spinoffs
You Can See Our Spinoff Stock Portfolio For August 2024 Here.
Why we like spinoffs so much
We think that spinoffs are the closest thing you can find to a sure thing for two main reasons:
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Spinoffs involve a lot of work and legal fees....
Spinoffs are a great way for companies to boost shareholder value. Here’s our take on two spinoffs coming up in the second half of 2024.
BAXTER INTERNATIONAL INC. $36 is a buy. The company (New York symbol BAX; Manufacturing sector; Shares o/s: 507.8 million; Market cap: $18.3 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.baxter.com) makes a variety of medical devices, including intravenous pumps and kidney-dialysis equipment.
Under a new strategy to narrow its focus to specialized equipment for hospitals, including intensive-care-unit beds, operating tables, patient monitoring equipment and electronic diagnostic systems, Baxter is shedding some of its other businesses.
As part of that strategy, Baxter plans to spin off later this year its Renal Care and Acute Therapies unit as a separate firm called Vantive....
BAXTER INTERNATIONAL INC. $36 is a buy. The company (New York symbol BAX; Manufacturing sector; Shares o/s: 507.8 million; Market cap: $18.3 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.baxter.com) makes a variety of medical devices, including intravenous pumps and kidney-dialysis equipment.
Under a new strategy to narrow its focus to specialized equipment for hospitals, including intensive-care-unit beds, operating tables, patient monitoring equipment and electronic diagnostic systems, Baxter is shedding some of its other businesses.
As part of that strategy, Baxter plans to spin off later this year its Renal Care and Acute Therapies unit as a separate firm called Vantive....
A key reason why spinoffs tend to work out well is because investors prefer “pure-play” firms that they can more easily evaluate and compare to other stocks.
Iconic food maker Maple Leaf Foods now plans to set up its less-profitable hog processing business as a separate, publicly traded firm....
A lot of change is now going on in the world, particularly in the area of U.S. politics and law—some good, some bad. I’ll say more about these trends in our next client letter. In my opinion, however, one of the most far-reaching and beneficial developments in U.S....
BOEING CO., $176.56, New York symbol BA, is still a hold.
The company delivered 131 commercial jetliners in the five months ended May 31, 2024, down from 206 a year earlier.
That drop is mainly due to quality control problems with its 737 Max planes....
The company delivered 131 commercial jetliners in the five months ended May 31, 2024, down from 206 a year earlier.
That drop is mainly due to quality control problems with its 737 Max planes....
You Can See Our Spinoff Stock Portfolio For July 2024 Here.
Why we like spinoffs so much
We think that spinoffs are the closest thing you can find to a sure thing for two main reasons:
1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.
2) Spinoffs involve a lot of work and legal fees....
High-quality utility stocks, with their high dividend yields and steady or rising income streams, tend to be sensitive to interest rate increases. TC Energy is no exception. The rise in interest rates in the past couple of years helped push its share price down nearly 30%.
The outlook for interest rates is still uncertain, but TC now offers an attractive buying opportunity, starting with its sustainable dividend yield of 7.4%....
The outlook for interest rates is still uncertain, but TC now offers an attractive buying opportunity, starting with its sustainable dividend yield of 7.4%....
BEDFORD METALS CORP., $2.18, symbol BFM on Toronto Venture Exchange, is a mineral exploration company based in Vancouver.
The company has two main projects in development: The Margurete gold project, a 687-hectare property 200 kilometres northwest of Vancouver; and the Ubiquity Lake uranium project, covering 1,382 hectares and located in the Athabasca Basin in Northern Saskatchewan.
Bedford continues to pursue further opportunities in the uranium sector, again targeting the promising Athabasca Basin in Saskatchewan.
The Athabasca Basin is known for hosting some of the world’s highest-grade uranium deposits....
The company has two main projects in development: The Margurete gold project, a 687-hectare property 200 kilometres northwest of Vancouver; and the Ubiquity Lake uranium project, covering 1,382 hectares and located in the Athabasca Basin in Northern Saskatchewan.
Bedford continues to pursue further opportunities in the uranium sector, again targeting the promising Athabasca Basin in Saskatchewan.
The Athabasca Basin is known for hosting some of the world’s highest-grade uranium deposits....
As investors prefer “pure-play” firms that focus on a single businesses, more companies are turning to spinoffs as a way to boost their value. For example, on April 1, 2024, 3M spun off its Health Care division as an independent firm called Solventum. Shareholders received one share of Solventum for every four shares they held....
Swiss pharmaceutical giant Novartis spun off Alcon in 2019. 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 42% since we first recommended it in March 2020 at $63.26—and has just hit a new all-time high—but we think it can go much higher....
The stock is already up over 42% since we first recommended it in March 2020 at $63.26—and has just hit a new all-time high—but we think it can go much higher....