spin off

Alphabet, the owner of the Google Internet search engine and our long-time favourite among the top U.S. technology stocks, is down roughly 20% since the start of 2022.

That drop is partly due to a weaker-than-expected revenue outlook from Snap Inc. (New York symbol SNAP), the owner of the popular Snapchat online messaging service....

REKOR SYSTEMS INC., $2.87, symbol REKR on Nasdaq, provides, through its Rekor One Intelligent Platform, licence plate recognition and security solutions. It offers systems for surveillance, electronic toll collection, parking operations, and traffic management....

These legacy industrial conglomerates are now breaking up into smaller firms. Eliminating their “holding company discounts” should unlock value for shareholders. However, ABB has a brighter short-term outlook than GE.


ABB LTD. ADRs $30 is a buy. This Swiss-based company (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.0 billion; Market cap: $60.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.abb.com) plans to narrow its focus to its main electrification and automation businesses.


Under that strategy, the company will sell or spinoff its turbocharging business (called Accelleron) later this year....

Pharmaceutical giant GlaxoSmithKline recently rejected a takeover offer from Unilever for its consumer drug business and will continue with its original plan to spin it off as a separate company.


The spinoff will let Glaxo better focus on its main prescription drug and vaccine operations....

These two iconic U.S. conglomerates are using spinoffs to unlock their holding company discount. We feel these moves will ultimately succeed, but prefer Johnson & Johnson for your new buying.


JOHNSON & JOHNSON $176 is a spinoff buy. The company (New York symbol JNJ; Consumer sector; Shares outstanding: 2.6 billion; Market cap: $457.6 billion; Dividend yield: 2.6%; Takeover Target Rating: Medium; www.jnj.com) operates through three major businesses: Pharmaceutical (55% of 2021 revenue) makes anti-infective, antipsychotic, contraceptive, dermatological, and gastrointestinal medicines; Medical Devices (29%) sells a range of orthopedic, surgical, cardiovascular, sterilization, diabetic, and vision-care devices; and Consumer Health (16%) makes over-the-counter products such as Johnson’s baby-care items, Band-Aid bandages, Tylenol and Motrin painkillers, Listerine mouthwash, and Neutrogena skin cream.


The company still plans to spin off its Consumer Health business as a separate firm in 2023.


Meantime, in the quarter ended April 3, 2022, Johnson & Johnson’s sales rose 5.0%, to $23.43 billion from $22.32 billion a year earlier....

WESTERN DIGITAL CORP. $59 is a hold. The company (Nasdaq symbol WDC; Manufacturing sector; Shares outstanding: 313.2 million; Market cap: $18.5 billion; No dividend paid; Takeover Target Rating: Medium; www.westerndigital.com) develops, makes and sells hard-disk drives, which are mainly used in desktop computers, notebook computers, business applications and consumer electronics.


Activist investor Elliott Management (which owns about $1 billion worth of Western Digital shares) now wants the company to spin off its NAND flash memory operations as a separate company....

The toy industry has suffered in the past few years as COVID-19 shut down retail stores. Rising raw material costs and shipment delays have also hurt earnings. The easing pandemic and the opportunity to build back even stronger earnings is why activist investors are now targeting toymakers Hasbro and Mattel, and their top brands.


HASBRO INC....

BROOKFIELD ASSET MANAGEMENT INC. $59 is a hold. The company (Toronto symbol BAM.A; Finance sector; Shares outstanding: 1.6 billion; Market cap: $94.4 billion; Dividend yield: 1.2%; Takeover Target Rating: Lowest; www.brookfield.com) is an asset manager that controls firms in the real estate, renewable power, infrastructure and private equity industries.


The company plans to spin off its asset management business into a separate, publicly listed company....

SUNCOR ENERGY INC. $46 is a buy. The company (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.44 billion; Market cap: $66.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.1%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands....

FIDELITY NATIONAL FINANCIAL INC. $43 is a hold. The company (New York symbol FNF; Finance sector; Shares outstanding: 283.6 million; Market cap: $12.2 billion; Dividend yield: 4.1%; Takeover Target Rating: Medium; www.fnf.com) is a Florida-based provider of title insurance and home warranties to the real estate and mortgage industries.


The company now plans to set up its life insurance subsidiary—F&G Annuities & Life Inc.—as a separate, publicly traded firm.


Under the plan, it will hand out 15% of its F&G shares to its own investors as a special dividend in the third quarter of 2022....