There has been a lot of spin-off news since my last “spin-off links” article… But before we dive into it I just want to highlight that I just published a new idea. Usually I look for obscure, hidden opportunities, but my latest recommendation is a large cap that is too cheap to ignore. It’s a [...]
Value Investing Q&A Series - Brown University Earlier this year, I had the opportunity to talk about spin-offs (and answer questions) with members of the Value Investing community at Brown University. It was a lot of fun! What we covered: My background (0:57) Why I focus on spin-offs (1:49) What resources would I recommend [...]
How Peter Lynch Beat The Market Peter Lynch is known as one of the best stock pickers of all time. At Fidelity’s Magellan Fund, he averaged an astonishing 27.9% return over the course of 13 years. He also was a notorious fan of spin-offs. Here's what Lynch looked for when picking stocks. Look for [...]
3 Biggest Takeaways From Joel Greenblatt‘s Special Situation Class Joel Greenblatt‘s Special Situation Classes at Columbia University are a great source for practical investment advice. Today, we‘ll take a look at what he learned from different Spin-Off situations he discussed in his class. 1. Complicated, Messy, Obscure Joel Greenblatt focuses on situations that seem to [...]
Capitalizing On Volatility In Recent Spin-Offs Volatility is always high for recent spin-offs. You can take advantage of that by "selling volatility" in the options market. First, let's step back and cover how options are priced. Here's Joel Greenblatt: In general, professionals and academics calculate an option’s “correct” or theoretical price by first measuring the [...]
Dividend As A Catalyst One of my favorite spin-off strategies is the "dividend as a catalyst" trade. Here's how it works: Identify a spin-off that will be indiscriminately sold, determine the expected dividend yield, wait to buy until 30% of shares out have traded and the stock is trading at attractive implied dividend yield, sell [...]
Tax Rate Arbitrage One of my favorite new categories of special situations is "tax rate" arbitrage. Here's an example. Let's assume company XYZ is trading at $10 and will be paying a special dividend of $6. Buy XYZ for $10 and you must hold for 61 days (including date of div) for div to be [...]
Spin-off Links - March 2022 2022 spin-off activity is off to a strong start. But before we get into it, I just wanted to highlight that I published a deep dive of ZimmerBiomet (ZBH)’s recent spinal/dental spin-off, ZimVie (ZIMV) for premium subscribers. ZimVie Deep Dive In the coming weeks, I will publish deep dives on [...]
Spin-off Links - December 2021 There has been a TON of spin-off activity. New spin-off announcements, recent spin-offs trading, upcoming spin-offs - you name it, we got it.. Let’s get into it. New Spin-off Announcements On November 12, 2021, Johnson & Johnson (JNJ) announced that it will spin-off its consumer business ($15BN of revenue) within [...]
How I Grew My Paid Newsletter to Over $114K of Recurring Revenue 3 years after quitting my job and launching a paid newsletter, I can say, this is for real. 330 paying members +65% y/y revenue growth $114,000 annual recurring revenue Here are some reflections on my first 3 years as an entrepreneur. Focusing [...]
Spin-offs with Insider Buying (October 2021) This week, we have a couple new names popping up on our list. Let’s dig right into them…. Apartment Investment & Management (AIV) I know I promised some new names, but we are going to start with AIV which has seen even more insider buying. Apartment Investment & Management [...]
How to Short a Spin-off Before It Begins Trading I love spin-offs (shocker, I know). The main reason is that the indiscriminate selling pressure associated with spin-offs allows me to buy bargains. Why do spin-offs sell off when they begin trading? Seth Klarman of the Baupost Group explains why this dynamic exists in Margin [...]
Spin-off Links - October 2021 Before we get into this month’s spin-off news I just wanted to highlight that I will be raising prices on my premium newsletter at the end of the month (October 31 at midnight). The annual subscription will increase by 51% from $419/year to $635/year. The monthly subscription will increase by [...]
Spin-offs with Insider Buying (September 2021) In One Up on Wall Street, Peter Lynch wrote: [Spin-offs] are a fertile area for amateur investors…….A month or two after the spinoff is completed, you can check to see if there is heavy insider buying among the new officers and directors. This will confirm that they, too, believe [...]
Spin-off Links - August 2021 Before we get into this month’s spin-off news I just wanted to highlight some research I did on Thungela Resources. It is a spin-off from Anglo American, and at first blush, looks unappealing. However, if you dig beneath the surface, it gets a lot more interesting. In short, it’s crazy [...]
