For the better part of the last three decades, investors have had a next-big-thing technology or innovation to captivate their attention, and their money. Over the last two-plus years, the evolution of artificial intelligence (AI) has been Wall Street's hottest trend.
But it's not the only trend responsible for lifting the iconic Dow Jones Industrial Average, broad-based S&P 500, and growth stock-inspired Nasdaq Composite to new highs in 2024 (and early 2025 for the S&P 500). Investors have demonstrated a willingness to flock to public companies completing stock splits.
A stock split is an event that allows a company to alter its share price and outstanding share count without having any effect on its market cap or underlying operating performance. Though splits are purely cosmetic, they can send quite the message.
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For instance, investors tend to shy away from businesses enacting reverse splits. This type of split is designed to increase a company's share price and correspondingly lower its share count by the same factor. Companies undertaking this type of split are often struggling and attempting to stave off a possible stock exchange delisting.
On the other hand, investors flock to public companies completing forward splits. This variety of stock split makes shares more nominally affordable for everyday investors and/or employees who can't purchase fractional shares through their broker. Businesses that have to conduct a forward split to make their shares nominally cheaper typically have a knack for out-innovating their peers and continuously growing their operations.
Last year, more than a dozen brand-name companies announced and completed a forward split, including two trillion-dollar AI juggernauts: Nvidia and Broadcom.
In 2025, only three brand-name companies have announced and/or completed a forward split. But one of these three stocks -- which has gained approximately 57,000% since its initial public offering (IPO) in April 1993 -- makes for a no-brainer buy in June.
2025's first completed stock-split stock is a phenomenal company, but isn't the best buy for June
While there have been countless reverse splits thus far in 2025, only one high-profile company has announced and completed its split: wholesale industrial and construction supplies giant Fastenal (FAST 1.50%).
On April 23, Fastenal's board approved a 2-for-1 forward split, which marked the ninth time in the last 37 years the company's stock would undergo a split. It became official after the close of trading on May 21, with Fastenal's share price nominally declining from around $82 per share to $41.
The reason Fastenal has split its stock nine times since its IPO in August 1987 is because its shares have risen by close to 210,000%, including dividends paid (what's known as "total return"). This vast outperformance is a function of Fastenal taking advantage of the nonlinearity of economic cycles, as well as the company fully integrating itself into its customers' supply chains.
With regard to the former, Fastenal is a highly cyclical business that ebbs-and-flows with the health of the U.S. and global economy. Since the end of World War II in September 1945, the average U.S. recession has lasted around 10 months, while the typical period of expansion has endured for approximately five years. This welcome disparity increases demand for Fastenal's products over time.
Fastenal's managed inventory solutions are also playing a critical role in its long-term success. The on-site placement of internet-connected vending machines (FASTVend) and its FASTBin inventory technology helps Fastenal better understand the supply chain and reordering needs of its customers.
Though Fastenal's future remains bright and current investors should expect shares of the company to be higher three-to-five years from now, its forward price-to-earnings (P/E) ratio of 32 isn't inexpensive. This is why another stock-split stock makes for a better buy in June.
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Wall Street's biggest stock-split stock has shifted into overdrive
The stock-split stock investors can confidently buy hand over fist in June, regardless of what near-term volatility may await Wall Street, is auto parts supplier O'Reilly Automotive (ORLY -0.93%).
Even though O'Reilly isn't the largest public company by market cap to announce a stock split in 2025 -- that honor currently belongs to Interactive Brokers Group -- its 15-for-1 forward split is the biggest on the basis of magnitude among all forward splits this year.
O'Reilly announced its intent to split back in mid-March, with shareholders giving it the green light to proceed at the company's annual meeting on May 15. Shares will retreat from more than $1,370 per share, as of this writing, to closer to $92 per share after the close of trading on June 9.
What makes O'Reilly Automotive stock so special is that it has macroeconomic and company-specific factors working in its favor.
On a broader scale, auto parts suppliers have benefited from consumers hanging onto their vehicles longer than ever before. A newly released report from S&P Global Mobility finds that the average age of cars and light trucks on U.S. roadways hit an all-time high of 12.8 years in 2024. That's up from an average age of 11.1 years in 2012.
Working in tandem with the persistent aging of vehicles on American roadways is the fact that auto loan interest rates have spiked higher in recent years. The typical 60-month loan for a new car has jumped from sub-4% in late 2021 to between 7% and 8% over the last two years. The incentive is for owners to hang onto their vehicles longer, which is great news for auto parts suppliers like O'Reilly that provide parts and accessories to drivers and mechanics.
But there's more to like than just macro factors that benefit all auto parts suppliers. For instance, O'Reilly's unique hub-and-spoke distribution model has been resonating with its customers. O'Reilly closed out 2024 with 31 distribution centers and almost 400 hub stores. These hubs can get more than 153,000 stock keeping units to local retail stores on a same-day or overnight basis.
In addition, O'Reilly Automotive has one of the most-effective share-repurchase programs among publicly traded companies. Since its buyback program was initiated in January 2011, the company has spent north of $25.9 billion to repurchase 59.4% of its outstanding shares. Businesses with steady or growing net income that repurchase a substantial percentage of their outstanding shares tend to increase their earnings per share (EPS) and make their stock more fundamentally attractive to investors.
With multiple tailwinds in its sails and its shares priced at a reasonable 27 times forward-year earnings, O'Reilly stock can head notably higher.
