Split Portfolio Signs up Ensign

04/22/2016 7:00 am EST


Neil Macneale III

Editor, 2 for 1 Stock Split

The drought in split announcements continues, and for the second month in a row there were no stock split candidate that meets of requirements, notes Neil Macneale, editor of 2-for-1 Stock Split Newsletter.

Skipping one month in our buy and sell routine — as a result of a lack of stock splits — can be tolerated because the “Stock Split Advantage” actually lasts for up to three years while our typical holding period is 30 months.

However, I decided skipping two months in a row was just too much and would be setting a precedent with unforeseen consequences.

Therefore, to choose a company for this month’s addition to our model portfolio, I returned to the list of previous split announcements, going back to a stock I passed up on last December.

Ensign Group (ENSG) has improved its ranking score since first appearing on the split list last December. Its price has fallen a bit and the health care sector overall has also declined.

These movements have improved ENSG’s ranking score in absolute terms and also relative to the other potential candidates for our portfolio.

ENSG, a holding company, provides skilled nursing, rehabilitation services, home health care, hospice care, assisted living, and urgent care services through its subsidiaries.  

Many of Ensign’s services are rather labor intensive and require a skilled and disciplined management to be profitable.

ESGN’s returns and balance sheet numbers are significantly superior to their competitors in these areas. As the baby boomers age, this business can only grow.

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By Neil Macneale, Editor of 2-for-1 Stock Split Newsletter

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