Less than 2 months before its Spinoff, HD Supply Holdings, (HDS) announced today that it has opted to sell its Construction & Industrials business (Whitecap) for $2.9bn in cash to PE firm Clayton, Dubilier & Rice instead of Spinning it off to shareholders. Having entered our Model Portfolio in the lead up to the Spinoff, now that the short-term catalyst is gone and having generated a +21% return since our entry in June, we’ll be exiting HDS at the end of today’s (Aug 11, 2020) VWAP.
11 August 2020
We entered Synnex Corp. (SNX) on the back of insider buying and ahead of its upcoming Spinoff (expected Q4 2020) at the $87 level at the beginning of May 2020. Since then, following a strong earnings beat and a significant rally in a short two months, we are booking our pre-Spin profits of +36% in SNX, with a view to revisit the name once further clarity on the Spinoff is disclosed by the company.
02 July 2020
In light of recent market movements and to rebalance the Catalyst Model Portfolio, we have increased on several high conviction names and reduced the weighting of the largest holding in a partial booking of profits. Please see inside the alert for the list of actions taken at the end of today's (June 29) VWAPs.
29 June 2020
Alerts are now attached to the distribution emails for convenience. Synnex Corp. (SNX) released strong Q2FY20 earnings yesterday (June 25), beating estimates and providing impressive guidance for next quarter. Since our recommendation on May 1, 2020, on the back of a key insider buying pattern, the stock has returned +19% (vs. the S&P Index's +9% in the same period), and we believe several key factors provide further upside ahead of its planned Q4 2020 Spinoff.
26 June 2020
In order to most effectively communicate our highest conviction ideas to clients and maximize overall performance, we have combined the positions of the Spinoff and Special Situations Model Portfolios, creating the newly unified Catalyst Portfolio. We are also exiting a series of names, details on the full article.
04 June 2020
Yesterday (April 1, 2020) marked the first day of regular trading for the newly-separated Howmet Aerospace, Inc. (HWM, formerly Arconic, Inc. - ARNC) and Arconic Corp. (ARNC, Spinoff). The Parent previously made the same move to give its 2016 Spinoff its name and ticker (Alcoa Corp. - AA), resulting in significant market confusion, now being replicated with this new split. We are positive on HWM post-Spin's potential, and recommend looking for lower levels for entry into either entity.
02 April 2020
To take advantage of the market's recent movements, we're adding to our positions in Trane Technologies Plc (TT), Ingersoll Rand, Inc. (IR) and United Technologies Corp. (UTX). Our fundamentals remain intact for these companies, and the market conditions allow for lower increase levels.
12 March 2020
To take advantage of the market's recent movements, we're adding to our positions in IAC/InterActiveCorp. (IAC), The Madison Square Garden Co. (MSG) and United Technologies Corp. (UTX) ahead of their respective Spinoffs. Our fundamentals for these break-ups remain intact (and we are in the process of updating our MSG analysis with the recent Form 10), and warrant increases to their Model Portfolio positions. See the links below for more details and respective analyses/alerts.
10 March 2020
After trading starts Tuesday, the Spin-merged Ingersoll Rand, Inc. (IR) will see about 6.7% (27.5m shares) of net buying as index focused funds enter the stock on its inclusion in the S&P 500 Index, based on our analysis and a new press release confirming the news. According to the release, the new IR will enter the S&P 500 Index pre-market on Tuesday, March 3. The current IR (parent) will take the new name Trane Technologies Plc (TT), and remain in the S&P 500. Click in for our analysis.
28 February 2020
Last week’s earnings will be the last earnings release that Madison Square Garden Co. (MSG) will report as a combined entity as it is expected that the Spinoff of MSG Entertainment will take place by the end of March 2020, leaving MSG Sports as the RemainCo. While there is still no Form 10 out yet, it is likely the prospectus will be out either this week or next, after which we will be updating our Full Analysis.
10 February 2020