Topic: How To Invest

What is Pat’s commentary for the week of January 30, 2018

Article Excerpt

This week we’ve prepared a special report on the breakup/spinoff of the Hilton Hotels empire. Our view is that spinoffs are the closest thing you can find to a sure thing in investing. That belief, in fact, led us to launch our new Spinoffs, Takeovers & Special Situations newsletter. Study after study has shown that after an initial adjustment period, spinoffs tend to outperform comparable stocks for several years. The former parent companies also tend to outperform comparable stocks. The above-average performance of spinoffs makes sense for a couple of reasons. Below we show how these reasons worked out for two recent spinoffs by hotel-industry giant Hilton. (This special report follows up on our earlier analysis of these new, independently traded stocks in Spinoffs, Takeovers & Special Situations.) Hilton Worldwide’s breakup and spinoffs unlocked considerable value for its shareholders. It left them with three “pure plays”—companies that each focus on one of three expanding businesses, generally an advantage from an investment and business standpoint. The…