Weekly Update (3134, Versant, Aumovio)
September 20, 2025
Before I get into my regular update, I want to share one fantastic chart that caught my eye.
It shows current earnings multiple of the S&P 500, 400 and 600, respectively. One takeaway is that large caps (S&P 500) are at the high end of their historical trading range.
Small caps (S&P 600) look much more reasonable. However, small caps haven’t grown earnings since 2022 (in contrast to large caps!) so the underperformance and cheaper valuation makes sense.
This week, I published an update on Hamee Corp. You can read it here.
Weekly Update
If you haven’t already, consider joining our discord channel (included with your paid subscription):
Join Discord Channel (you must create a free discord account to join)
It’s basically a chat room where we discuss what’s going on in the special situation market.
Here are a few things we discussed this week:
- Commentary from subscriber addressing why #2 players struggle vs. the industry leader
- Discussion on AUMOVIO
- Hamee discussion after earnings
Recent Spin-off
This week, Continental (CON) spun off its autoparts business, Aumovio, as a public company. The stock traded as low as €33.50 EUR but has since rallied.
Aumovio’s business consists of four different segments:
Aumovio is in the midst of a turnaround, and I was initially skeptical of managements rosy guidance.
But after reviewing the spin-off in more detail, it appears more credible.
In Q2 2025, Aumovio hit 4% EBIT margins. Guidance for 2025 is 2.5% to 4.0% (YTD: 2.8%).
Aumovio has already made progress on improving its margins. It closed 9 sites from 2019 to 2024 and plans to close 5 additional sites in the future. It removed 2 layers of management between 2023 and 2025 and believes it will be able to reduce SG&A headcount by an additional 2,000 employees. It is phasing out low margin products and emphasizing value based pricing.
Aumovio is currently trading at 7.4x 2025 EBIT and just 0.21x 2025 revenue.
It looks cheap versus comparable companies.
I think it’s worth €56/share, but I’m not anxious to buy the stock today.
Upcoming Spin-off
Sony Group Corporation (SONY) is planning to spin off 80% of its stake in Sony Financial Group Inc. (SFGI) on September 29, 2025.
This looks interesting to me as I see potential for indiscriminate selling. Sony Financial Service Group contributes ~10% of Company Net Income.
Sony Financial Group Inc. (SFGI) is the financial services arm of Sony, comprised of three main businesses:
- life insurance
- non-life insurance
- banking.
The spin-off will generate ~ ¥100BN in the current fiscal year and pay a ¥50BN annual dividend.
Comparable companies trade at a P/E multiple of 9.9x, Dividend Yield of 4.4x and P/B multiple of 1.2x.
Assuming the spin-off trades inline with peers, it will have a market cap of ~¥1 trillion.
If we see indiscriminate selling pressure, it could be an excellent opportunity because the stock should bounce back quickly given 1) the dividend initiation and 2) buyback authorization.
Spin-off Links
Comcast Spin-off (Versant) Files its Form 10 Information Statement
- Spin-off should take place by the end of the year
Top Golf VIC Write Up (must create free account to access)
- Good write up breaking down the demerger arbitrage opportunity
Recommendations Updates
- Hamee Corp
Hamee reported earnings on September 12, and the stock traded down ~6%. The headline earnings looked awful but they included many one-time and/or non-cash expenses. To me, the underlying business looks strong. The spin-off is on track for early November, and I expect it to serve as a hard catalyst to drive shares higher. My “de-merger arbitrage” investment case is on track. I see +13% to +39% upside over the next 3 months.
Spin-off Calendar
Upcoming Spin-off Calendar | Completed Spin-off Calendar
Current Positioning
(updated once a month)
Hope you had a great week!
Rich
Disclaimer:
Rich Howe, owner of Stock Spin-off Investing (“SSOI”), currently is long IDT, MEDXF, AAF, IAC, UNTC, HGHCF, WDC, MAGN, LION, STRZ, NLOP, BRSL and TSE: 3134. All expressions of opinion are subject to change without notice. This email is provided for informational purposes. Please do your own due diligence and consult with an investment adviser before buying any stock mentioned on www.stockspinoffinvesting.com.’
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