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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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....
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....
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....
BLOOMIN’ BRANDS INC. $23 is worth holding given the likelihood of a lucrative takeover bid. The company (Nasdaq symbol BLMN; Consumer Sector; Shares outstanding: 86.9 million; Market cap: $2.0 billion; Dividend yield 3.6%; Takeover Target Rating: Highest; www.bloominbrands.com) owns and franchises more than 1,470 restaurants in 48 states and 21 countries....
Drug wholesaler McKesson fell from its high of $241 in May 2015 to $108 in December 2018. That’s partly due to its role in the opioid crisis. However, the company has now settled many of those lawsuits, reducing risk for investors. It’s also improving the profitability of its main businesses, and its plan to let investors acquire shares in its Change Healthcare subsidiary should further boost your returns.
MCKESSON CORP....
Spinoffs are often seen as an effective way for a holding company to eliminate its “holding company discount.” That discount is usually evident in the stock price of a company that holds a variety of assets, or that invests in a number of businesses.
As well, investors tend to prefer so-called “pure play” companies—firms that focus on a single business area....
These two global leaders continue to shrink their operations. That’s good news for investors, as markets tend to prefer—and reward—companies with easy-to-understand businesses rather than those with complex conglomerate structures (see box below for more info).
UNILEVER PLC (ADR) $60 is a buy for aggressive investors. The company (New York symbol UL; Consumer sector; Shares outstanding: 2.6 billion; Market cap: $156.0 billion; Dividend yield: 3.1%; Takeover Target Rating: Lowest; www.unilever.com) is one of the world’s largest makers of branded and packaged consumer goods.
Unilever is now conducting a strategic review of its tea business to add investor value....
DAVE & BUSTER’S ENTERTAINMENT INC. $46 is okay to hold. The stock (Nasdaq symbol PLAY; Consumer sector; Shares outstanding: 38.6 million; Market cap: $1.8 billion; Dividend yield: 1.4%; Takeover Target Rating: Highest; www.daveandbusters.com) gives you a stake in 135 entertainment and dining venues in the U.S....
Generally, investors are right to welcome share buyback plans, which help to give them a bigger stake in the company, but also tend to push up the price of their shares.
However, depending on the company, there are better ways to reward shareholders....
Shipping specialist XPO Logistics has handed investors a whopping 77% gain in the past 12 months. It’s now looking to sell or spin off some of its businesses to further spur your returns. A tighter focus on its core operations would help unlock value for its investors and could also make the remaining firm an attractive takeover target....