What will happen to Atmus Filtration (ATMU) after the exchange concludes? One situation that I’m closely following is Cummin’s (CMI) spin off of Atmus Filtration (ATMU). The situation is/was a fun one to watch because there was an “odd lot” arbitrage. In a nutshell, there was an opportunity to make a low risk $2k. The [...]
Spin-off Mailbag: How do you get in touch with Investor Relations? One of the reasons that I love investing in small and micro-cap companies is that generally it’s easy to get in touch with management and/or investor relations. But sometimes, investor relations is hard to track down. Today, I’m going to walk through the specific [...]
Spin-off Mailbag: Why Don’t Investors Short All Spin-Offs? I got a great question in my Twitter DMs related to shorting spin-offs.... Here's my answer: First, it’s hard to short spin-offs right when they come out. Typically, no shares are available to borrow from my broker (Schwab) so shorting is challenging (maybe some brokers are better?). [...]
Spin-off Calendar Danaher (DHR) spun off Veralto Corporation (VLTO) on September 30. You can read my deep dive on Veralto here (paywall) Aramark (ARMK) spun off its uniform services business, Vestis (VSTS) on Sept 29. You can read my deep dive on Vestis here (paywall) On October 2, 2023, Kellogg (K) spun off WK Kellogg (KLG) in a tax-free transaction. You can read my notes here. On October 4, Novartis (NVS) spun off Sandoz [...]
Talking Spin-offs with Schroders The Value Perspective I recently had the opportunity to talk spin-offs with Juan Torres Rodriguez, host of The Value Perspective. I had a blast! Here's what we covered: 3:02: My Background 7:28: What is Special Situation Investing? 11:38: What are the main challenges of investing in special situations? 15:24: Special [...]
Joel Greenblatt Podcast Joel Greenblatt is my favorite investor. He specializes in special situations and generated 50% annual returns for a decade. Whenever he’s interviewed, I drop everything and listen in. Greenblatt was recently interviewed on the Investor’s Chronicles podcast. The whole interview is interesting, but my favorite section was towards the end when the [...]
Updated Spin-off Calendar Star Holding (STHO) was spun off of iStar (STAR) on Friday, March 31. You can read my thoughts here. Imminent Spin-offs: 1) Crane Co (CR) will be spun off from Crane NXT on Monday, April 3. You can read my notes here. 2) Madison Square Garden Entertainment (MSGE) will spin off Sphere Entertainment Co (SPHR) on April 20. You can read my notes here. Want a printable spin-off calendar? Here you go: Upcoming Spin-off Calendar [...]
Spin-offs with Insider Buying (March 2022) I recently scanned my spin-off / special sits watch list for insider buying and found 7 stocks that are worth highlighting. Let’s go in alphabetical order… Altisource (ASPS) Altisource is an old 2009 spin-off. For a period of time, it was one of the best performing spin-offs of [...]
Talking Spin-offs with Value Investor Chatter Last week, I had the opportunity to talk spin-offs with Beko Jang on the Value Investor Chatter Podcast. Here's what we covered: 5:01: Exploring the Benefits of Spin-off Investing 8:10: Forced Selling in Spin-offs 16:07: Analyzing Management Incentives 19:20: The Most Important Factors to Consider When Considering Investing [...]
Spin-offs In The 1950s Maurece Schiller was one of the first investors to write about special situations investing. In 1959, he wrote the book “How to Profit from Special Situations in the Stock Market”. After leaving Dartmouth, Schiller went to Wall Street to work as an investment advisor. He began studying the way corporate actions [...]
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 [...]
Spin-off Links - December 2020 Recently Announced Spin-offs XPO Logistics (XPO) recently announced that it will be spinning off its logistics business. Over the past year, management has been deliberating on how to unlock value given the company is trading at a discount. Management believes that by spinning-off the logistics segment, the structure of the [...]
This week, Greggory Miller and I continue our series on spin-off investing and other topics. In the below video, we discuss: Why you should start a blog or keep an investment journal. Lessons learned from spin-off failures. Our thoughts on the impact of the coronavirus. What stocks look interesting at current levels. We discussed [...]
I recently had the opportunity to chat with Greggory Miller of Spinoff Investing Simplified. In the video, we discussed my spin-off investing diligence process and some resources that would be helpful to those doing their own spin-off research. Feel free to skip to 4:53 of the video unless you want to hear me talk [...]
Stock Spin-off Interviews from the Money Show Last month, I had the pleasure of presenting at the Money Show in Philadelphia. My talk was titled How to Profit from Stock Spin-offs. The event was a lot of fun, and I'm planning to attend additional Money Show events going forward (I will be at [...]
Why Do Spin-offs Outperform? While not every spin-off will outperform (I’ve learned this lesson the hard way), on average, they do quite well. See below for long-term performance of Bloomberg spin-off Index vs. the S&P 500. What drives the outperformance? Usually stock spin-offs begin trading at a low valuation. This occurs for a couple [...]
My Interview on Investing in Stock Spin-offs Last week, I had the pleasure of speaking with Greggory Miller of Spin-off Investing Simplified. It was a great conversation and Gregg was kind enough to record the conversation. I've posted segments of the interview below for those who are interested. Why Invest in Stock [...]
(This article was originally published in February 2016, but I wanted to update it to add Warren Buffett and Mohnish Pabrai’s perspective on spinoffs) I’ve known for a while that many of the world’s Superinvestors advocate investing in spinoffs. After all, that’s one of the reasons why I originally became interested in researching spinoffs. While [...]
A reader of blog recently asked me the following question: “Is there a way to tell when the initial selling pressure has ceased by looking at volume or something? How long does it typically take?” This is a great question, and I apologize that it took me so long to answer. At the heart of [...]
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,” [...]