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Being Spun off by their Parent companies in 2019, both Kontoor Brands (KTB) and Covetrus (CVET) saw short-term selling pressure hit their stock price either due to the initial transfer of debt or the index play associated with the break-up. Since hitting their respective lows and seeing a rebound in its price, we believe now is the time to refresh your notes and take a look at these situations. Likewise, click for more on what’s coming up.
15 Jul 2019
To source actionable ideas in the Spinoff space, look no further than the weekly Screener enclosed – all completed Spins (2010-19) can be sorted by region, sector, 1-year and overall returns, Parents vs. Spins, and Spin dates, helping you find those hidden situations worth a further look. We use the Screener to identify fallen Spinoffs, track the two-year tax-free takeover rule, and watch performances of companies that have broken up before and have newly announced Spins. Look inside for more.
12 Jul 2019
Since ConAgra’s (CAG) acquisition of Pinnacle Foods in October 2018, there have been 6 insider purchases but none as significant as the most recent open market buy from a Director on June 28, who has a perfect record of purchasing shares of companies he’s been on the board of. Also, recent Spinoff IAA, Inc. (IAA) and its duopoly in a niche space provides long-term cash visibility for the company. Click for more details.
08 Jul 2019
With the exception of 2018, there have been more Spinoffs completed in the second half of the year than in the first. We expect this to ring true in 2019 as well, given there have been 14 completed separations so far this year with another 15 scheduled (and more potentially to be announced). By combining the attached Screener (historical performances) and the Upcoming Calendars, you can source the best situations ahead and catch those unique Fallen Spins for further alpha.
05 Jul 2019
With James Dolan missing out on free agency over the weekend for the basketball team, the New York Knicks, as well as Fox Corp’s share price underperforming since its March 2019 Spin-merger, the recent share price correction for both Madison Square Garden (MSG) and Fox Corp (FOXA) has not been on the basis of any fundamental weakness. Therefore, we see this as an opportune time to enter both names. Click here for more details.
01 Jul 2019
The US 2-year tax-free takeover rule is always a key factor to account for when sourcing potential takeover plays in the Spinoff space, which is where this Screener helps. Currently, there are seven Spinoffs that are within six months of the 2-year mark from their listing. For example, we highlighted both Aptiv Plc (APTV), its Spin Delphi Technologies Plc (DLPH), and Hamilton Beach Brands, Inc. (HBB) as potential takeover targets. Check inside for more angles on the Spinoff space.
28 Jun 2019