Superinvestors and Stock Spin-offs
Joel Greenblatt
“You can make a pile of money investing in spin-offs. The facts are overwhelming. Stocks of spin-off companies significantly and consistently outperform the market averages.”
– Joel Greenblatt, Founder of Gotham Capital, Generated 50% returns annually for a decade
Seth Klarman
“Spin-offs often present attractive opportunities for value investors.”
– Seth Klarman, Founder of Baupost Capital, Legendary Value Investor
Charlie Munger
“Carefully study spin-offs.”
– Charlie Munger, Billionaire investors and right hand man to Warren Buffett
Select Stock Spin-off Studies
Study #1
A J.P.Morgan study of 231 spin-offs and carve-outs between 1985 and 1998 found that during the first 18 months of trading, spin-offs outperformed the S&P 500 by 11.3% while carveouts outperformed by 10.1%
Study #2
In 2013, Credit Suisse took a fresh look at the performance of spin-offs. They analyzed spin-offs from 1995 to 2012. The study showed that spin-offs outperformed the S&P 500 by 13.4% in the first 12 months after the spin-off date.
Study #3
Deloitte and the Edge Consulting Group analyzed spin-offs that occurred between 2000 and 2014. They found that spin-offs generated a 22% return in their first 12 months of trading, outperforming the MSCI world index by 21%.
Study #4
In May 2018, we analyzed the returns of the Bloomberg U.S. Spin-off Index vs. the returns of the S&P 500. We found that the Bloomberg U.S. Spin-off Index generated a 511% return from December 2005 to May 2018, outpacing the S&P 500 by 314%.
Recent Members Only Research
Allgeier SA Spin-off Deep Dive
Merger Arbitrage with 30% Upside (100%+ IRR)
Carrier Corp Spin-off Deep Dive
Arconic Corp Spin-off Deep Dive
“Odd Lot” Special Situation with $469 Potential Profit
Pfizer Generics Spin-off Overview
Five Star Senior Living Spin-off Overview
Special Situation with $1020 Expected Profit in 1 Month
Marathon Petroleum Speedway Spin-off Quick Summary
IAC Group Spin-off (Match.com) Overview
Ensign Group Spin-off (Pennant) Deep Dive
Nuance Spin-off (Cerence) Deep Dive
Performance of Recommendations
Additional Spin-off Analysis
Spin-off Links – March 2020
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Why You should Keep an Investment Journal
This week, Greggory Miller and I continue our series [...]
How I Analyze a Spin-off
I recently had the opportunity to chat with Greggory [...]
Spin-off Links – January 2020
Spin-off Links - January 2020 Odds and Ends We are [...]
Spin-off Links – December 2019
Spin-off Links - December 2019 Odds and Ends We are [...]
Spin-off Links – November 2019
Spin-off Links (November 2019) Recent Members Only Research Emmis Communications [...]