HOKA shoes are not cheap, but if you happen to hold the company's stocks, you can buy six pairs at the price of one share. However, this deal will end soon. Deckers Outdoor, the parent company of French sports brand HOKA(DECK.N), plans to split its $920 stock into 1-for-6 in early September. If the price remains the same, one share of Deckers stock can buy a pair of shoes at $153 each, excluding tax. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Of course, this is a silly arithmetic, because anyone who owned the stock before the split will have the same amount after the split. But $150 stocks do look cheaper than $900 stocks, and this kind of fuzzy logic is the reason for the wave of stock splits in the market.

Dozens of big companies have split their stocks this year, including Broadcom(AVGO.O), Chipotle Mexican Grill(CMG.N), Nvidia(NVDA.O) and Walmart(WMT.N). Companies currently split include Cintas(CTAS.O), Lam Research(LRCX.O), and Sony(SONY.N).

The booming bull market has pushed many stocks to triple digits, creating more split candidates. Currently, more than 100 companies in the S&P 500 index have stock prices over $250, including Visa(V.N), FedEx(FDX.N), and Home Depot(HD.N). The stock prices of companies like BlackRock(BLK.N), Costco(COST.O), and Netflix(NFLX.O) are all over $500.

Companies often split stocks to make them look more affordable, and $50 stocks look more attractive than $500 ones. This trend soared during the dot-com bubble of the 1990s, gradually faded after the global financial crisis of 2008-09, and now revived in a lengthy market rebound.

But be careful in your split tour. A price drop does not mean a cheaper stock, they just slice the same loaf. Some of the best stocks in history have avoided splits: Warren Buffett has never split Berkshire Hathaway(BRK.N) A shares. In addition, companies often split after a big rise; splits can signal a top in stock prices, followed by a curse of high expectations.

Quincy Krosby, chief global strategist at LPL Financial, said that investors should be cautious and pay more attention to returns. She added that while stock splits can expand the investor base, they are of no help in changing the company's fundamentals.

Companies often cite stock splits as a positive move for investors and employees. For example, Chipotle Mexican Grill said in March that the stock split (then trading at about $2,800 per share) would make it "easier for employees and a broader set of investors to have access to the stock." Deckers said virtually the same thing in July, claiming that its split "will make our stock more affordable and attractive to a wider range of potential investors." Deckers also cited increased liquidity as a reason for the split, claiming that the split would increase trading volume and "have a positive impact on the value of the stock."

Investors often see splits as a positive signal from management about the company's prospects. According to a study by Columbia University, stocks will be bid up in anticipation of increased expected returns, and analysts will offer support; after a split is announced, they tend to raise earnings per share expectations by about 2%. At least a year of this effect lasts: according to Bank of America research, the median return for companies announcing splits in the year after announcement is 25%, compared with 11.9% for the S&P 500 index.

Other research has been mixed. Morningstar recently studied one-year returns for S&P 500 companies that have been split over the past decade. The data revealed no overall trend, suggesting that "stock splits are a cosmetic phenomenon," but there were a few prominent names: Dexcom(DXCM.O), Paccar(PCAR.O), and Charter Communications(CHTR.O) all saw returns of over 40% after splitting.

FNBO Wealth Management's chief investment officer Kurt Spieler said, "Splitting stocks may provide a temporary lift to the stock price, but it is not important in the long run."

Of course, what matters is whether a company's sales, earnings, dividends and other metrics continue to meet or exceed Wall Street's forecasts. A drop in share price after a split may increase the liquidity and trading activity of a stock, but if earnings don't meet expectations, these effects will gradually disappear.

More important than price are ratios, such as PE or P/S ratios. Splitting simply divides the total number into the same per-share ratio on a broader basis. For example, Berkshire Hathaway's class B shares trade at $438. This may seem expensive, but with the company's expected EPS of $19 this year, the stock has a PE ratio of 23, which is basically the same as the S&P 500 PE ratio.

For high-priced stocks, both pre-split and post-split stock calculations are punitive. Chipotle Mexican Grill looks cheaper now, but this has nothing to do with the 1:50 split. Instead, it reflects the fact that its PE ratio has fallen from a high of 56 to a low of 47, a 15% drop since late June. This decline has occurred against the backdrop of a sharp drop in momentum stocks, which almost exactly coincided with the effective date of the Chipotle Mexican Grill split.

In fact, the retail investment market no longer needs to split stocks. Fractional shares are now widely available. If you want to invest $100 in Booking Holdings, a stock worth $3,700, you can buy that much stock through Fidelity, Charles Schwab (SCHW.N), and other brokers.

But investors' psychology may help keep split shares alive. Nancy Tengler, chief investment officer at Laffer Tengler Investments, says owning fractional shares is less satisfying than having all of the shares at a lower price. She says, "People like the idea of having a lot of shares. Whole shares are better than fractional shares."

Tengler's firm holds stocks such as Chipotle Mexican Grill, as well as other high-priced stocks she sees as potential candidates for splits, such as Microsoft (MSFT.O), Goldman Sachs (GS.N), Adobe (ADBE.O), ServiceNow (NOW.N),

Tengler owns these stocks not because she thinks they will split; she says all of them are market-leading companies with strong earnings, healthy balance sheets, and reasonable valuations.

This doesn't mean that a split is a sell signal. Companies that have strong momentum and high prices often split their shares. Wealth Consulting Group's CEO Jimmy Lee, who owns Nvidia, says, "Stock splits often come from larger and well-performing companies with high prices."

One reason companies split their shares is to enter the Dow Jones Industrial Average. Unlike the S&P 500, which is market capitalization weighted, the Dow Jones Industrial Average is price weighted. Companies like Apple (AAPL.O) and Amazon (AMZN.O) entered the index after splitting their stocks; given Intel's (INTC.O) relatively low stock price, Nvidia could now be a good candidate to replace Intel.

Other potential candidates include Meta Platforms (META.O), Eli Lilly and Co (LLY.N), and Costco, all of which are large companies with high stock prices and a leading position in the market. If they split their stock, they could become candidates for the Dow.

Be careful with stocks on the edge of splits. Deckers Outdoor (DECK.N), for example, has risen 38% this year and has an expected 2025 earnings multiple of 26 times. Although the split may cause the stock to soar in the short term, HOKAs must continue to launch new products to maintain their strong performance.