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Spinoffs

Medical products giant Johnson & Johnson recently spun off its consumer products business as a separate firm called Kenvue.

The company first sold shares in Kenvue to the public in May 2023 at $22.00 a share. Johnson & Johnson later let its own shareholders exchange their shares for Kenvue shares at a 7% discount....

2 min read

Pat McKeough

Spinoffs

REIT spinoff plan still on tap

LEON’S FURNITURE LTD. $18 is a buy for aggressive investors. The retailer (Toronto symbol LNF; Consumer sector; Shares outstanding: 67.9 million; Market cap: $1.2 billion; Dividend yield: 3.6%; Takeover Target Rating: Lowest; www.leons.com) operates 304 stores that sell furniture and home appliances, mainly under the Leon’s, The Brick, and Appliance Canada banners.

Leon’s still plans to transfer its real estate holdings to a new real estate investment trust (REIT)....

1 min read

Pat McKeough

Spinoffs

Algonquin’s dividend makes it a buy

BlackBerry and Algonquin are using spinoffs and asset sales to boost shareholder value. We feel Algonquin is the better choice for your new buying, particularly as its dividend looks safe and now yields a high 7.5%.

BLACKBERRY LTD. $4.87 is a hold. The company (Toronto symbol BB; Manufacturing sector; Shares outstanding: 583.2 million; Market cap: $2.8 billion; No dividend paid; Takeover Target Rating: Medium; www.blackberry.com) quit developing smartphones in 2016 to concentrate on security software for mobile phones and self-driving cars.

The company now plans to separate its cybersecurity and Internet of Things (IoT) businesses into two independent, publicly traded companies by August 2024.

As part of the separation, it will pursue an initial public offering (IPO) for the IoT business, which includes its QNX automotive embedded software....

2 min read

Pat McKeough

Spinoffs

Activist helps oust CEO

PITNEY BOWES INC. $3.60 is a hold. The company (New York symbol PBI; Manufacturing & Industry sector; Shares outstanding: 176.0 million; Market cap: $633.6 million; Dividend yield: 5.6%; Takeover Target Rating: Medium; www.pitneybowes.com) is the world’s largest manufacturer of postage meters, mailing equipment and other technology for e-commerce and logistics.

Partly due to pressure from activist investor Hestia Capital, which owns 8.5% of Pitney Bowes, Marc Lautenbach recently resigned as CEO....

1 min read

Pat McKeough

Spinoffs

Activist attention should spur them

We continue to track the moves of activist investors, since they look for the same things we do: undervalued companies with the potential to boost their share prices with spinoffs, asset sales or the sale of the entire company. Here are two activist-targeted firms that are worthwhile buys for aggressive investors.

WALT DISNEY CO....

2 min read

Pat McKeough

Spinoffs

This split rewards you with two buys

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

Under the plan, investors received one WK Kellogg share for every four Kellogg shares they held. They are not liable for capital gains taxes until they sell their new shares....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Wyndham Hotels & Resorts

WYNDHAM HOTELS & RESORTS INC. $74 is still a buy. The company (New York symbol WH; Consumer Sector; Shares outstanding: 84.3 million; Market cap: $6.2 billion; Dividend yield: 2.1%; Takeover Target Rating: Medium; www.wyndhamhotels.com) took its current form on June 4, 2018, when the old Wyndham Worldwide (old New York symbol WYN) split into two new companies....

1 min read

Pat McKeough

Spinoffs

Danaher’s latest spinoff adds value

Danaher is one of our long-time favourites. In fact, we first recommended it in our October 2017 issue just after the spinoff of its industrial products maker Fortive Corp. (New York symbol FTV). In September 2019, we were again pleased with Danaher’s move to unlock more shareholder value with the spin off of dental equipment specialist Envista Holdings Corp....

3 min read

Pat McKeough

How To Invest

Q: Pat: I’ve noticed a lot of TV ads for reverse mortgages lately. What’s your view on these? Thanks for all your advice over the last few years!

A: If you’re looking at a reverse mortgage for your own home, I see them as appealing only in highly specialized situations. You’d want to use a reverse mortgage only if you feel that selling your home is out of the question, and if you’ve exhausted all sources of income that do not involve heavy costs, such as a big capital-gains tax bill.

Before taking out a reverse mortgage, make sure you consider all other housing or financial options open to you....

1 min read

Pat McKeough

How To Invest

Q: Please, may I get your thoughts on Core & Main? Thanks.

A: Core & Main Inc., $32.53, symbol CNM on New York (Shares outstanding: 172.9 million; Market cap: $5.6 billion; Manufacturing sector; TSINetwork Rating: Extra Risk www.coreandmain.com), is a specialized distributor of water, wastewater, storm drainage and fire protection products to municipalities, and residential and non-residential end markets across the U.S.

The St....

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.