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Spinoffs

CAVA GROUP INC., founded in 2010, operates 263 fast-casual restaurants in 22 states and Washington DC. It specializes in Greek and Mediterranean-style dishes.

Cava has completed an initial public offering (IPO) of 14.44 million common shares at $22 a share....

1 min read

Pat McKeough

Spinoffs

Keep on top of stock updates

GE HEALTHCARE TECHNOLOGIES INC. $79 is a buy. The company (Nasdaq symbol GEHC; Manufacturing sector; Shares outstanding: 479.7 million; Market cap: $37.9 billion; Dividend yield: 0.2%; Takeover Target Rating: Medium; www.gehealthcare.com) makes X-ray equipment, MRIs and ultrasound scanners.

The company took its current form in January 2023 when General Electric Co....

2 min read

Pat McKeough

Spinoffs

HP spinoffs look to AI for growth

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 150% since the split, while HP Enterprise has gained 95%....

2 min read

Pat McKeough

Spinoffs

This REIT rewards its investors

PRIMARIS REAL ESTATE INVESTMENT TRUST $13 is a buy. The REIT (Toronto symbol PMZ.UN; Manufacturing sector; Units outstanding: 96.9 million; Market cap: $1.3 billion; Distribution yield: 6.3%; Takeover Target Rating: Medium; www.primarisreit.com) owns 35 enclosed and open-air shopping malls in Canada....

1 min read

Pat McKeough

Spinoffs

Spinoff creates two takeover targets

A key benefit for spinoffs is that the resulting companies often become attractive takeover targets for larger firms. That’s what happened to media firm Gannett, which split its newspaper and TV broadcasting operations in 2015. While one of those recent takeover deals has been cancelled, we still see both of these firms as worthwhile holds.

TEGNA INC....

2 min read

Pat McKeough

Spinoffs

Elliott’s pressure will help Goodyear

GOODYEAR TIRE & RUBBER CO. $13 is a buy. The company (New York symbol GT; Manufacturing sector; Shares outstanding: 283.4 million; Market cap: $3.7 billion; No dividend paid; Takeover Target Rating: Medium; www.goodyear.com) is one of the world’s largest tiremakers, with 57 plants in 23 countries.

Activist investor Elliott Management, which owns about 10% of Goodyear’s shares, is pushing for a number of changes due to the company’s poor profit performance versus its rivals....

1 min read

Pat McKeough

Spinoffs

Activist targets: 2 holds and 1 buy

We pay close attention to the moves of activist investors as they tend to seek companies that can boost their value by spinning off or selling undervalued assets. We advise against buying Freshpet or Shake Shack right now, but activist pressure improves the prospects of Goodyear (see box).

FRESHPET INC....

2 min read

Pat McKeough

Spinoffs

Buy Cummins now for future spinoff

Auto parts maker Cummins recently carved out its filtration products business as a separate firm called Atmus. We expect the split will work out well for both firms. However, we prefer Cummins for your new buying right now, as its long-term plan is to hand out its remaining Atmus shares to its own shareholders.

CUMMINS INC....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Teck Resources

TECK RESOURCES LTD. $58 is a buy. The company (Toronto symbol TECK.B; Resources sector; Shares outstanding: 515.0 million; Market cap: $29.9 billion; Dividend yield: 0.9%; Takeover Target Rating: Lowest; www.teck.com) recently cancelled a controversial plan to spin off its metallurgical coal business, as winning shareholder approval would have been difficult....

1 min read

Pat McKeough

Spinoffs

A buy for spinoff and EV gains

Automakers are shifting away from traditional internal combustion engines to battery-powered electric vehicles (EVs). Global sales of EVs will probably increase from 14% of all vehicles sales in 2022 to 18% for this year. That could hit 60% by 2030.

To take advantage of the trend, auto parts maker BorgWarner is spinning off some of its smaller businesses to focus on EVs....

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.