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Spinoffs

ASTERA LABS INC. $73 is a hold. The company (Nasdaq symbol ALAB; Manufacturing sector; Shares outstanding: 155.5 million; Market cap: $11.4 billion; No dividend paid; Takeover Target Rating: Medium; www.asteralabs.com) designs computer chips that speed up the transfer of data between cloud-based networks and artificial intelligence (AI) software applications.

On March 22, 2024, the company completed an initial public offering of 19.8 million common shares at $36.00 a share....

1 min read

Pat McKeough

Spinoffs

Let our stock updates help direct you

INDIGO BOOKS & MUSIC INC. $2.46 is a hold. The company (Toronto symbol IDG; Consumer sector; Shares outstanding: 27.8 million; Market cap: $68.4 million; No dividend paid; Takeover Target Rating: Lowest; www.chapters.indigo.ca) operates 172 bookstores, mainly under the Chapters and Indigo banners.

Indigo’s major shareholders, Gerald W....

2 min read

Pat McKeough

Spinoffs

One is up and one is down—we like both

Medical device maker Enovis (formerly called Colfax) spun off its non-medical businesses in 2022 as a separate firm called ESAB.

So far, the former parent is down 19% while the new firm is up an impressive 113%. We feel Enovis will turn around given it benefits from the aging population....

2 min read

Pat McKeough

Spinoffs

Multiple bidders for Vista Outdoor

VISTA OUTDOOR INC. $32 is a hold. The company (New York symbol VSTO; Consumer sector; Shares outstanding: 58.1 million; Market cap: $1.9 billion; No dividends paid; Takeover Target Rating: Medium; www.vistaoutdoor.com) is a leading maker of consumer products for the outdoor sports and recreation markets....

1 min read

Pat McKeough

Spinoffs

International giants plan to simplify

These two global leaders now plan to shrink their operations. That’s good news for investors, as stock markets tend to prefer—and reward—companies with easy-to-understand businesses rather than those with complex conglomerate structures. Even so, we prefer Unilever over Sony for your new buying.

UNILEVER PLC (ADR) $47 is a spinoff buy. The company (New York symbol UL; Consumer sector; ADRs outstanding: 2.5 billion; Market cap: $117.5 billion; Dividend yield: 4.0%; Takeover Target Rating: Medium; www.unilever.com) is one of the world’s largest makers of branded and packaged consumer goods....

2 min read

Pat McKeough

Spinoffs

Icahn pushes for spinoffs at AEP

AMERICAN ELECTRIC POWER CO. INC. $81 is a hold. Formed in 1906, this Columbus, Ohio-based company (New York symbol AEP; Utilities sector; Shares outstanding: 526.6 million; Market cap: $42.7 billion; Dividend yield: 4.4%; Takeover Target Rating: Medium; www.aep.com) generates and distributes electricity to 5.6 million customers in 11 U.S....

1 min read

Pat McKeough

Spinoffs

Activist pressure lifts their stock prices

These two stocks have moved up recently in response to activist pressure. However, we feel Disney is in a better position to keep moving higher for its investors.

WALT DISNEY CO. $113 is still a buy. The company (New York symbol DIS; Consumer sector; Shares outstanding: 1.8 billion; Market cap: $203.4 billion; Dividend yield: 0.8%; Takeover Target Rating: Medium; www.thewaltdisneycompany.com) is an entertainment and media conglomerate headquartered in Burbank, California....

2 min read

Pat McKeough

Spinoffs

Breakup creates more-nimble players

On October 3, 2023, the old Kellogg Company split into two independent firms: WK Kellogg and Kellanova.

Investors received one WK Kellogg share for every four Kellogg shares they held. The former parent then changed its name to Kellanova....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Alamos Gold

ALAMOS GOLD INC. $21 is a buy. The gold miner (Toronto symbol AGI; Resources sector; Shares outstanding: 397.8 million; Market cap: $8.4 billion; Dividend yield: 0.7%; Takeover Target Rating: Medium; www.alamosgold.com) is now buying Argonaut Gold Inc....

1 min read

Pat McKeough

Spinoffs

These two still have long-term appeal

On November 9, 2016, foodmaker Conagra Brands spun off its potato-processing operations as Lamb Weston. Investors received one share of the new firm for every three Conagra shares they held.

Just in April, Lamb Weston’s shares dropped 20% after the company reported disappointing quarterly results....

4 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.