Profiting From Spinoffs
Throughout my career, I have done very well by investing in spinoffs. A certain magic seems to be released when a smaller business breaks free from a larger enterprise. Managers are allowed to focus on core competencies, exploit new opportunities and make structural improvements that just did not seem to happen when they were part of more bureaucratic organization with different goals.
Some spinoffs I received as part of owning the larger organization prior to the split. Phillips 66 (PSX), which I profiled yesterday, is an example. PSX was spun off from ConocoPhillips (COP) in April. Like a lot of spinoffs, it sold off at first as a lot of holders of Conoco wanted to own the production business. However, since it hit a bottom soon after the split, the shares are up some 15% and I continue to hold the shares....429 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.