Spinoff Report
HWM & ARNC: Market Confusion Surrounds Newly Separated Industrials
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.

  • The Edge Recommends Investors Hold HWM (Ex-Spin) / Shorter-Term Investors Recommended Exit ARNC (Spin) at Current Levels
  • HWM: Superior EBITDA Margins Compared to Peers / Accumulate at Lower Levels
  • ARNC: Pension & Grenfell Liability Transfer Remains a Concern / Index Selling as ARNC Enters the SmallCap 600
  • Activist Firm Elliott Management Remains Invested Into Separation / First Day of Regular Trading April 1, 2020
  • HWM is a Current Spinoff Model Portfolio Holding / ARNC Exits the MP at the End of Today's (April 2) VWAP
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