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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Special Market Report: Coronavirus


Today’s Inner Circle Q&A features a special report from Pat on the current state of the stock market in light of the coronavirus, and its impact on your investments.

Please read on for Pat’s thoughtful and practical views on what investors should consider in times like this.




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....
Successful investors, like successful businesses, need to keep an open mind about the way they do things. Neither one can afford to keep doing something just because “we’ve always done it that way.” That applies to investing basics such as bonds.

Many casual investors, financial journalists and brokers take it for granted that owning some bonds is a good thing....
We often remind our readers that spinoffs are a great way for companies to unlock hidden value. A good example is eBay’s move in 2015 to set up its payment-processing business, PayPal, as a separate company.


That spinoff has worked out very well for PayPal shareholders, who have enjoyed a huge 187% gain since the split....
Linamar’s shares were trading as high as $80.59 a share in November 2017. They have since fallen to $39.53—a 50.9% drop in market value. That includes the 20.1% decrease since the start of 2020. Some investors worry this downward trend will continue, mainly because the company is often viewed as simply an auto-parts supplier, overly exposed to the current slump in the automotive industry....
We’ve said for a long time that growth by acquisition is inherently riskier than internal growth since it carries an above-average chance of unpleasant surprises. That’s because a buyer of something rarely knows as much about it as the seller.


Still, some companies do it a lot better than others—and successfully integrating acquisitions can spur strong growth and share-price jumps for their investors.


Stantec’s strategy of making small acquisitions is safer than making big purchases because any mistakes tend to be smaller....
When a company moves into a new and exciting area, it can provide even more of a catalyst for strong investor returns. Here’s a stock using data it gathers to generate a new revenue stream and more. We think it will let you build on its 76% gain over the last year.


RESMED INC....
Long-time readers know that we are constantly keeping you up to date on important news affecting the stocks we cover. And, of course, we also aim to highlight stocks with especially bright outlooks for TSI Power Growth Investors. Here are two buys that stand out this month:


CALIAN GROUP $47.00 (Toronto symbol CGY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 8.0 million; Market cap: $377.6 million; Dividend yield: 2.4%) has two main opertions: Business and Technology Services (contributing 70% of revenue) provides engineers, health-care workers and other skilled professionals on a contract basis; and Systems Engineering (30% of revenue) sells hardware and software for satellite and other communications systems.


In the quarter ended December 31, 2019, Calian’s revenue jumped 24.1%, to $99.2 million from $79.9 million a year earlier....
One of our long-time favourites, Fair Isaac, keeps hitting all-time highs for investors. It has jumped 76.2% over the last year alone, and it’s up a whopping 3,075% since we first recommended it in February 1999!


The company’s core business of credit scores continues to thrive....
Rising employee healthcare costs are prompting many large employers to actively take steps to stem the flow of money they spend on employee medical costs. Primary care can be an effective cost-cutting tool, by helping patients better manage chronic diseases and keeping them out of more-expensive care settings like emergency rooms or urgent-care centres.


On January 31, 2020, 1Life sold 7.5 million shares of its stock to IPO investors at $14 a share....
Alcon offers investors two exciting ways to profit. Not only does it give you exposure to rapidly expanding, worldwide demand for its contact lenses and cataract surgery products, but its global operations and technological leadership enhance the possibility of it attracting a lucrative takeover bid....