We recently published a list of 12 Stocks That Could Split in the Near Future. In this article, we are going to take a look at where Parker-Hannifin Corp. (NYSE:PH) stands against other stocks that could split in the near future.
Stock splits don’t change how much a company is worth, but they make each share cheaper and easier for people to buy, considering it’s a forward split. Stock splits can vary from a simple 2-for-1 split to a larger 100-for-1 split or more. In a 2-for-1 split, each share is turned into two new shares. This makes each share half the price, but the total value of the company remains the same. For example, if a share costs $100, after a 2-for-1 split, you’ll have two shares that cost $50 each. This can make it easier to buy shares and attract more people to invest. Even though the share price goes down, the total amount of money paid out to shareholders stays the same. Hence, splitting shares doesn’t change how much control existing shareholders have in the company. The main goal is to make the company’s stock more appealing to investors. There’s no proof that stock splits make a company better, but they can make investors feel more positive about the company. But with these benefits come the costs and risks. The process requires legal work and can be expensive.
Splitting a stock doesn’t change a good company into a bad one or vice versa. The price might go up a bit after the split, but it won’t change the company’s long-term fundamentals. Sometimes, a low stock price can actually look bad for a big company. Still, many companies practice splitting stocks if their share prices are growing too high.
2025 Outlook
On January 16, Mark Newton, Fundstrat Global head of technical strategy, joined ‘Squawk Box’ on CNBC to discuss that the long-term market trends look positive. The market initially experienced a cooler-than-expected jump, but concerns were raised about the breadth of the market and the potential impact of interest rates on small-cap stocks. Mark Newton expressed a constructive view but noted that the market’s breadth had deteriorated significantly, with only about 25% of stocks currently above their 50-day moving average. This decline was particularly evident in sectors like healthcare, where seven sectors lost more than 4% in the last month.
Despite these challenges, Newton highlighted that technology stocks had rebounded, helping to keep indices afloat and maintaining long-term trends. However, he noted that near-term sentiment had become pessimistic regarding the potential policies of the president-elect, which added to market uncertainty. He maintained his target for the S&P 500 at 6650, suggesting that interest rates might begin to roll over in the coming months, which could be bullish for equities given their recent correlation with treasury yields.
Methodology
We sifted through ETFs, online rankings, and internet lists to compile a list of the top stocks trading over $400 as of January 19. We then selected the 20 stocks with high surges in their share prices in the past 5 years and a history of splitting stocks. From that, we picked the top 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A robotic arm in a factory demonstrating the application of motion control technologies.
Parker-Hannifin Corp. (NYSE:PH)
Share Price as of January 19: $669.46
Surge in Share Price in 5 Years: 223.41%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 62
Parker-Hannifin Corp. (NYSE:PH) is an industrial company that mainly operates in two main segments. One is the aerospace systems, which provide engine and actuation components. The other is diversified industrial, which serves a range of end markets.
The company’s Aerospace Systems segment delivered record sales of $4.9 billion in FQ1 2025, with organic growth of 1.4% from a year-ago period. This segment benefits from demand in both commercial and defense markets. These include parts for commercial aircraft, military defense, business jets, and helicopters. It’s further fueled by the expanding aftermarket business, which now accounts for 50% of total Aerospace sales, and the recent Meggitt acquisition, which has strengthened service offerings.
Looking ahead, this segment is expected to drive more growth, with the company forecasting 10% organic growth for the sector. As defense spending increases and global economies recover, Aerospace Systems will remain a critical contributor. Goldman Sachs adjusted the price target for Parker-Hannifin Corp. (NYSE:PH) from $818 to $815 while maintaining a buy rating on January 16.
Diamond Hill Mid Cap Strategy stated the following regarding Parker-Hannifin Corporation (NYSE:PH) in its Q3 2024 investor letter:
“Other top Q3 contributors included Parker-Hannifin Corporation (NYSE:PH) and Ciena Corporation. Diversified industrial and aerospace manufacturer Parker-Hannifin is capitalizing on strength in its aerospace business to drive better-than-expected results against a challenging macroeconomic backdrop that has weighed on peers’ results.”
Overall, PH ranks 6th on our list of stocks that could split in the near future. While we acknowledge the growth potential of PH, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
