. A CNN/SSRS poll found that 55% of U.S. adults say the president has gone too far when it comes to deporting immigrants who are living in the United States illegally, an increase of 10 percentage points since February. 'I understand wanting to get rid of illegal immigrants, but the way that's being done is very aggressive,' said Donovan Baldwin, 18, of Asheboro, N.C., who did not vote in the 2024 election. 'And that's why people are protesting, because it comes off as aggression. It's not right.' Ratings of Trump's handling of the economy, which were more positive during his first term, have been persistently negative in his second term. The July poll found that few Americans think Trump's policies have benefited them so far. Even if he is not a fan of everything Trump has done so far, Brian Nichols, 58, of Albuquerque is giving him the benefit of the doubt. Nichols, who voted for Trump in 2024, likes what he is seeing from the president overall, though he has his concerns both on style and substance, particularly Trump's social media presence and his on-again, off-again tariffs. Nichols also does not like the push to eliminate federal agencies such as the Education Department. Despite his occasional disagreements with Trump, though, Nichols said he wants to give the president space to do his job, and he trusts the House and Senate, now run by Republicans, to act as a safeguard. 'We put him into office for a reason, and we should be trusting that he's doing the job for the best of America,' Nichols said. Trump has spent the last six months pushing far-reaching and often unpopular policies. Earlier this year, Americans were bracing themselves for higher prices as a result of his approach to tariffs. The July poll found that most people think Trump's tax and spending bill will benefit the wealthy, while few think it will pay dividends for the middle class or people like them. Discomfort with individual policies may not translate into wholesale changes in views of Trump, though. Those have largely been constant through years of turmoil, with his favorability rating staying within a 10-percentage point range through his widely panned handling of the COVID-19 pandemic, a felony conviction and an attempted assassination. To some of his supporters, the benefits of his presidency far outweigh the costs. Kim Schultz, 62, of Springhill, Fla., said she is thrilled with just about everything Trump is doing as president, particularly his aggressive moves to deport anyone living in the country illegally. Even if Trump's tariffs eventually take effect and push prices up, she said she will not be alarmed. 'I've always had the opinion that if the tariffs are going to cost me a little bit more here and there, I don't have a problem with that,' she said. Across the country, Hildenbrand dislikes Trump's personality and his penchant for insults, including those directed at foreign leaders. But he thinks Trump is making things happen. 'More or less, to me, he's showing that he's on the right track,' he said. 'I'm not in favor of Trump's personality, but I am in favor of what he's getting done.' Thomson-Deveaux and Cooper write for the Associated Press and reported from Washington and Phoenix, respectively.
