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 (see LSYN and 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 (%)|
|'05-'18 Total Return||511.56||197.46||314.10|
Source: Bloomberg. As of May 24, 2018.