spin off
POWER CORP. $33 (Toronto symbol POW; Conservative- Growth Dividend Payer Portfolio, Finance sector; Shares outstanding: 415.3 million; Market cap: $13.7 billion; Dividend yield: 3.9%; Dividend Sustainability Rating: Above Average; www. powercorporation.com) is a Montreal-based holding company that owns its financial assets through a 65.7% stake in Power Financial....
Wyndham Worldwide plans to spin off its hotel operations. The stock is up 53% over the last year, and for now, we see it as a hold.
But overall, we think that spinoffs are the closest thing you can find to a sure thing for two main reasons:
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Companies do spinoffs when they feel now is not a good time to sell....
But overall, we think that spinoffs are the closest thing you can find to a sure thing for two main reasons:
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Companies do spinoffs when they feel now is not a good time to sell....
5 tips from our TSI Takeover Target Rating system for even better results with spinoff investing
NORDSTROM INC. $39 (New York symbol JWN; Consumer sector; Shares outstanding: 166.2 million; Market cap: $6.5 billion; Takeover Target Rating: Medium; Dividend yield: 3.8%; TSINetwork Rating: Average; www.nordstrom. com) owns and operates 354 upscale department stores in the U.S....
HONEYWELL INTERNATIONAL INC. $146 (New York symbol HON; Manufacturing Sector; Shares outstanding: 761.8 million; Market cap: $111.2 billion; Takeover Target Rating: Medium; Dividend yield: 1.6%; TSINetwork Rating: Average; www.honeywell.com) is a diversified technology firm operating in four main segments: Aerospace (38% of sales); Home and Building (27%); Performance Materials (24%); and Safety and Productivity (11%).
The company is the target of several activist investors, including Dan Loeb’s Third Point LLC hedge fund....
The company is the target of several activist investors, including Dan Loeb’s Third Point LLC hedge fund....
HUDSON’S BAY CO. $11 (Toronto symbol HBC; Consumer sector; Shares outstanding: 182.7 million; Market cap: $2.0 billion; Takeover Target Rating: Highest; Dividend yield: 0.4%; TSINetwork Rating: Specualtive; www. hbc.com) operates Canadian retail chains Hudson’s Bay and Home Outfitters; HBC Europe; Lord & Taylor; Saks Fifth Avenue and Saks Fifth Avenue Off 5th.
The retailer seems to be taking some of the advice of activist investor Jonathan Litt, who holds roughly 5% of the company....
The retailer seems to be taking some of the advice of activist investor Jonathan Litt, who holds roughly 5% of the company....
A U.S. company may opt for a Reverse Morris Trust when it wants to spin off unwanted assets yet allow that spinoff to quickly enter a pre-arranged merger.
Selling the assets directly to an identified buyer usually can saddle the parent company with a sizable tax bill....
Selling the assets directly to an identified buyer usually can saddle the parent company with a sizable tax bill....
What is a spinoff and why would you want to own one? Studies show that spinoffs often outperform comparable stocks
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WYNDHAM WORLDWIDE $109 (New York symbol WYN; Consumer sector; Shares outstanding: 102.8 million; Market cap: $11.2 billion; Dividend yield: 2.1%; TSINetwork Rating: Extra Risk; Takeover Target Rating: Medium; www.wyndhamworldwide.com) plans to spin off its hotel business as Wyndham Hotel Group....
We think that spinoffs are the closest thing you can find to a sure thing for two main reasons:
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Spinoffs involve a lot of work and legal fees....
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Spinoffs involve a lot of work and legal fees....