When a company such as PBIP 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 PBIP split history from start to finish, an original position size of 1000 shares would have turned into 944 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into PBIP shares, starting with a $10,000 purchase of PBIP, presented on a split-history-adjusted basis factoring in the complete PBIP split history.

About PBIP

Prudential Bancorp is a bank holding company. Through its subsidiary, Prudential Savings Bank, Co. is primarily engaged in accepting deposits from the general public and using those funds to invest in loans and securities. These funds are mainly used for the origination of various loan types including single-family residential mortgage loans, construction and land development loans, non-residential or commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans and consumer loans. Co. provides a variety of deposit accounts including checking, both interest-bearing and non-interest-bearing, money market, savings and certificate of deposit accounts. According to our PBIP split history records, PBIP has had 1 split.

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