Around
the same time the Q2 and first half results came out, Cognex also
announced a two-for-one stock split.
Interesting
decision. Why would they do this?
Well
my reading suggests the idea is to make the stock more attractive to
small investors. As such, a stock is often split after a big run up
in price. And Cognex has certainly seen that recently, as this chart,
lifted from Yahoo finance, confirms.
(The
red line is the performance of the NSADAQ over the same last six
months.)
There’s
also a school of thought that says the sum of parts will be greater
than the whole after a split, perhaps because the lower price makes
it more attractive to small investors, or because it’s seen as a
sign of confidence, or possibly both.
I
do have to wonder though if there’s a link to the decision to
pre-pay dividends last year. A kind of “here’s a crumb” for the
investors. (Although you’d think the capital growth would put a
smile on their faces.)
And
then there’s the question, in my mind anyway, of what caused the
run up in the stock price at the beginning of July. Did I miss some
especially significant news about Cognex?
Guess
I’ll just have to wonder.
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