A holding company discount is a well-known phenomenon in finance. It represents a special kind of hidden asset and source of potential profit for investors in holding companies. A holding company is a company that owns all or a substantial part of a variety of different businesses. These businesses may be private companies, or publicly traded. Holding companies may own all, or a majority or a minority, of companies in which they invest. The one thing most holding companies have in common is that they trade for less than the combined value of their holdings. A holding company discount comes into play when holding companies sell assets or break themselves up into their constituent parts. In other words, holding companies can usually sell their assets for fair market value, rather than at a discount. In addition, fair market value may turn out to be more than analysts figured they were worth. Savvy investors can take advantage of a holding company discount and benefit from the fact that even without a break-up, buying a holding company at a discount to its asset value puts more assets to work for you for each dollar you invest. Investors should note, though, that this holding company discount strategy can take years if not decades to be realized, so it's only for long-term investors. At TSI Network, we recommend using our three-part Successful Investor philosophy for long-term investing:
Discover how to put an extra strength in your portfolio with our specific advice on how to identify high-quality dividend stocks. It's all in our newly updated report, Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing. And it's yours FREE!
In a sudden and deep stock-market drop like the one of the past few weeks, it’s all too easy to respond impulsively or go to extremes. You may feel a temptation to sell all your stocks and “wait for things to settle down” before going… Read More
MCKESSON CORP. $136 is a buy for spinoff gains. The company (New York symbol MCK; Consumer sector; Shares outstanding: 177.1 million; Market cap: $24.1 billion; Dividend yield 1.2%; Takeover Target Rating: Medium; www.mckesson.com) is the largest wholesale drug distributor in the U.S. and Canada. It also operates drugstores in… Read More
Historically, we have recommended few pharmaceutical stocks for our readers’ portfolios. That’s because those companies must continually invest large sums to develop new drugs as their older products lose their patent protection. Even then, there’s no guarantee those new drugs will repeat past successes.
However, Merck’s… Read More
Stock prices have dropped sharply in anticipation of a much wider spread of the coronavirus, and the deep economic setback that could result from its spread. That could happen—no one can predict the future. However, most sharp market downturns are temporary. Due to modern medicine… Read More
Spinoffs are often seen as an effective way for a holding company to eliminate its “holding company discount.” That discount is usually evident in the stock price of a company that holds a variety of assets, or that invests in a number of businesses.
As well,… Read More
If you are looking for good assets for conservative investors, keep in mind that stocks with holding company discounts and hidden assets in retail brands or real estate can lead to unlocked value
A holding company discount is a well-known phenomenon in finance. It represents a.. Read More
In addition to our feature stock this month BCE, we’re presenting you with many more ways to boost your returns and temper your risk.
For example, Suncor remains a great pick for the Resources portion of your portfolio. As an integrated oil producer, which both produces crude and… Read More
Improved sales of life insurance, investment funds and other financial products drove the 27.9% jump in revenue for this company during the most-recent quarter.
A recent company reorganization should further unlock value for shareholders, already receiving a 4.9% dividend yield.
The stock nonetheless trades at just 10.4… Read More
Investors tend to value simplicity over complexity in their stock purchases. Power Corp. offers you top assets, but its complex holding company structure draws attention away from its investor value. Now, though, Power plans a major reorganization that’s a plus for investors. It will simplify… Read More
Higher output and rates—plus improved efficiency and lower income taxes—led to a 17.9% jump in earnings for this utility in the most-recent quarter.
The company is also selling a major Canadian transmission line to lower its debt. Its stock trades at just 17.6 times the 2019… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.
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