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Spinoffs

DYE & DURHAM LTD. $18 is a hold. The company (Toronto symbol DND, Manufacturing & Industry sector; Shares outstanding: 66.9 million; Market cap: $1.2 billion; Dividend yield: 0.4%; Takeover Target Rating: Medium; www.dyedurham.com) is a cloud-based software provider for legal and business professionals.

On July 17, 2020, Dye & Durham completed an initial public offering of 17 million shares at $7.50 each.

Activist firm Engine Capital, which owns 7.1% of the company, now wants to replace six of Dye & Durham’s seven directors with its own nominees at the annual meeting on December 17, 2024....

2 min read

Pat McKeough

Spinoffs

We prefer the spinoff over the parent

On April 30, 2018, Pentair spun off its electrical unit as nVent Electric. Investors received one nVent share for each Pentair share they held.

After the split, both stocks moved sideways before dropping along with the market in March 2020 as the pandemic took hold....

2 min read

Pat McKeough

Spinoffs

Comcast to spinoff cable channels

COMCAST CORP. $43 is a hold. The company (Nasdaq symbol CMCSA; Consumer sector; Shares outstanding: 3.9 billion; Market cap: $167.7 billion; Dividend yield 2.9%; Takeover Target Rating: Lowest; www.comcast.com) is a global media business with five main businesses: Residential Connectivity & Platforms (cable TV systems), Business Services Connectivity, Media (including NBCUniversal), Studios, and Theme Parks.

The company now plans to bundle its cable TV channels—including MSNBC, CNBC and USA Network—into a separate business and spin it off to its shareholders, probably in 2025....

1 min read

Pat McKeough

Spinoffs

New businesses should fuel more gains

On April 3, 2020, aerospace and military equipment maker RTX Corp. (formerly called Raytheon Technologies, New York symbol RTX) spun off its Otis (elevators) and Carrier (heating and air conditioning equipment) businesses. For each UTX share they held, investors received 0.5 of a share in Otis and 1 share in Carrier.

Investors prefer pure-play firms, which is why Carrier has shot up about 484% since the split while Otis has gained 122%....

2 min read

Pat McKeough

Spinoffs

Jana pushes for a takeover

LAMB WESTON HOLDINGS INC. $76 is a buy. The company (New York symbol LW; Consumer sector; Shares outstanding: 142.6 million; Market cap: $10.8 billion; Dividend yield: 1.9%; Takeover Target Rating: Highest; www.lambweston.com) is a leading producer of frozen french fries, potatoes and other packaged vegetables.

Lamb Weston’s sales and earnings have suffered lately as cost-conscious consumers make fewer trips to fast-food restaurants in an effort to cope with higher inflation and interest rates....

1 min read

Pat McKeough

Spinoffs

Slow starts have attracted activists

These two medical-related spinoffs have struggled since they became separate companies. That has attracted the interest of activist investors. While that attention improves the prospects of both firms, we see better opportunities elsewhere.

KENVUE INC....

2 min read

Pat McKeough

Spinoffs

Activist wants a different spinoff

Diversified manufacturer Honeywell recently announced that it will spin off its Advanced Materials business as a separate firm. That unit make a variety of products, ranging from body armour and pharmaceutical packaging to air-conditioning refrigerants and packaging films.

Activist investor Elliott Investment Management, which owns $5 billion of Honeywell’s shares, instead wants the company to split another way, with one of the new businesses focused on automation, energy and sustainability solutions; the other would be focused on aerospace....

2 min read

Pat McKeough

Spinoffs

Spinoff Spotlight: GE Vernova

GE VERNOVA INC. $343 is a hold. The company (New York symbol GEV; Manufacturing sector; Shares outstanding: 275.7 billion; Market cap: $94.6 billion; No dividend paid; Takeover Target Rating: Medium; www.gevernova.com) makes turbines and related equipment for gas-fired and nuclear power plants, plus equipment for wind farms.

On April 2, 2024, investors in the old General Electric Co....

1 min read

Pat McKeough

Spinoffs

Lower costs should spur these two

On May 22, 2019, apparel maker VF Corp. spun off its Lee and Wrangler jeans business as the publicly traded Kontoor Brands. Investors received one share in Kontoor for every seven VF shares they held. So far, the split has produced mixed results. While the new Kontoor shares have soared 114%, the former parent is down 80%.

In response, in July 2023, VF brought in a new CEO Bracken Darrell, who launched a turnaround strategy....

4 min read

Pat McKeough

How To Invest

Q: What do you think about Wayfair? It has dropped a lot since the pandemic.

A: Wayfair Inc., $41.38, symbol W on New York (Shares outstanding: 123.5 million; Market cap: $5.1 billion; www.wayfair.com), is one of the world’s largest online destinations for home furnishings....

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.