The Big Split: 3 Stock Spinoffs Are Coming. Should You Buy?

InvestorPlace05-03

Stock spinoffs can be chances for companies to realize new potential in a business that doesn’t always get the attention it deserves. Vista Outdoor (VSTO): The outdoor lifestyle company will be ...

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Should You Buy?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Big Split: 3 Stock Spinoffs Are Coming. Should You Buy?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-03 21:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2024/05/the-big-split-3-stock-spinoffs-are-coming-should-you-buy/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Stock spinoffs can be chances for companies to realize new potential in a business that doesn’t always get the attention it deserves.\nVista Outdoor (VSTO): The outdoor lifestyle company will be ...</p>\n\n<a href=\"https://investorplace.com/2024/05/the-big-split-3-stock-spinoffs-are-coming-should-you-buy/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0320765489.SGD","symbol_name":"FTIF - Franklin Mutual US Value A Acc SGD","start_time":0,"source_url":"https://investorplace.com/2024/05/the-big-split-3-stock-spinoffs-are-coming-should-you-buy/","article_id":"2432035972","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2432035972","pubTimestamp":1714741406,"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"Stock spinoffs can unlock shareholder value but management sometimes uses them to get rid of unwanted, slow-growing businesses.","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","BK4190":"消闲用品","LU0496365809.HKD":"TEMPLETON GLOBAL INCOME \"A\" (HKD) INC (Q)","BK4532":"文艺复兴科技持仓","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU0211326755.USD":"TEMPLETON GLOBAL INCOME \"A\" (USD) ACC","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","BK4585":"ETF&股票定投概念","LU1291159041.SGD":"CPR Invest - Global Silver Age A2 Acc SGD-H","LU2089283258.USD":"安联环球可持续基金Cl AM Dis","LU0006061336.USD":"Blackrock US Small and MidCap Opportunities A2 USD","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0976567544.SGD":"FTIF - Templeton Global Income A Mdis SGD-H1","BK4007":"制药","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU1267930490.SGD":"TEMPLETON GLOBAL EQUITY INCOME \"AS\" (SGD) INC A","BK4566":"资本集团","LU0211326839.USD":"TEMPLETON GLOBAL INCOME \"A\" (USD) INC","BK4196":"保健护理服务","SWBI":"Smith And Wesson Brands Inc","BK4082":"医疗保健设备","VSTO":"Vista Outdoor Inc","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","LU0211328371.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (MDIS) (USD)   INC","BK4559":"巴菲特持仓","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","BK4588":"碎股","LU1989771016.USD":"东方汇理环球老龄化投资基金 A2 Acc","WDC":"西部数据","LU2023251221.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"AM\" (USD) INC","DVA":"达维塔保健","AOUT":"American Outdoor Brands, Inc.","MDT":"美敦力","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4512":"苹果概念","BK4504":"桥水持仓","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD","LU1989764748.USD":"东方汇理环球颠覆性机遇A2 Acc","BAX":"百特国际","LU0310799852.SGD":"FTIF - Templeton Global Equity Income A MDIS SGD","BK4170":"电脑硬件、储存设备及电脑周边","NVO":"诺和诺德"},"translate_title":"大拆分：3只股票即将分拆。该不该买？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BAX":1,"WDC":1,"VSTO":1,"SWBI":1,"NVO":1,"MDT":1,"DVA":1,"AOUT":1},"content_text":"Stock spinoffs can be chances for companies to realize new potential in a business that doesn’t always get the attention it deserves.\nVista Outdoor (VSTO): The outdoor lifestyle company will be spinning off its ammunition business to separate from its volatility.\nBaxter International (BAX): The renal care operations of the medical products stock will face potentially stiff competition when independent.\nWestern Digital (WDC): The flash memory unit from the hard-drive specialist could be spun off just as a rebound hits the memory market.\n\n\n\n\n\n \n\nSource: Yuriy K/Shutterstock.com\n\n\n\n“Do one thing and do it well.” Over time, companies forget that sage advice, preferring instead to build mini empires. Whether through acquisitions or internally developed projects, businesses swell with many tangential businesses. Some end up straying away from the company’s original objective, others are too small to make a difference.