Reverse that split!

Q What's a reverse stock split? — P.N., Kenosha, Wisconsin

A It's the opposite of a regular stock split, which will increase your number of shares at a specified point in time while reducing their price proportionately.

For example, if you have 100 shares of Scruffy's Chicken Shack (ticker: BUKBUK), priced at $60 each, a 2-for-1 split will turn that position into 200 shares, priced at $30 each. Note that the total value of your holding doesn't change. Both 100 times $60 and 200 times $30 amount to $6,000.

A reverse split goes in the opposite direction. A 1-for-10 reverse split, for example, will turn your 100 Scruffy's shares into 10 shares, priced at $600 each — still totaling $6,000.

Reverse splits tend to be executed by struggling companies to prop up their low stock prices, perhaps to avoid getting delisted from a stock exchange that has minimum stock price requirements.

Q When I read articles about companies, I sometimes see very different opinions on various stocks. One expert may say buy, while another says sell. What should I think?

— D.T., Brimfield,

Massachusetts

A Unanimous opinions about any stock are rare. Each person evaluating a company can come away with a different opinion about its prospects and estimated trajectory. Even the best investors and analysts are sometimes wrong. They can vary in what they're looking for in a stock, too. One might be seeking undervalued stocks, while another might think a high-flyer is likely to fly higher. Some may be looking for great long-term performers, while others want a quick profit. Ideally, gather some opposing opinions, consider their arguments, do your own research and ultimately make up your own mind.