Over the past five years (2015-19), US Information Technology, Basic Materials and Consumer Staples Parents and Spinoffs represent the top three performing sectors (18%, 20% and 25% returns, respectively). The Spinoff Screener is a snapshot of how break-ups have performed – and paired with the Calendars can help to focus which sectors are expected to provide returns. Upcoming 2020 Spins in these sectors include SunPower (SPWR), Eagle Materials (EXP) and Post Holdings (POST).
10 July 2020
After its mispriced listing last week via the combination of Metso’s Minerals business and mining and minerals company, Outotec Corp. (OTE1V FH), leading player MOCORP is trading at a significant discount to its peers right now less than a week in trading. We believe it’s just a matter of time before the market picks up on this and hits our +50% Base Case. For more on MOCORP and our “Pick of the Fallen Spins”, click either the link or the PDF attached to this email.
06 July 2020
Fallen Spins (like Perspecta with a +22% gain) are prime candidates for returns when picked up at lower levels and their fundamentals come through with realized value – especially with another catalyst involved. There are currently 18 US post-Spin companies within six months of their 2-year tax-free takeover period expiring (and another 17 trading six months after the term expired). Use the Screener attached to identify these names and source a takeover play ahead of the announcement pop.
02 July 2020
This is the week! While a shorter week for the US markets, two Spinoffs will begin their first day of trading this Wednesday (July 1). The anticipated value creation split in Barry Diller’s IAC/InterActiveCorp (IAC) and Finland’s Metso Corp. (MEO1V FH). We recommend new investors to buy IAC (and current investors to hold) and to wait for a better entry point in Metso post-Spin. For more on each situation, click the link below or the PDF attached to this email.
29 June 2020
Weekly Screeners and Idea Generators are now attached to alert emails for convenience. Next week, both IAC/InterActiveCorp (IAC) and Metso Oyj (MEO1V FH) execute their respective US and European Spinoffs, joining the other completed break-ups in 2020 that have largely outperformed (the collection of six Spins already finished this year have returned a collective +16% already). Combine the enclosed Spinoff Screener and our forward calendars to see what other opportunities await.
26 June 2020
As the Spinoff space continues to outperform the broader markets, next week we will see two new companies breaking up, Metso Corp. (MEO1V FH) in Finland and IAC/InterActiveCorp (IAC) here in the US. Our updated analysis will be out later this week. Likewise, we explore CTVA, a “Top Insider Buy” idea and the long-term opportunity in the stock. Click here for more.
22 June 2020
After our April 2020 release, Perspecta (PRSP) grabbed the attention of the market last week when activist JANA Partners took a position in the company, citing shares are undervalued and clearing away for a takeover in this Fallen Spinoff idea. The stock jumped +19%. This week, we look at the other two former Spins identified in that release (ACA and CTVA), as well as Metso’s upcoming June 30 break-up. For more, click the link or the PDF attached.
15 June 2020
One of our Fallen Spinoff ideas, Perspecta (PRSP), has been picked up by activist JANA Partners and the stock jumped +19% as a result of today’s announcement, citing shares are undervalued and clearing away for a takeover since PRSP passed its two year tax-free mark (identified on the Spinoff Screener). PRSP was also part of our “Top Three Insider Buys”, along with former Spins ACA and CTVA, which continue to show value here.
12 June 2020
For those who missed our recently released analysis on HD Supply Holdings (HDS), we revisit this upcoming Spinoff and its history of value creation via divesting non-core assets since it was listed back in 2013. Likewise, Fallen Spinoff idea KAR is already up +18% since our entry recommendation on May 28 and believe has several catalysts for growth post-pandemic. Click here for more.
08 June 2020
Perspecta, Inc. (PRSP), a previous Fallen Spinoff picked from our Spinoff Screener, exited the Model Portfolio this week giving a +23% return in less than 2 months (since Apr 21, 2020). Our latest screened Fallen Spinoff idea is KAR Auction Services (KAR), which we believe has several catalysts for growth post-pandemic. Already up +13% since May 28, we continue to see more upside at current levels.
05 June 2020