We Still Like These Four Spinoffs

Article Excerpt

In a traditional spinoff, a company sets up a subsidiary as a separate company, then hands out stock in the new company to its stockholders as a special dividend. In many cases, the parent company will sell stock to the public ahead of the final spinoff date to establish a market for the new shares. As we’ve often pointed out, most spinoffs lead to above-average results for a period of years— for both the parent company and the company that gets created and spun off. We still see these four spinoff stocks as buys, but only for aggressive investors. BROADRIDGE FINANCIAL SOLUTIONS INC. $23 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding; 140.1 million; Market cap: $3.2 billion; WSSF Rating: Extra risk) was a subsidiary of Automatic Data Processing Inc. (ADP) until April 2, 2007. ADP investors received one Broadridge share for each ADP share held. Broadridge offers services to the investment industry in three main areas: investor communications; securities…