How to Profit from Special Situations
There has been research done that shows that companies who declare stock splits or special dividends do well for a period of time after they make these announcements. For instance, in June 2006 two companies made these types of declarations and their stocks rose.
The first company was Logitech. They rose 44% after making this type of a declaration. Secondly, Infosys rose an impressive 54% after their declaration. Just recently U.S. Global Investors’ (GROW) stock almost doubled since they announced their stock split at the end of 2006. This gain of 92% took place in less than a month.
Of course, there are also spinoffs that are having interesting events as well. In fact, spinoffs usually do better than their corporate parents. An example of this is Chipotle Mexican Grill (CMG), which is a spinoff from McDonalds (MCD). When CMG went public their stock sold for $22 per share. Now their stock is up 145% to $54.85. Of course, their parent company, MCD, is also a good investment.
These special situations can definitely help you outperform your competitors. Therefore, you should really look for a web site where you can be notified about these special events as it will be very beneficial.