Stock splits are often misunderstood. They don't change the fundamental value of a company; instead, they increase the number of shares available, making them more accessible to a broader range of investors.
It's similar to peeling and segmenting an orange. The orange remains the same, but the smaller pieces are more convenient to consume.
Stock splits spur investment and company growth. It's a 'rainmaking' business exercise. When stock levels reach record highs (NVIDEA for example), buying tapers. Splits make investing more affordable.
This technical adjustment -- a pure exercise in accounting gymnastics, really -- can generate excitement in the market, as it often signals a company's strong performance and growth potential. For those seeking to take advantage of the buzz around stock splits, here are two outstanding investments on the verge of stock splits right now.