TSR’s partnered study with Deloitte exclusively on every ‘pure’ US Corporate Spinoffs over the past decade showed they produced an average +37% gain two years post listing. The ex-Parent companies delivered an average +11% over the same period.
So far, the S&P500 has delivered funds tracking it a +0.4% return in Q4. Whereas the returns for TSR’s Spinoff Portfolio has been +7.2%.
The art of investing in Spinoffs equals that of the core values of investors like: Joel Greenblatt, Bill Ackman, Dan Loeb, John Malone, Warren Buffett and David Einhorn. That is, the true value is discovered by doing the reading and deep analysis, e.g. every corporate filing, presentation, market movement and employee contract that’s publicly filed and more importantly, what’s relevant!
You only know and respect these renowned investors because they’ve done the work it takes ahead of emerging liquidity events to outperform the market. It all sounds obvious, but it takes-up a lot of time and resource - especially when there’s an average 60 annually - and that’s why The Spinoff Report was founded.
Spinoffs become pure play sector based companies, stocks that haven’t been widely valued yet. This is because the market generally ignores the approaching demerger, due to:
a. Not a lot of information exists + there’s rarely a roadshow,
b. It’s very time consuming to digest filings when multiple revisions are generated, and
c. When based on TSR’s study, only 64% of Spinoffs are in positive territory one year after break-up, it’s no wonder most investors wait for investment advice and miss the hidden opportunity to buy the best value Spinoffs that’ll outperform the market.
Research on Spinoffs
Nimble investor opportunity
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