I was first attracted to AFI because it’s a small cap spinoff, and small cap spinoffs tend to outperform the market and outperform other spinoffs, as I’ve noted in prior write-ups. https://stockspinoffinvesting.com/stock-spinoff-performance-by-market-cap/ After reviewing AFI’s form 10, AFI’s analyst presentation, and the flooring sector, I’ve concluded that AFI has limited downside and the potential to [...]
Take a look at Armstrong Flooring. Ticker is AFI. I'm working on a full write up, but here's the short pitch. AFI sells flooring material which is benefiting from a strong housing market. AFI was spun out of Armstrong as it was underperforming with revenue and EBITDA flat to down over the past three years. Management [...]
Nuvectra (Ticker: NVTR) first piqued my interest because it is a microcap spinoff and microcap spinoffs generate huge returns in year one. See the chart below: However, you have to be extremely careful investing in spinoffs and especially microcap spinoffs. While the average performance is extremely attractive, there is huge dispersion in returns. As an [...]
I wanted to share a quick stock spinoff analysis. I downloaded all the stock spinoff data that was available on Bloomberg and then analyzed total 1 year return, 3 year return and 5 year return, by market capitalization. Here is one key takeaway: microcap spinoffs outperform in year 1. Specifically, “Less than $500mm Market Cap Spinoffs,” [...]
A stock spinoff occurs when a publicly traded company splits into two companies. Let’s walk through an example to see what that really means: Example: ConocoPhillips Spinning off Phillips 66 In 2011, ConocoPhillips announced that it would be splitting its company in two. The parent company would continue to own the upstream assets [...]
As the chart above shows, stock spinoffs can be a fertile area to find profitable investment ideas. Joel Greenblatt, founder of Gotham Capital, would agree. In “You Can Be a Stock Market Genius” he writes: “You can make a pile of money investing in spinoffs. The facts are overwhelming. Stocks of spinoff companies significantly and [...]