Sizing Up a Pair of Spinoffs

With the Dow Jones Industrial Average and S&P 500 near all-time highs again after last week's market rally, investors must be creative to find undervalued plays. I believe value can be found in spinoffs as the category has historically outperformed the overall market.  The primary reason for this is that management is more focused on improving the company's business fundamentals once it leaves a larger conglomerate.

I generally like to wait at least a few months after a company is spun off to give current shareholders in the parent time to sell their shares in the newly spun company, as most seem to prefer to stick with the larger company. I am currently looking at two spinoffs that seem undervalued, and both have seen insider buying recently....309 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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