How to survive a stock split?

[RudyNL]

The experts should decide if this is a feature or a bug; at least it is strange behavior.

I am using Yahoo Finance as my data source. You can select between two options

1. Close: The stock price at closing. That means the price is corrected for splits and reversed splits but not for dividend payments. This is the option "Yahoo Finance" for "Historical Quotes"
2. Adjclose: The adjusted stock price at closing. That means the price is corrected for both splits and reversed splits and for dividend payments. This is the option "Yahoo Finance (Adjusted Close) " for "Historical Quotes". In case of dividend payment, the stock prices before the payment are slightly lowered because of the advantage of the dividend payment. This is my preferred option for the historical performance analyses of a stock.

Note, Yahoo Finance is always correcting for splits and reversed splits. So you don't have to bother with that issue.

Select under "All Securities" the stock of your interest, for example Tetra Tech (TTEK). There is an option "Stock Split" under the pull down menu. This "Stock Split" is incompatible with the source data of Yahoo Finance, so don't use it !!! But if you are not using it, then you are having problems with historical transactions. In case of the 1:5 split of Tetra Tech (TTEK) all historical transactions before the split should be edited. That means the number of stocks should be multiplied by 5 and the price should be divided by 5 so that the transaction sum doesn't change. Now we are going to use the inconsistent behavior of the option "Stock Split".

What is stock split doing. Besides creating troubles it has a nice feature. All transactions before the split date are corrected. In case of a 1:5 split the number of stocks is multiplied by 5 and the price is divided by 5. If you are looking at graphs it is creating a discontinuity. The stock price is jumping by a factor 5.
Deleting the same stock split is doing nothing. The previous situation before the stock split is not reconstructed.

So to correct all your transactions before a stock split you have to perform two actions:

1. Use the "Stock Split" option from the pull down menu.
2. Immediately delete this stock split.
   After this action you have survived a stock split.

If you want to study this subject, use Tetra Tech (TTEK) or Cintas (CTAS) which have had recent splits.

[Morpheus1w3]

Well, what did you recommend to analyse?

It's common practice that historical quotes are recalculated after a stock split. My workflow in this case, use the PP stock split function to get the correct postings, delete existing quotes from the database and renew via Yahoo.

[pfalcon]

Where I saw with splits/reverse splits, PP's handling works well, and I personally don't see much what can be improved. Except maybe the initial dialog page where ratio is imported - the way it's presented it's a bit confusing, and it's easy to get reverse split instead of normal and vice-versa.

I didn't see a need to remove any existing historical prices - PP recalculates them well. And somehow handling of historical price feed by PP seems to be pretty smart - it doesn't overwrite older prices in its DB from feed (but does that for today's price), so you can make correction to 3rd-party provider's prices (e.g. Yahoo has regular errors), and they "stick".

[pfalcon]

Also, there's (now) fairly extensive section in the docs on splits: https://help.portfolio-performance.info/en/how-to/recording-stock-split/