Invest in

Spinoffs

16.8%
7.7%
0.0%

Breaking Away

Breaking up isn’t hard to do on Wall Street. Activist investors and hedge fund bosses are increasingly pushing companies to unlock shareholder value by either splitting themselves or selling business units that don’t gel with the broader corporate direction. That idea has seemed to resonate with investors: on average, spinoffs have outperformed the market and industry peers during their first three years following separation from a corporate parent.[1] Why are spinoffs positioned to perform well? The new upstarts often have clear, singular management focus, accountability, lean operations and a strong alignment of stock performance with management incentives. In addition, a lack of analyst coverage and index membership can allow investors to enter at a time when fund managers are forced to exit. Why are spinoffs positioned to perform well? The new upstarts often have clear, singular management focus, accountability, lean operations and a strong alignment of stock performance with management incentives. In addition, a lack of analyst coverage and index membership can allow investors to enter at a time when fund managers are forced to exit. </br><b>Spinoffs in numbers: </b> </br>-Between December 2002 and March 2019 the Bloomberg U.S. Spin-Off Index produced a total return of 973 percent compared to 342 percent for the S&P 500.[2] </br>-In the U.S, spinoffs outperformed their peers by a cumulative 8 percent on average a year after splitting from their parent companies. In the three-year period following the split, spinoffs outperformed their peers by a cumulative 22 percent on average.[3] See More
16.8%
7.7%
0.0%
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Weight Segment & Stocks Symbol 1 YR Return
24.0% Health Care 9.8%
9.6% Cyclerion Therapeutics Inc. CYCN --
5.6% The Pennant Group Inc. PNTG --
5.5% Baudax Bio Inc BXRX --
3.2% 8xxxxxxx 8xxx 8xxx 88.8%
17.4% Consumer Discretionary 3.4%
4.2% 8xxxxxxxx 8xxx 8xxx 88.8%
4.0% 8xxxxxx 8xxxxx 8xxx 8xx --
3.7% 8xxxxxx 8xxxxx 8 8xxxxxx 8xxx 8x 88.8%
2.9% 8xxxxxx 8xxx 8xx 88.8%
2.4% 8xxxxxx 8xxxxx 8xxx 8xx 88.8%
15.1% Industrials 8.7%
4.2% 8xxxxx 8xxx 8xx 88.8%
4.1% 8xx 8xxx 8xx --
3.8% 8xxxxxx 8xxxxxxxxxxx 8xxx 8xxx 88.8%
3.1% 8xxx 8xxx 8xxxxxxx 8xxxx 8xxx 88.8%
15.1% Real Estate 0.2%
4.3% 8xxxxxxxxx 8xxxxxxxx 8xxxxxxxxx 8xxxx 8xxx 88.8%
3.8% 8xxxxx 8xxxx 8xxx 8xx 88.8%
3.6% 8xxxxxxxx 8xxxxxx 8xxx 8xxx 88.8%
3.4% 8xxxxxx 8xxxx 8xxx 8xxx 88.8%
10.7% Energy 35.2%
3.8% 8xxxxxxxx 8xxxxxxxx 8xxxxxxxxxx 8xxx 88.8%
2.7% 8xxxxxx 8 8xxxxxxx 8xxx 8xxx --
2.2% 8xxxxxx 8xxxxxx 8xxx 8xxx 88.8%
2.0% 8xx 8xxxxx 8xxxxxxx 8xxxxxxx 8xxx 8xxx 88.8%
8.2% Information Technology 0.4%
4.5% 8xxx 8xxxxxxxxxxx 8xxx 8xxx 88.8%
3.7% 8xxxxxxxx 8xxx 8xxx 88.8%
5.2% Materials 24.8%
5.2% 8xxxxx 8xxxxxxxxxx 8xxx 88.8%
4.3% Communication Services 20.6%
4.3% 8xxxxxxx 8xxxxxxxxxxxx 8xxxxxxx 8xxx 8xxx 88.8%
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