When a company such as NVSL conducts a reverse share split, it is usually because shares have fallen to a lower per-share pricepoint than the company would like. This can be important because, for example, certain types of mutual funds might have a limit governing which stocks they may buy, based upon per-share price. The $5 and $10 pricepoints tend to be important in this regard. Stock exchanges also tend to look at per-share price, setting a lower limit for listing eligibility. So when a company does a reverse split, it is looking mathematically at the market capitalization before and after the reverse split takes place, and concluding that if the market capitilization remains stable, the reduced share count should result in a higher price per share.

Looking at the NVSL split history from start to finish, an original position size of 1000 shares would have turned into 997.7 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into NVSL shares, starting with a $10,000 purchase of NVSL, presented on a split-history-adjusted basis factoring in the complete NVSL split history.

About NVSL

Naugatuck Valley Financial is a stock savings bank holding company. Through its subsidiary, Naugatuck Valley Savings and Loan, Co. provides consumers and businesses with deposit and lending products in the Greater Naugatuck Valley region of southwestern Connecticut. Co. provides one- to four-family residential mortgage loans, multi-family and commercial real estate loans, construction loans, commercial business loans and consumer loans. Co. also provides a selection of deposit instruments, including checking accounts, money market accounts and regular savings and health savings accounts. As of Dec 31 2014, Co. had total assets of $495.1 million and total deposits of $373.5 million. According to our NVSL split history records, NVSL has had 1 split.

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