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Spinoffs

Both these spinoffs are off to a slow start as they restructure their operations. We feel their moves will ultimately pay off, but it’s better to hold off new buying right now.

VIATRIS INC. $11 is a hold. The company (New York symbol VTRS; Manufacturing & Industry sector; Shares outstanding: 1.2 billion; Market cap: $13.2 billion; Dividend yield: 4.4%; Takeover Target Rating: Medium; www.viatris.com) makes a variety of branded and generic drugs, include Celebrex (pain relief), Viagra (erectile dysfunction) and Lipitor (cholesterol)....

2 min read

Pat McKeough

Spinoffs

Pinterest needs a growth catalyst

PINTEREST INC. $22 is a hold. The company (New York symbol PINS; Consumer sector; Shares outstanding: 673.5 million; Market cap: $14.8 billion; No dividend paid; Takeover Target Rating: Medium; www.pinterest.com) operates a social media platform that relies on images to create user interest....

1 min read

Pat McKeough

Spinoffs

Our take on Elliott’s latest moves

Activist investor Elliott Management is one the world’s largest hedge funds, with $55.7 billion in assets under management as of June 30, 2022. Here’s our take on three of Elliott’s recent investments.

PAYPAL HOLDINGS INC. $99 is a buy for aggressive investors. The company (Nasdaq symbol PYPL; Finance sector; Shares outstanding: 1.2 billion; Market cap: $118.8 billion; No dividends paid; Takeover Target Rating: Medium; www.paypal.com) processes online transactions on millions of websites, including purchases made on eBay, its former parent company.

The company recently announced a new agreement with activist investment firm Elliott Investment Management, which owns $2 billion of the company’s stock.

The activist will support PayPal’s current restructuring plan, which involves focusing on building transaction volumes to generate higher profits, rather than focusing on adding new users....

2 min read

Pat McKeough

Spinoffs

Spinoff is the next step to boost value

In 2021, due to activist investor pressure from Jana Partners, Labcorp carried out a strategic review. That failed to result in a sale of the company. Instead, Labcorp initiated a quarterly dividend and a $2.5-billion share repurchase program.

To further boost shareholder value, Labcorp is now spinning off its faster-growing clinical development business....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: General Electric Co.

GENERAL ELECTRIC CO. $80 remains a hold. The conglomerate (New York symbol GE; Manufacturing sector; Shares outstanding: 1.1 billion; Market cap: $88.0 billion; Dividend yield: 0.4%; Takeover Target Rating: Medium; www.ge.com) plans to break itself up into three separate companies.

In early 2023, GE will hand out shares in its GE HealthCare business (it makes X-ray equipment, MRI and ultrasound scanners) as tax-deferred dividends....

1 min read

Pat McKeough

Spinoffs

Both are poised to move higher

Conagra spun off its potato-processing business Lamb Weston in November 2016; investors received one Lamb Weston share for every three Conagra shares they held. Since the split, Conagra is down 6%, but Lamb Weston has soared 140%.

Both stocks took a step back as a result of COVID-19 lockdowns, but they are now close to their pre-pandemic levels....

3 min read

Pat McKeough

How To Invest

Q: What is TSI’s opinion of 23andMe on Nasdaq? Thank you for all the great advice over the years.

A: 23andMe Holding Co., $4.64, symbol ME on Nasdaq (Shares outstanding: 451.3 million; Market cap: $2.1 billion; www.23andme.com), is a provider of consumer genetics testing. It has created the world’s largest crowd-sourced platform for genetic research; more than 80% of its customers have agreed to have their genetic profiles available on the platform.

In February 2021, VG Acquisition Corp., a special purpose acquisition company or SPAC backed by British billionaire Richard Branson’s Virgin Group, announced that it would merge with privately held 23andMe to complete the qualifying transaction for this type of acquisition.

SPACs are a specialized kind of IPO (Initial Public Offering, or new stock issue)....

4 min read

Pat McKeough

How To Invest

What is Pat’s commentary for the week of August 16, 2022

We’ve often pointed out that growth by acquisition is inherently riskier than internal growth since it carries an above-average chance of unpleasant surprises. That’s because a buyer of something rarely knows as much about it as the seller.

Still, some companies handle acquisitions better than others, and successfully integrating those purchases can spur strong growth and share-price gains for their investors.

AltaGas took on a lot of risk with a huge acquisition in July 2018....

11 min read

Pat McKeough

How To Invest

Spinoffs & Takeovers Hotline – Friday, August 12, 2022

YELP INC., $38.23, symbol YELP on New York, lets people rate and review local businesses such as restaurants, retail stores and service providers. They do that by detailing their experiences for other patrons and assigning a business a rating of up to five stars....

9 min read

Pat McKeough

How To Invest

Power Growth Investor Hotline – Friday, August 12, 2022

AMAZON.COM INC., $143.55, symbol AMZN on Nasdaq, is a buy. The company is one of the world’s largest online retailers. It’s also the third-largest digital ad provider in the U.S. Through its Amazon Web Services (AWS), the company is also one of the world’s largest cloud infrastructure service providers.

Amazon is now buying Roomba maker iRobot Corp....

7 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.