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About Dr. Joseph de Beauchamp
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You are here:  Experts > Money > Online Brokerage/Banking > Blue Chip Stocks > How will the 2:1 split affect EXC?

Blue Chip Stocks - How will the 2:1 split affect EXC?


Expert: Dr. Joseph de Beauchamp - 4/12/2004

Question
I am an amatuer investor. My strategy is loosely based on O'neil's CANSLIM trading system.  I make an attempt to research all stock investments to the full extent of my skillset before making every purchase.  I have been holding Exelon Corp. (EXC) for several years now and have considered it a solid long term stock.  They are set to split 2 for 1 on May 5 2004, and I am considering adding to my position.  In your opinion, how to you think this split will affect EXC's shareprice?  Thanks in advance for sharing your opinions/advice with me.

Answer
Stock seems to be making a new high. Many cover this stock or 13 with positive recommendations. I remember: buy low and sell high. It might be good for the long haul but it has not been this high in five years. As I always say: You cannot get hurt taking profits. Another good question here for you: Would you buy this stock at this price today or would you pay this much for the stock?

The stock split would have a neutral effect on the stock. You would get twice as many shares for half the price. I would NOT make investment decisions on the fact of an upcoming stock split. Some research shows a sight increase in share price to anticipate the stock split occurring, and then afterwards, a slight falling in share price. So, the effect is neutral.


Sincerely,

Dr. de Beauchamp

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