Recent spin-offs coming along nicely

Article Excerpt

Many studies show that one of the best ways for a company to unlock hidden value is to spin off a subsidiary as a separate company. Shares of the new company sometimes fall in the first few months, as many investors tend to sell their new stock. But over time, both the parent and the spin-off usually outperform comparable stocks. In the past two years, several of our recommendations have completed spin-offs. All of these new companies have done well. That’s not surprising, since they came from well-managed parent companies with long histories of rising profits. Here are five recent spin-offs. We like all of them, but only three are buys right now. GAMESTOP CORP. (New York symbols GME $56 and GME.B $56; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 75.8 million; Market cap: $4.2 billion; WSSF Rating: Extra risk) sells new and used video game players and software through over 4,600 stores in the United States and 14 other countries. GameStop was a..

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