Special Situation Investing

Friday, April 07, 2006

General - Spinoff Results

Fortune has a follow-up article on the performance of some recent spinoffs. These turned out to be some good picks, perhaps due to the specialized nature of the new companies. On average the 4 stocks have returned 50% since March 2005.

The article also lists some up and coming spin-offs: Tyco (TYC), Acco Brands (ABD), Cendant (CD) and Wendy's (WED).

Also, of note was another analysis piece on the historical performance of spin-offs (future results may not reflect past performance ...):

"Lehman Brothers strategist Chip Dickson recently studied 88 spinoffs done between 2000 and 2005 and found that they beat the S&P 500 by a staggering 45 percentage points on average in their first two years as independent companies."

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