Take Frequent Stock Splits As Sell Signal.(A)(INVESTOR'S CORNER)

Byline: Jonah Keri

When it comes to investor sentiment, few events seem to excite folks more than a stock split.

When a company announces a split, the stock is usually on its way up. Their holders are already happy, counting the paper gains they've made since they bought in. Now they get to own more shares! Strike up the band!

But before you start the parade, watch out if you see a series of big splits -- 2-for-1, 3-for-1 and the like -- over just a year or less. Stocks tend to split most often when optimism is running highest -- for that stock and the market.

Take these changes as your cue to sell shares. When good cheer reaches its peak, so does the market. The drops that follow among leading stocks can be crushing.

Splits show management's support for a company and its stock. Some firms will offer a split to lure more people in.

"Stock prices are considered more attractive under $100," said Alison Reynders, director of investor relations for optical gear maker JDS Uniphase. "It's got a perceived attraction, particularly from the individual investor standpoint."