New research indicates that reverse stock splits are usually good for investors.
According to a new report by Cleve Rueckert, Birinyi Associates senior equity strategist, there have been 14 stocks in the S&P 500 since 2000 that have undergone a reverse stock split. Of those fourteen stocks, twelve were higher one year after the effective date of the reverse split, two were lower. The average gain was a gigantic 62.55 percent.
The best performer: Titanium Metals . Titanium Metals rallied 350% in the year following the effective date of its 1:10 reverse stock split on February 18th, 2003.
The worst performer: Tyco . Tyco lost 25% in the year following the effective date of its 1:4 reverse stock split on July 2, 2007.
Citigroup announced a 1:10 reverse stock split Monday, effective after the close of trade May 6, 2011.
Here is the full list:
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