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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GANNETT CO., INC. $35 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 227.8 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.gannett.com) publishes newspapers in the U.S. and U.K., including USAToday, its flagship paper. The company also owns 46 TV stations and websites that attract over 39 million unique visitors a month. In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47. The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses....
GANNETT CO., INC. $35 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 227.8 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.gannett.com) publishes newspapers in the U.S. and U.K., including USAToday, its flagship paper. The company also owns 46 TV stations and websites that attract over 39 million unique visitors a month.
In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47.
The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses.
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In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47.
The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses.
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This is the second in our regular series of Spinoff Stock Investigator reports. I can still say without reservation that, in investing, spinoffs are the closest thing you can find to a sure thing. When a company carries out a spinoff, it sets up one of its subsidiaries or divisions as a separate company, then hands out shares in the new company to its own shareholders. It may hand out the shares as a special dividend, or give its shareholders an opportunity to swap shares of the parent company for the shares of the newly established spinoff....
PLEASE NOTE: Next week, Wall Street Stock Forecaster will reveal its #1 pick for 2015. Don’t miss this unique opportunity to profit. INTERNATIONAL BUSINESS MACHINES CORP., $155.87, New York symbol IBM, reported better-than-expected earnings this week. But that’s mainly due to cost cuts, as demand for the company’s mainframes and computer services has weakened. In the three months ended December 31, 2014, IBM earned $5.8 billion, down 13.0% from $6.65 billion a year earlier. Per-share earnings fell 5.7%, to $5.81 from $6.16, on fewer shares outstanding....
Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.
In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites.
The stock is down 11% since the spinoff announcement, mainly because investors are worried about falling advertising revenue.
Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses.
GANNETT CO., INC. (New York symbol GCI; www.gannett.com) is the largest newspaper publisher in the U.S., with 82 dailies, including USAToday, its flagship paper.
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In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites.
The stock is down 11% since the spinoff announcement, mainly because investors are worried about falling advertising revenue.
Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses.
GANNETT CO., INC. (New York symbol GCI; www.gannett.com) is the largest newspaper publisher in the U.S., with 82 dailies, including USAToday, its flagship paper.
...
In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites. The stock is down 14% since the spinoff announcement, mainly because investors are worried about falling advertising revenue. Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses....
Windstream is spinning off some of its real estate assets, while Frontier (see box) recently expanded by acquisition. Both approaches should let these telecoms maintain their above-average dividend yields. However, their heavy focus on rural areas, plus the rising cost of expanding and upgrading their networks, limits their growth prospects. WINDSTREAM HOLDINGS INC. $10 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 602.8 million; Market cap: $6.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 10.0%; TSINetwork Rating: Average; www.windstream.com) gets 73% of its revenue by selling high-speed Internet and other communication services to 357,700 businesses....
WINDSTREAM HOLDINGS INC. $10 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 602.8 million; Market cap: $6.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 10.0%; TSINetwork Rating: Average; www.windstream.com) gets 73% of its revenue by selling high-speed Internet and other communication services to 357,700 businesses.
The other 27% comes from selling phone, Internet and video services to 3.2 million residential customers, mainly in the rural U.S.
In July 2014, the company announced that it would transfer its fibre optic and copper networks, some land and buildings to a new real estate investment trust (REIT). Windstream will then lease these assets from the REIT for at least the next 15 years at $650.0 million annually.
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The other 27% comes from selling phone, Internet and video services to 3.2 million residential customers, mainly in the rural U.S.
In July 2014, the company announced that it would transfer its fibre optic and copper networks, some land and buildings to a new real estate investment trust (REIT). Windstream will then lease these assets from the REIT for at least the next 15 years at $650.0 million annually.
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SYMANTEC CORP. $22.15 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (408-517- 8000; www.symantec.com; Shares outstanding: 690.3 million; Market cap: $15.5 billion; Dividend yield: 2.7%) plans to break itself into two publicly traded companies. One will keep the Symantec name and focus on antivirus and security software and services. The other will consist of its information management (IM) operations, which include data backup and recovery software. Symantec aims to hand out shares in the IM business by the end of 2015....
EBAY INC., $54.44, Nasdaq symbol EBAY, plans to spin off its PayPal subsidiary as a separate company. This business processes online transactions, including purchases made through eBay’s auction websites. In the past few years, PayPal has expanded into retail stores and payments through smartphones. It accounts for about 40% of eBay’s revenue. eBay plans to hand out PayPal shares as a special dividend in the second half of 2015. Investors are not liable for capital gains taxes until they sell their new shares....