As I analyzed the investment decisions that I have made last year, I’ve come to realize that the one that made me most money and the one that would have made me a lot of money had I not been sucking my thumbs while I should be acting are both spin-off situations. Come to think of it, there were actually a good amount of spin-offs last year, but I only took the time and effort to analyze a few. As Joel Greenblatt noted, “The spin-off process itself is a fundamentally inefficient method of distributing stock to the wrong people.” If the extra profits are inherently built into the system, why not spend more time fishing in this area? Therefore, I plan to dig a little bit more into spin-offs during 2014.
In this article, I will analyze a spin-off opportunity that I am currently watching closely. The final details have not come out yet but by preparing ourselves to the greatest extent, we will be ready to act when the opportunity comes. Continue Reading »