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Spinoffs

These spinoffs have surged since becoming independent firms. Their recent acquisitions also position them for more gains as the economy continues to recover.

CARRIER GLOBAL CORP. $44 is a buy. This company (New York symbol CARR; Manufacturing & Industry sector; Shares outstanding: 836.3 million; Market cap: $36.8 billion; Dividend yield 1.4%; Takeover Target Rating: Medium; www.carrier.com) is a leading maker of heating, ventilation and air conditioning (HVAC) equipment.

In April 2020, Raytheon Technologies Corp....

2 min read

Pat McKeough

Spinoffs

Pressure should boost margins

SALESFORCE INC. $155 is a hold. The company (New York symbol CRM; Manufacturing sector; Shares outstanding: 999.0 million; Market cap: $154.8 billion; No dividend paid; Takeover Target Rating: Medium; www.salesforce.com) is a leading provider of on-demand customer relationship management (CRM) services....

1 min read

Pat McKeough

Spinoffs

Downturn attracts activists

Activist investors continue to take advantage of the stock market downturn to buy stakes in what they see as undervalued firms. Here’s our take on three new activist targets.

COLGATE-PALMOLIVE CO. $76 is a buy. The company (New York symbol CL; Consumer sector; Shares outstanding: 835.2 million; Market cap: $63.5 billion; Dividend yield 2.5%; Takeover Target Rating: Medium; www.colgatepalmolive.com) makes a wide variety of health, beauty and household products, including Ajax, Fab, Murphy and Palmolive cleansers; Colgate toothpaste; Irish Spring, Palmolive, Sanex, Softsoap soaps; Mennen shave cream; and Hill’s pet food brands Science Diet and Prescription Diet.

Activist investor Dan Loeb’s Third Point LLC has now taken a nearly $1 billion stake in Colgate-Palmolive.

He wants the company to spin off its Pet Nutrition business....

2 min read

Pat McKeough

Spinoffs

3M’s narrower focus will pay off

Industrial and consumer products giant 3M has now completed the merger of its food safety operations with Neogen. The deal is part of 3M’s strategy to focus on its more-promising businesses. The next step will come in 2023 when it spins off its Health Care operations as a separate firm.

We feel these moves improve 3M’s long-term prospects....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Becton Dickinson

BECTON DICKINSON & CO. $222 is your #1 Spinoff Buy for 2022. The medical device maker (New York symbol BDX; Manufacturing sector; Shares outstanding: 285.2 million; Market cap: $63.3 billion; Dividend yield: 1.6%; Takeover Target Rating: Medium; www.bd.com) spun off its Diabetes Care business in April 2022 as a separate, publicly traded firm called embecta Corp....

1 min read

Pat McKeough

Spinoffs

Former parent is the better pick

Merck—like other big pharmaceutical makers Pfizer and Johnson & Johnson—recently spun off some of its legacy businesses. Merck’s split came in June 2021 with the creation of Organon & Co. Investors received one share in the new firm for every 10 Merck shares they held.

Since the Organon spinoff, its former parent has gained 32%, which is far better than the 6% decline for the S&P 500 Index over that same period....

3 min read

Pat McKeough

How To Invest

Q: May I get your comments/thoughts on W.W. Grainger (GWW on the NYSE)? Thank you.

A: W.W. Grainger Inc., $585.00, symbol GWW on New York (Shares outstanding: 50.5 million; Market cap: $29.6 billion; Manufacturing sector; TSINetwork Rating: Extra Risk www.grainger.com), is a leading distributor for a wide range of product lines....

3 min read

Pat McKeough

How To Invest

Q: Pat, what do you think of the outlook for Southern Copper, as well as the copper metal itself? Thanks.

A: Southern Copper Corp., $60.48, symbol SCCO on New York (Shares outstanding: 773.1 million; Market cap: $46.7 billion; Resources sector; TSINetwork Rating: Extra Risk www.southerncoppercorp.com), is the fifth-largest copper producer in the world with operations in both Mexico and Peru....

3 min read

Pat McKeough

How To Invest

Q: Pat, I notice that in Canadian Wealth Advisor you recommended the SPDR S&P 500 ETF. Why would this be better than the iShares XSP, which is hedged to the Canadian dollar? The U.S. dollar’s rise against the Canadian dollar this year has me thinking it could fall.

A: No one can consistently predict currency movements. However, a hedged fund pays that fee whenever it has a hedge in place to avoid currency losses, regardless of whether the hedge produces a gain or a loss for the fund.

Note that even if the U.S....

2 min read

Pat McKeough

How To Invest

What is Pat’s commentary for the week of November 15, 2022

Many investors over-emphasize investment predictions as a way to choose investments, especially when just starting out. It’s easy to understand. Following predictions can be easy and fun, like betting on tips at a racetrack or a casino.

Investing newcomers may also downplay portfolio balance and diversification....

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.