united technologies
New York symbol UTX, has five main businesses: Carrier makes heating and air conditioning equipment; Otis makes and services elevators; Pratt & Whitney makes aircraft engines; Flight Systems makes helicopters and aircraft controls; and UTC Fire & Security provides security and fire protection services.
Here are some spinoff stocks we think have gains ahead.
Hewlett-Packard Co., $29.82, symbol HPQ on New York (Shares outstanding: 1.8 billion; Market cap: $53.7 billion; www.hp.com), plans to split into two firms:
The company rejected a similar plan in 2011. However, Hewlett’s 2014 restructuring, which involved cutting jobs and simplifying product lines, has increased its profit margins and strengthened its balance sheet. That gives these new firms more flexibility to invest in new products and make acquisitions.
...
Hewlett-Packard Co., $29.82, symbol HPQ on New York (Shares outstanding: 1.8 billion; Market cap: $53.7 billion; www.hp.com), plans to split into two firms:
- Hewlett-Packard Enterprise will sell computing products, like servers and analytics software, to businesses and governments. It will also offer cloud computing services and financing. Hewlett-Packard Enterprise will have annual revenue of $58.4 billion and operating profits of $6 billion. Meg Whitman, Hewlett’s current chief executive officer, will become this firm’s CEO.
- The second company, called HP Inc., will focus on the slower-growing personal computer (59% of its revenue) and printer (41%) markets. HP Inc. will have annual revenue of $57 billion and $5 billion of profits. Ms. Whitman will be its chairman.
The company rejected a similar plan in 2011. However, Hewlett’s 2014 restructuring, which involved cutting jobs and simplifying product lines, has increased its profit margins and strengthened its balance sheet. That gives these new firms more flexibility to invest in new products and make acquisitions.
...
APPLE INC., $124.50, Nasdaq symbol AAPL, reported better-than-expected quarterly results this week. However, concerns about slowing iPhone demand and uncertainty surrounding sales of its new Apple Watch caused the stock to fall 4%. In its fiscal 2015 third quarter, which ended June 27, 2015, Apple sold 47.5 million iPhones, up 35.0% from 35.2 million a year earlier, mainly due to strong demand in China. Even so, the latest total missed the consensus forecast of 48.8 million, probably because users are waiting for the company to release a new version later this year. Earnings jumped 37.8% to $10.7 billion from $7.7 billion. Per-share profits gained 44.5%, to $1.85 from $1.28, on fewer shares outstanding. That beat the consensus estimate of $1.81....
Our advice is keep it simple when you invest in ETFs. Three “plain vanilla” ETFs give you an efficient way of investing in U.S. stocks.
SPDR S&P 500 ETF $204.53 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s MER is just 0.10% and it yields 2.0%.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
...
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s MER is just 0.10% and it yields 2.0%.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
...
Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....
CONAGRA FOODS INC., $43.37, New York symbol CAG, jumped 11% on Friday on news that activist investment firm Jana Partners now owns 7.2% of the company. Jana will probably push ConAgra to sell or spin off its private-label food business. In January 2013, ConAgra paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S. However, strong competition has hurt its sales and earnings. As a result, ConAgra has had to writedown this investment by $2.1 billion. To put these figures in context, ConAgra’s market cap is $17.0 billion....
SPDR S&P 500 ETF $206.43 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
...
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
...
Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....
UNITED TECHNOLOGIES CORP., $118.74, New York symbol UTX, announced this week that it’s considering selling or spinning off its Sikorsky helicopter division. The company expects to make a final decision by the end of 2015. Sikorsky supplied 11% of United Technologies’ 2014 revenue but just 2% of its profits. That’s mainly due to a one-time charge after it renegotiated a contract to build helicopters for the Canadian government. The helicopter business has little in common with United Technologies’ larger divisions (Otis elevators, Carrier heating and air conditioning, Pratt & Whitney jet engines, and aircraft controls), so spinning it off makes sense....
BOMBARDIER INC., Toronto symbols BBD.A $2.69 and BBD.B $2.58, fell 12% this week after announcing several moves to improve its struggling aerospace division. It will also suspend its dividend and issue new shares and debt to shore up its balance sheet. As part of the plan, Bombardier’s chief executive officer, Pierre Beaudoin, will step down and become executive chairman. Alain Bellemare, the former CEO of United Technologies, will take over as CEO. (United Technologies is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.) Bombardier now says its new CSeries passenger jet will cost $5.4 billion to develop, up from its earlier forecast of $4.4 billion (all amounts except share prices in U.S. dollars). After several setbacks, it expects to begin deliveries by the end of 2015....