Thungela Resources: Buy the Toxic Waste About a month ago, I recommended that my premium subscribers buy Thungela Resources, a coal spin-off from Algo American. Since then, I’ve made it my largest personal investment, and it’s currently my highest conviction idea. The stock is up about 36% since my recommendation, but there is a lot [...]
Spin-offs with Insider Buying (August 2021) This month, we have a good amount of insider buying! Let’s go in alphabetical order. Armstrong Flooring (AFI) Armstrong Flooring is a name that I’ve followed for a while ever since it was spun out of Armstrong Worldwide. The company is in the midst of a turnaround. It recently [...]
Spin-off Links - June 2021 The spin-off bonanza continues. As the global economy recovers, companies that had halted their spin-off plans are now moving forward with them. And new companies are announcing break up plans in the never ending quest to create value. As a result, we are staying super busy. While it’s hard to [...]
Spin-off Links - May 2021 New Spin-off Announcements AT&T Inc.(T) announced that it had reached a deal to spin off WarnerMedia (CNN, HBO, TNT, TBS, and Warner Bros. studio) and simultaneously merge it with Discovery Inc. (DISCA), creating a new publicly traded company. The move comes just three years after AT&T’s creation of WarnerMedia through [...]
Spin-offs with Insider Buying (May 2021) This month, we have three (two new names and one name we’ve highlighted before) spin-offs with notable insider buying. Let’s go in alphabetical order. Apartment Investment & Management (AIV) Late last year, Apartment Investment & Management (AIV), known as Aimco, spun off Apartment Income REIT (AIRC). At the time, [...]
Spin-off Links - April 2021 Recently Announced Spin-offs Dell (DELL) announced last Wednesday that it plans to proceed with the spinoff of its 81% ownership of enterprise software maker, VMware, which it intends to complete in the fourth quarter of 2021. The announcement should not come as a surprise as the company said in July [...]
Spin-offs with Insider Buying (March 2021) This month, there has been a surprisingly large amount of insider buying. As usual, we will go in alphabetical order. Arconic Inc (ARNC) Arconic is a 2020 spin-off from Howmet Aerospace (HWM). It is focused on global rolled products, aluminum extrusions, and building and construction systems. Think large customized [...]
Spin-off Links - March 2021 There has been a ton of news in the spin-off world (both recent spins and new announcements) and I’ve been cranking out deep dives. It’s a weird time in the market. There are definite areas of froth (SPACs, EV companies, meme stocks, etc.), but at the same time, I’m finding [...]
Why You Need to Use Twitter I’ve wanted to write this article for a while. I delayed it time and again because I wanted to add more material. But I figure I will just publish this version, and then update the article over time. From 2006 to 2018, I worked at a large investment manager [...]
Spin-offs with Insider Buying (February 2021) This month, we saw some insider buying, but to be honest, there’s been more selling than buying. On the buying side, we will highlight Arlo Technologies (ARLO) and Dorchester Minerals (DMLP). On the selling side, we will highlight ANGI Homeservices (ANGI) and Bluebird Bio (BLUE). Let’s start with the [...]
Spin-off Links - February 2021 Before we get into recent spin-off news, I just wanted to highlight that I’m offering a 25% off discount on annual subscriptions to my premium service until Friday, Feb 5 at 5pm ET. Enter code “save25” at checkout if the code doesn’t automatically populate. Sign up here! Now is a [...]
Spin-offs with Insider Buying (January 2021) This week, we have some insider buying as well as some selling. Let’s go in alphabetical order… Arlo Technologies Arlo (ARLO) is a 2018 spin-off from Netgear (NTGR). Until recently, it has been an absolute disaster. It makes wireless cameras and has a loyal following. Competition is fierce with [...]
Top Ideas for 2021 For the five years prior to quitting in 2018, I worked for a large global investment bank. I learned a lot and enjoyed the people with whom I worked. But did I feel like a cog in the corporate industrial complex? Yep. The best thing about running your own business is [...]
Spin-off Links - January 2021 Recently Announced Spin-offs Encompass Health (EHC) recently announced that it is exploring strategic alternatives for its home health and hospice business. While the plans aren’t set in stone, the company is considering an IPO, spin-off, merger, or sale. The home health and hospice business accounts for 24% of 2019 revenues. [...]
BBX Capital: A Dollar Selling for 30 Cents December 28, 2020 Ticker: BBXIA Market Cap: $94MM Enterprise Value: $40MM Price: $4.85 Fair Value: $7.50 Upside: 55% Background While I closely follow all stock spin-offs, I’m especially drawn to the tiny ones. They are too small for institutional investors (and most retail investors), and sometimes I [...]