(NYSE: WMT) surprised investors earlier this year when the retail giant announced a 3-for-1 stock split, its first split in more than 20 years.

The news was unexpected. It's been a long time since Walmart's last split in 1999, and its share price wasn't exceedingly high. Investors responded well to the news, as Walmart explained that it decided to split its shares to make it easier for employees to buy the stock.

It's important to understand that stock splits don't create any fundamental value for investors. They simply divide the corporate pie into more pieces. There is some evidence that stock splits can lead to gains over the next year, but that's likely because they reflect momentum that already exists in the business, as splits usually come when a stock is at an all-time high.

Continue reading

Source Fool.com