Stock splits always seem to attract the attention of investors, and for good reason: They generally involve companies that have performed so well when it comes to revenue and profit growth that their shares have soared.

Investors love looking at these top performers' next big moves. But there are two practical reasons why investors monitor the market for stock splits.

First, stock splits can bring the price of a stock back down to earth, making it more accessible to a broader range of investors. When a stock splits, a company issues more shares to current investors. As a result, each individual share will trade at a lower level, but the company's overall market capitalization remains unchanged. Because the stock is trading at a cheaper level, more investors may be able to buy shares.

Continue reading

Source Fool.com