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Spinoffs

Spinoffs are a great way for companies to boost shareholder value. Here’s our take on two spinoffs coming up in the second half of 2024.

BAXTER INTERNATIONAL INC. $36 is a buy. The company (New York symbol BAX; Manufacturing sector; Shares o/s: 507.8 million; Market cap: $18.3 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.baxter.com) makes a variety of medical devices, including intravenous pumps and kidney-dialysis equipment.

Under a new strategy to narrow its focus to specialized equipment for hospitals, including intensive-care-unit beds, operating tables, patient monitoring equipment and electronic diagnostic systems, Baxter is shedding some of its other businesses.

As part of that strategy, Baxter plans to spin off later this year its Renal Care and Acute Therapies unit as a separate firm called Vantive....

2 min read

Pat McKeough

Spinoffs

Elliott likes Etsy’s strategy

ETSY INC. $65 is a hold. The company (Nasdaq symbol ETSY; Consumer sector; Shares outstanding: 116.9 million; Market cap: $7.6 billion; No dividend paid; Takeover Target Rating: Medium; www.etsy.com) operates an online marketplace that brings together buyers and sellers of unique and creative consumer goods.

Etsy’s shares are down about 20% since the start of 2024, mainly due to concerns that cost-conscious consumers are spending less on discretionary goods.

Activist firm Elliott Management, which owns about 13% of the stock, feels Etsy can expand its customer base with a new loyalty program....

1 min read

Pat McKeough

Spinoffs

Pass on these three activist targets

The shares of these three firms (including Etsy, see box) are down sharply in the past few years. That has attracted the attention of activist investors who see a way to turn these stocks around. While their plans have merit, it could take years for them to recover.

WOLFSPEED INC....

2 min read

Pat McKeough

Spinoffs

Maple Leaf aims for ‘pure-play’ gains

A key reason why spinoffs tend to work out well is because investors prefer “pure-play” firms that they can more easily evaluate and compare to other stocks.

Iconic food maker Maple Leaf Foods now plans to set up its less-profitable hog processing business as a separate, publicly traded firm....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Conagra Brands Inc.

CONAGRA BRANDS INC. $30 is a buy. The company (New York symbol CAG; Consumer sector; Shares outstanding: 478.2 million; Market cap: $14.3 billion; Dividend yield: 4.7%; Takeover Target Rating: Medium; www.conagra.com) spun off its potato-processing operations as Lamb Weston Holdings Inc....

1 min read

Pat McKeough

Spinoffs

Tap into rebounding travel volumes

On June 4, 2018, Wyndham Worldwide (old New York symbol WYN) split into two new companies. For every WYN share investors held, they received one share each of the new companies—Wyndham Hotels and Resorts, and Wyndham Destinations (now called Travel + Leisure).

Wyndham Hotels is up 30% since the split....

4 min read

Pat McKeough

How To Invest

Here’s our Power Recommendation Portfolio for August 2024

You Can See Our Current Power Recommendations For August 2024 Here.

Understanding our recommendations: Power Buy—These stocks are our top choices for new buying now....

1 min read

Pat McKeough

Growth Stocks

Two restaurant stocks poised for more gains

During the pandemic, both Domino’s Pizza and Texas Roadhouse implemented savvy strategies to support their businesses. Now, going forward, we think each is well-positioned to capitalize on its popular offerings to keep attracting customers. Each stock also remains a buy.

DOMINO’S PIZZA, $473.27 (New York symbol DPZ; TSINetwork Rating: Average) (www.dominos.com; Shares o/s: 34.9 million; Market cap: $17.1 billion; Yield: 1.3%), gives you exposure to the world’s largest chain of pizza stores offering takeout and delivery....

2 min read

Pat McKeough

Growth Stocks

Lilly gets formal FDA approval for its Alzheimer’s drug

With its latest drug having won FDA approval, Eli Lilly is poised to profit from the growing need for medical help to slow the effects of Alzheimer.

ELI LILLY & CO., $905.59, is still a buy. The company (New York symbol LLY; TSINetwork Rating: Above Average) (www.lilly.com; Shares o/s: 950.2 million; Market cap: $894.9 billion; Yield: 0.6%) has now received formal U.S....

1 min read

Pat McKeough

Blue Chip Stocks

Here are updates on two of your buys: Lundin Gold & Disney

Long-time readers know that we aim to keep you informed of important news about the stocks we cover. That means highlighting developments and plans that promise to bolster investor gains. Here are two buys that stand out this month:

LUNDIN GOLD, $23.41, is a buy. The miner (Toronto symbol LUG; TSINetwork Rating: Speculative) (www.lundingold.com; Shares outstanding: 239.6 million; Market cap: $5.6 billion; Dividend yield: 2.3%) owns and operates the Fruta del Norte mine in Ecuador.

The company continues to post higher gold production....

2 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.