1:5 Stock Split & 5:1 Reverse Stock Split: Record Date This Week; Which Stock To Buy?

This week, investors will likely be looking at Colorchips New Media Ltd. and Kamdhenu Ventures Ltd., as Kamdhenu Ventures announced a 1:5 stock split, with Friday, June 14, 2024, set as the record date. However, Colorchips New Media has announced a reverse stock split at a 5:1 ratio, with the record date set for June 12th. In light of the aforementioned company actions, should prospective investors buy any stock?

Kamdhenu Ventures Stock Split Record Date

For the purpose of 1:5 stock split or sub-division / split of existing equity shares of the company from equity shares having a face value of Rs. 5/- each fully paid-up into equity shares having a face value of Rs. 1/- each fully paid-up, Kamdhenu Ventures has fixed Friday, 14th June, 2024 as the "Record Date".

"In order to enhance liquidity of the Company's equity shares and to encourage participation of small investors by making equity shares of the Company more affordable to invest," said Kamdhenu Ventures in a regulatory filing regarding the rationale behind the stock split.

Kamdhenu Ventures Share Price Target

"The demerged paints business arm of Kamdhenu Limited, Kamdhenu Ventures Limited, is focused on improving operational flexibility to pursue growth plans independently. Notably, the stock has delivered a return of 58.09% in a year but has not offered any dividend yield. The stock's current PE is 14.73, compared to the sector PE of 74.83, which suggests its undervaluation. Swing traders interested in entering this company stock may consider a buying range of Rs. 165-170 to chase a target price of Rs.185-250. I recommend holding the stock for 3-25 days while adhering to a stop loss of Rs. 140 to limit exposure and loss," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Colorchips New Media Reverse Stock Split

"Pursuant to the Regulation 42 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the Board of Directors of the Company at its meeting held on Wednesday, the 29th day of May, 2024, has fixed the Record Date on Wednesday, the 12th day of June, 2024, for determining the eligibility of Shareholders for the purpose of Consolidation of Equity Shares of the Company from Face Value of Rs.2/- each to Face Value of Rs.10/- each," said Colorchips New Media in a regulatory filing.

Colorchips New Media Share Price Target

"The integrated design solutions company Colorchips New Media Ltd is currently trading with an RSI of 42 at the monthly timeframe, suggesting a neutral condition in price movements. Notably, the PE ratio of this small-cap stock stands at -45, which is relatively undervalued against the average sector PE of 3.56. Those willing to capitalize on this momentum may consider buying at Rs. 4.10 for a target price of 5/6/7/9/10/11/12. However, they should note that the company has delivered one-year returns/losses of -45%. I recommend holding this stock for a period of 1-3 months and maintaining a strict stop loss of Rs. 3.90," commented V.L.A. Ambala.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.