Stock Spin-offs Continue to Outperform

It has been a while since we’ve taken a look at the relative performance of the Bloomberg US Spin-off Index so we pulled the latest data today. As displayed below, from 12/31/2005 to today (5/24/2018) the index has generated a total return of ~512%, outpacing the S&P 500 by 314%. It has outperformed the US market in 9 out of 13 of the previous years and is on pace to outperform again in 2018.

For background, the Bloomberg US Spin-off Index is market cap weighted and contains spin-offs with market capitalization of over $1 billion. As readers of this website know, the best spin-off opportunities are generally <$1BN in market cap (seeย LSYNย andย NVTR ) as they tend to be under-followed and subject to indiscriminate selling. Stay tuned for some new recommendations….

Bloomberg US Spin-off Index Return (%)S&P 500 Index Return (%)Relative Return (%)
2018 YTD6.162.733.43
201735.1521.8213.33
201623.2511.9511.30
2015-0.821.37-2.19
201410.6113.68-3.07
201340.4832.378.11
201251.0015.9935.01
2011-4.642.11-6.75
201028.2015.0613.14
200935.0126.458.56
2008-41.00-37.00-4.00
200716.105.5710.53
200623.3215.787.54
20055.984.911.07
Median:19.6812.827.83
'05-'18 Total Return511.56197.46314.10

Source: Bloomberg. As of May 24, 2018.