spinoffs
A spinoff takes place when a company decides to get rid of a portion of its asset base, possibly because it wants to focus its activities elsewhere, but is unable to sell the assets for a price that it feels reflects their value. Instead, the parent company sets the assets up as a separate company, then hands out shares in that publicly listed firm to its current investors.
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Carrier has soared 258% and Otis is up 86% since Raytheon Technologies Corp. (New York symbol RTX), formerly United Technologies (old symbol UTX) spun them off in April 2020. For each UTX share they held, investors received 0.5 of a share in Otis and 1 share in Carrier.
Both spinoffs should continue to move higher over the next few years, particularly as the new U.S....
Both spinoffs should continue to move higher over the next few years, particularly as the new U.S....
While most spinoffs pay off for investors over time, some deliver big gains right away while others can go into a deep slump. Here are two recent spinoffs moving in opposite directions.
GXO LOGISTICS INC. $88 is a spinoff buy. The company (New York symbol GXO; Manufacturing sector; Shares outstanding: 114.6 million; Market cap: $10.1 billion; No dividends paid; Takeover Target Rating: Medium; www.gxo.com) is the world’s largest contract logistics services provider....
Download our free report and discover 7 stocks due for big gains after investors use tax-loss selling to cut their Canadian capital gains tax.
Dear Inner Circle member,
Alcon proved itself resilient during widespread COVID-19 lockdowns in 2020. The stock dropped along with the market in March 2020, but quick recovered. The shares then moved sideways for most of the year—but in 2021, the stock has risen steadily to new all-time highs.
At current prices, Alcon is not inexpensive in relation to this year’s earnings....
Alcon proved itself resilient during widespread COVID-19 lockdowns in 2020. The stock dropped along with the market in March 2020, but quick recovered. The shares then moved sideways for most of the year—but in 2021, the stock has risen steadily to new all-time highs.
At current prices, Alcon is not inexpensive in relation to this year’s earnings....
Swiss pharmaceutical giant Novartis spun off Alcon in 2019. And as we’ve said many times before, spinoffs are the closest thing you can find to a sure thing, regardless of the market’s rise and fall.
The stock is already up over 108% from its March 2020 lows, but we think it can go much higher....
The stock is already up over 108% from its March 2020 lows, but we think it can go much higher....
Spinoffs remain a great way for companies to unlock their hidden or under-appreciated assets. However, firms can also opt to unlock that value through a sale. Here are two recent good examples, although we prefer George Weston, over Dorel, for your new buying.
GEORGE WESTON LTD....
GEORGE WESTON LTD....
Calls by activist investors for corporate breakups are working. In fact, IBM, GE and Johnson & Johnson have all announced or completed spinoffs in the past few weeks. That pressure should draw more attention to the prospects of these two stocks, but we see just one as a buy right now.
ROYAL DUTCH SHELL PLC ADR is a hold. The company (New York symbols RDS.A $45 and RDS.B $45; Resources sector; ADRs outstanding: 2.05 billion; Market cap: $92.3 billion; Dividend yield: 3.6%; Takeover Target Rating: Lowest; www.shell.com) is one of the world’s largest oil companies with about 87,000 employees in 70 countries....
ROYAL DUTCH SHELL PLC ADR is a hold. The company (New York symbols RDS.A $45 and RDS.B $45; Resources sector; ADRs outstanding: 2.05 billion; Market cap: $92.3 billion; Dividend yield: 3.6%; Takeover Target Rating: Lowest; www.shell.com) is one of the world’s largest oil companies with about 87,000 employees in 70 countries....
On April 3, 2020, Raytheon Technologies Corp. (New York symbol RTX), formerly United Technologies (old symbol UTX), spun off its Otis (elevators) and Carrier (heating and air conditioning equipment) businesses. For each UTX share they held, investors received 0.5 of a share in Otis and 1 share in Carrier.
This situation is a good example of how spinoffs can unlock hidden value and fuel your returns: so far, Carrier has shot up 271% while Otis has gained a stellar 89%.
Even after those big jumps, we feel both stocks have plenty of gains ahead....
This situation is a good example of how spinoffs can unlock hidden value and fuel your returns: so far, Carrier has shot up 271% while Otis has gained a stellar 89%.
Even after those big jumps, we feel both stocks have plenty of gains ahead....
A: IBM Corp., $141.05, symbol IBM on New York (Shares outstanding: 896.3 million; Market cap: $127.6 billion; www.ibm.com), recently announced more details regarding the spinoff the Managed Infrastructure Services unit of its Global Technology Services operations....
On February 5, 2021, Zimmer Biomet announced it would spin off its Spine and Dental businesses as a publicly traded company. The news helped push the stock up to $180 in April, but it is now down 19% from that peak. That’s due to concerns the spread of the Delta variant of COVID-19 will once again force hospitals to postpone orthopedic surgeries....