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Reverse Stock Splits Are Usually Good for Investors: Report

http://www.cnbc.com/id/42212417

 Published: Tuesday, 22 Mar 2011 | 3:07 PM ET
By: Lori Spechler | Senior Editor, CNBC

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:
Reverse Stock Splits
Company
Stock Split
Effective Date
Pct. Change 1yr
Lab Corp. of America (LH)
1 for 10
5/4/00
121.49%
Raytheon (RTN)
1 for 20
5/15/01
51.64%
Titanium Metals (TIE)
1 for 10
2/18/03
350.95%
Priceline.com (PCLN)
1 for 6
6/16/03
9.71%
Intuitive Surgical (ISRG)
1 for 2
7/1/03
29.78%
CBS Corp. (CBS)
1 for 2
1/3/06
20.61%
JDS Uniphase (JDSU)
1 for 8
10/17/06
-5.48%
Tyco (TYC)
1 for 4
7/2/07
-25.00%
Discovery Comm (DISCA)
1 for 2
9/18/08
114.34%
Time Warner Cable (TWC)
1 for 3
3/13/09
90.32%
Time Warner Inc. (TWX)
1 for 3
3/30/09
84.87%
American Intl. Group (AIG)
1 for 20
7/1/09
87.39%
E*Trade Financial (ETFC)
1 for 10
6/2/10
2.80%
Motorola Solutions (MSI)
1 for 7
1/4/11
4.83%
Source: Birinyi Associates