SAIA - This Stock-Split Stock Is Up 269% Over the Past 5 Years. Here's Why It's a Buy Today.
2024-06-29 11:02:00 ET
Motor carrier Old Dominion Freight Line (NASDAQ: ODFL) has quietly put together a remarkable run. Shares in its stock have increased over 13,000% since 2003 on a split-adjusted basis. Stock splits have been an important aspect of Old Dominion's rise. The company has split its shares five times since 2003. Most recently, shares were split 2-for-1 in March 2024.
While stock splits are often celebrated, since they tend to come on the heels of large increases in a company's stock price, it's important to remember that stock splits don't meaningfully alter the fundamentals of a stock investment . By increasing the number of shares, the stock price is reduced in the same ratio, and all of a company's per-share performance metrics are also reduced. A shareholder is no better, or worse, off after a stock split than just prior to the transaction. In the case of Old Dominion, the stock split is a bit of a distraction from the fundamentals of the company, which are very strong.
It can seem strange to say that a company is undervalued when shares in its stock are up over 250% in the last five years. However, valuation can be relative, so when assessing the trucking company for investment, it's useful to compare Old Dominion to its competition. Although smaller in market capitalization, Saia, Inc . (NASDAQ: SAIA) is another successful, growing, mid-sized, less-than-truckload shipping solution. Saia has also had an impressive bull run, increasing over 600% since March 2020.
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This Stock-Split Stock Is Up 269% Over the Past 5 Years. Here's Why It's a Buy Today.