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Spinoffs

A key reason behind the success of spinoffs is that investors tend to prefer “pure-play” businesses that are easier to analyze and value.

A great example of this is trucking firm XPO, which has spun off two of its businesses in the past three years....

2 min read

Pat McKeough

Spinoffs

Losses balloon at this new firm

NCR VOYIX CORP. $13 is a hold. The company (New York symbol VYX; Manufacturing sector; Shares outstanding: 141.2 million; Market cap: $1.8 billion; No dividend paid; Takeover Target Rating: Medium; www.ncrvoyix.com) took its current form on October 16, 2023 when the old NCR Corp....

1 min read

Pat McKeough

Spinoffs

The payoff from AI will take time

On November 1, 2015, the old Hewlett-Packard Co. split into two firms—HP Inc. and Hewlett-Packard Enterprise. For every share they held in the old HP, shareholders received one share in each of the new companies.

HP is now up over 120% since the split, while HP Enterprise has gained 40%....

2 min read

Pat McKeough

Spinoffs

Potential payouts add to its risk

NORFOLK SOUTHERN CORP. $263 is a hold, but only for aggressive investors. The company (New York symbol NSC; Manufacturing sector; Shares outstanding: 225.9 million; Market cap: $59.4 billion; Dividend yield: 2.1%; Takeover Target Rating: Medium; www.norfolksouthern.com) operates a railway network that transports goods across the U.S....

1 min read

Pat McKeough

Spinoffs

Both stand against takeover attempts

Activist investors look for companies with under-appreciated assets that they feel would benefit from better management teams. That includes Macy’s, which is now the target of a takeover offer, and Parkland, which could attract a bid. However, both could drop suddenly if they successfully fend off any takeover attempts.

MACY’S INC....

2 min read

Pat McKeough

Spinoffs

High debt a concern for both picks

In April 2022, AT&T merged its WarnerMedia entertainment business with Discovery Inc. to form Warner Bros. Discovery (Nasdaq symbol WBD). AT&T investors received 0.241917 shares of WBD as a tax-free distribution for each share they owned. At that time, AT&T shareholders owned 71% of the new firm....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: 3M Company

3M COMPANY $104 is a buy for long-term gains. The company (New York symbol MMM; Manufacturing & Industry sector; Shares outstanding: 552.7 million; Market cap: $57.5 billion; Dividend yield: 5.8%; Takeover Target Rating: Medium; www.3m.com) will spin off its Health Care division as a separate firm called Solventum Corp....

1 min read

Pat McKeough

Spinoffs

More gains on tap for these spinoffs

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.

This is a great example of how spinoffs can deliver big returns: since the spinoff, Carrier has shot up about 300% while Otis has gained 118%.

Both companies are now using acquisitions to expand their main businesses....

3 min read

Pat McKeough

How To Invest

Q: Pat, can I get your advice on Cooper Companies (Nasdaq:COO)? Thank you.

A: The Cooper Companies Inc., $101.41, symbol COO on Nasdaq (Shares outstanding: 198.8 million; Market cap: $20.1 billion; www.coopercos.com), is a California-based healthcare business with two operating segments.

The first segment is Cooper Vision (75% of revenues); it manufactures and markets soft contact lenses for the vision-correction market worldwide....

1 min read

Pat McKeough

How To Invest

What is Pat’s commentary for the week of March 12, 2024

Imperial Oil is now trading at all-time highs—and in fact, the stock has delivered a whopping 1,484.6% gain (not including dividends) for our investors since we first recommended it as a buy in April 1995. Still, we think the stock can go even higher.

Imperial is what is termed an “integrated oil”—that is, it has both upstream (production) and downstream (refining and petrochemicals) operations....

8 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.