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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Now that uncertainty over the COVID-19 pandemic is starting to fade, companies are once again pursuing spinoffs as a way to increase shareholder value. Below, we look at one recently completed spinoff, and one that may occur in the next few months.
The old AARON’S INC. (New York symbol AAN) sells furniture and electronics through more than 1,500 company- and franchisee-owned stores in 46 U.S....
Here’s an Excerpt from a recent issue of Advice for Inner Circle Pro Members:
“The election turned out well for investors, and eased fears on both sides of the polarized U.S....
Study after study has shown that after an initial adjustment period of a few months, spinoffs tend to outperform groups of comparable stocks for several years. Still, in looking at two recent spinoff deals, we feel the spinoff of Pfizer’s generic drug business is more attractive than Artis REIT’s plan to separate its Canadian retail properties.
PFIZER INC....
Swiss pharmaceutical giant Novartis spun off Alcon just last year. 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 ups and downs.
The stock is already up over 60% from its March 2020 lows, but we think it can go much higher....
The stock is already up over 60% from its March 2020 lows, but we think it can go much higher....
We continue to see attractive investment opportunities in drug stocks. COVID-19 gave it a boost, of course. But the industry was already going to prosper, thanks to ongoing regulatory and research developments. Still, due to the nature of the business, results will vary widely and unpredictably from one drug company to another....
Learn how to find spinoffs so you can successfully buy what we think are the closest investments in the market to a “sure thing”
HILTON WORLDWIDE HOLDINGS INC. $89 (New York symbol HLT; Consumer Sector; Shares outstanding: 277.3 million; Market cap: $24.7 billion; Dividend suspended; Takeover Target Rating: Lowest; www.hiltonworldwide.com) is a hold. The company owns, manages and franchises hotels under 18 brands, including Hilton, Waldorf Astoria, Doubletree and Embassy Suites by Hilton....
A key benefit of spinoffs is that they create “pure play” companies that focus on a single business. That makes them easier for investors to value.
A good example is cardboard maker WestRock, which spun off its Ingevity chemical business in 2016 to create two pure-play firms....
A good example is cardboard maker WestRock, which spun off its Ingevity chemical business in 2016 to create two pure-play firms....
Here’s an Excerpt from a recent issue of Advice for Inner Circle Pro Members:
“Market lore can make interesting and worthwhile reading....
“Market lore can make interesting and worthwhile reading....
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