Investors seem to love stock splits, but do they matter?

— -- Q: Is there a way to find about stock splits shortly after they happen?

A: There are no free lunches on Wall Street. But the next best thing, to some beginning investors, are stock splits.

Stock splits are largely a bookkeeping exercise. But they're magical to some investors who love the idea that they'll have more shares without having to put down any more money.

In a standard stock split, a company will increase its number of shares outstanding. At the same time, it will chop the per-share price of its stock. The net result? The total value of the company stays the same, but the company is sliced into a greater number of pieces. This means that from a valuation standpoint, a stock split is meaningless.

Why do many individual investors love stock splits so much? At the basic level, many cherish the fact they suddenly find themselves owning a position of 200 shares of a stock, while they only bought 100. They don't seem to mind that the $50-a-share price before the spilt is $25 afterwards.

Some suggest a stock split bodes well for investors because management wouldn't cut the stock price if they expected trouble immediately ahead. Others think a stock might have better trading and price action if there are more shares outstanding, and those shares are more attractively priced, on a per-share basis, for investors.

Regardless of who is right about splits, investors who want to track them have several options. One method is to sign up for a free stock-split notification service, such as StockSplits.net, and you'll be e-mailed when significant companies announce stock splits.

You should also keep an eye on the Money section of USATODAY.com. When large companies announce stock splits, the events are covered in the news. You can also search for news about stock splits provided by USATODAY.com using this custom search: http://www.bing.com/search?q=site%3Awww.usatoday.com+stock+split&src=ie9tr

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz