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 (%) | |
|---|---|---|---|
| 2018 YTD | 6.16 | 2.73 | 3.43 |
| 2017 | 35.15 | 21.82 | 13.33 |
| 2016 | 23.25 | 11.95 | 11.30 |
| 2015 | -0.82 | 1.37 | -2.19 |
| 2014 | 10.61 | 13.68 | -3.07 |
| 2013 | 40.48 | 32.37 | 8.11 |
| 2012 | 51.00 | 15.99 | 35.01 |
| 2011 | -4.64 | 2.11 | -6.75 |
| 2010 | 28.20 | 15.06 | 13.14 |
| 2009 | 35.01 | 26.45 | 8.56 |
| 2008 | -41.00 | -37.00 | -4.00 |
| 2007 | 16.10 | 5.57 | 10.53 |
| 2006 | 23.32 | 15.78 | 7.54 |
| 2005 | 5.98 | 4.91 | 1.07 |
| Median: | 19.68 | 12.82 | 7.83 |
| '05-'18 Total Return | 511.56 | 197.46 | 314.10 |
Source: Bloomberg. As of May 24, 2018.
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