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Spinoffs

J.M. SMUCKER CO. $113 is a hold. The company (New York symbol SJM; Consumer sector; Shares outstanding: 106.4 million; Market cap: $12.0 billion; Dividend yield: 3.8%; Takeover Target Rating: Medium; www.jmsmucker.com) is the largest maker of jams, jellies and peanut butter in the U.S....

2 min read

Pat McKeough

Spinoffs

Both are down, but the parent is a buy

On August 3, 2021, the old L Brands holding company (old New York symbol LB) split into two separate firms: Victoria’s Secret and Bath & Body Works. Investors received one new share of Victoria’s Secret for every three shares of L Brands they held. L Brands then changed its name to Bath & Body Works.

So far, the split has produced mixed results—Victoria’s Secret is now up roughly 14%, but its former parent has dropped 40%.

Consumers continue to cut back on discretionary purchases as they cope with elevated prices and interest rates....

2 min read

Pat McKeough

Spinoffs

Kyndryl winds down old contracts

KYNDRYL HOLDINGS INC. $36 is still a hold. The company (New York symbol KD; Manufacturing & Industry sector; Shares outstanding: 232.3 million; Market cap: $8.4 billion; No dividends paid; Takeover Target Rating: Medium; www.kyndryl.com) helps corporate and government clients manage their datacentres....

1 min read

Pat McKeough

Spinoffs

We still like their prospects

Becton spun off its diabetes products business as embecta in 2022. Since then, the former parent is down 14%, while the new company has dropped 54%. However, both firms are taking steps that we expect to spur their earnings.

BECTON DICKINSON & CO....

2 min read

Pat McKeough

Spinoffs

Jana pushes for a takeover

HARMONIC INC. $13 is a hold. The company (Nasdaq symbol HLIT; Manufacturing & Industry sector; Shares outstanding: 116.5 million; Market cap: $1.5 billion; No dividend paid; Takeover Target Rating: Medium; www.harmonicinc.com) makes a variety of products that help manage video and Internet data traffic for telecommunication providers, cable TV firms, and media streaming companies....

1 min read

Pat McKeough

Spinoffs

Activists see value in these laggards

The shares of these two companies have languished in the past few years. Even so, these firms are resisting demands from activist investors for big changes, which will likely continue to hold back their stocks.

HENRY SCHEIN INC. $77 is a hold. The company (Nasdaq symbol HSIC; Manufacturing & Industry sector; Shares outstanding: 124.7 million; Market cap: $9.6 billion; No dividend paid; Takeover Target Rating: Medium; www.henryschein.com) distributes dental and medical consumable products....

2 min read

Pat McKeough

Spinoffs

Stick with the former parent for now

On October 1, 2024, TC Energy completed the spinoff of its oil pipeline business as separate company South Bow. Investors received 0.2 of a South Bow share for every TC share they held.

TC recommends that shareholders allocate 91% of their adjusted cost base to their TC Energy shares, and 9% to their South Bow shares....

2 min read

Pat McKeough

Spinoffs

Spinoff Spotlight: Western Digital Corp.

WESTERN DIGITAL CORP. $70 is a hold. The company (Nasdaq symbol WDC; Manufacturing sector; Shares outstanding: 326.5 million; Market cap: $22.9 billion; No dividend paid; Takeover Target Rating: Medium; www.westerndigital.com) plans to spin off its flash memory business (which represents about half of Western Digital’s revenue) to its shareholders as a tax-deferred dividend....

1 min read

Pat McKeough

Spinoffs

Split creates THREE pure-play buys

To help unlock some of its hidden value, trucking firm XPO recently spun off two of its smaller businesses—GXO Logistics and RXO.

Investors tend to prefer “pure-play” firms that are easier to analyze and evaluate. That’s why XPO’s shares are up 84% since the first spinoff....

3 min read

Pat McKeough

How To Invest

Q: I really enjoy your Inner Circle emails. I was hoping to get TSI’s take on TransAlta Corp. Thanks!

A: TransAlta Corp., $18.29, symbol TA on Toronto (Shares outstanding: 298.4 million; Market cap: $5.5 billion; www.transalta.com), is one of Canada’s largest publicly traded power generators.

Established in 1911, the company develops and operates electricity generation facilities....

3 min read

Pat McKeough

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.