The 40% Rule: How to Time Your Entry Into a Spin-Off When a new spin-off hits the market, the first weeks are often defined by relentless, indiscriminate selling. Understanding how to identify when that selling pressure is exhausted — and when to step in — is one of the most repeatable edges in spin-off investing. [...]
Podcast: My "Dividend as a Catalyst" Playbook This podcast episode is a little different. It is just me recording (usually I have a guest!). Here's what I cover: 1:15 - What is the "Dividend as a Catalyst" Playbook 2:30 - Case Study #1 : Kontoor Brands (KTB) 6:20 - Case Study #2: Jackson Financial [...]
Colin King of Circle City Group Capital Talks Building a $28MM Holding Co and Magnera (MAGN), a Recent Spin-off. Last week, I finally got to speak to Colin King of Circle City Capital Group. Colin and I have exchanged emails and DMs for years, and so I was really looking forward to our conversation. [...]
Derek Pilecki of Gator Capital Discusses His Approach to Investing in Financial Spin-offs I loved having the opportunity to talk to Derek Pilecki of Gator Capital about his approach to investing in spin-offs. Derek’s hedge fund has compounded at 20.99% since inception on July 1, 2008. You can request to receive his quarterly letters [...]
10 Rules for Spin-off Success I've been investing in spin-offs for the past 15 years and have learned many lessons. How'd I learn them? Mainly, the hard way! But today I'm sharing those lessons so you don't have to make the same mistakes. #1. Forget that “spin-offs outperform” In aggregate, they generally will but [...]
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 [...]
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 [...]