\nThe result: a bloated stock where neither the primary business nor the side projects do really well. The answer many companies take is to spin off the ancillary business into a free-standing, publicly traded company. By separating from the business the market more accurately value its operations. It also allows the new company to dedicate more resources towards serving its market instead of getting lost in the shuffle of the parent.\nBelow are three stock spinoffs set to occur within the next 12 months. Let’s take a closer look at each and see whether you should buy the business that will be going public.\nVista Outdoor (VSTO)\nSource: IgorGolovniov / Shutterstock.comOutdoor lifestyle leader Vista Outdoor (NYSE:VSTO) first proposed spinning off its ammunition business back in 2022. It wanted to separate the more staid outdoor equipment business from its more volatile ammo unit. It was not much different when Smith & Wesson Brands (NASDAQ:SWBI) and American Outdoor Brands (NASDAQ:AOUT) when the two separated in 2020.\nVista previously sold off its gun business and now just owns some of the leading brand names in ammunition, including Federal, Remington, CCI and Speer. The shooting sports division was renamed The Kinetic Group, and it will have NYSE ticker symbol HUNT when the spinoff is completed. \nAmmo generates the bulk of Vista’s revenue, some $1.1 billion through the first three quarters of fiscal year 2024. That equates to 53% of total revenue, however, it is a 19% year-over-year decline due to falling gun sales. \nAmmo tends to be subject to the same swings in emotion as firearms. Yet, hunting makes up large portions of ammo sales, so the volatility is not as dramatic. During shortages, though, prices can surge helping to increase profits.\nBecause of its premiere positioning, HUNT stock would make for a good portfolio addition as the number of households owning a firearm swells.\nBaxter International (BAX)\nSource: ShutterstockJust over a year ago, medical products specialist Baxter International (NYSE:BAX) announced it was spinning off its global renal care and acute therapies business into a new company. By separating the unit, Baxter hopes to become a simpler, “more integrated and nimble organization.“\nBaxter isn’t alone in shedding its renal care business. Last year, a joint venture between Medtronic (NYSE:MDT) and DaVita (NYSE:DVA) was spun off into an independent business called Mozarc Medical. \nEven as a standalone company with a narrow focus, Baxter’s renal care business would continue serving over a million patients in more than 70 countries. It currently generates about $5 billion annually in a market growing about 3%-4% a year. When separated, the business will be called Vantive and will face new competition.\nNovo Nordisk (NYSE:NVO) is looking to expand the indications its diabetes and weight-loss drugs Ozempic and Wegovy can treat. Kidney disease is one such area.\nLast October saw early success of semaglutide in limiting renal impairment in patients with type 2 diabetes and chronic kidney disease. It chose to halt testing early because it had reached all its endpoints. \nThat could limit Vantive’s ability to grow and might make the stock a tough sell.\nWestern Digital (WDC)\nSource: Valeriya Zankovych / Shutterstock.comComputer hard drive maker Western Digital (NASDAQ:WDC) wants to spin off its flash memory business after talks to merge it with partner Kioxia stalled. The purpose of the spinoff is to unlock value for WDC shareholders while at the same time giving each business “the strategic focus and resources to pursue opportunities in their respective markets.” The target date for the separation is the back half of 2024.\nWestern Digital got into the flash memory market in a big way in 2016, when it acquired SanDisk for $19 billion. The pandemic, though, seemed to take out all demand for flash memory, creating an industry glut. \nSamsung cut memory production last year due to excess inventories causing prices to plunge. However, it began raising them again this year. An industry recovery is expected by next year.\nWestern Digital and Kioxia reportedly increased first-quarter output to 1.22 million units, according to industry site Omdia. That’s a 20% increase over the 1.02 million units produced in the fourth quarter. That would be a fortuitous turnaround for the spinoff.\nShares of Western Digital have been rising ever since the separation was announced last year and the new company could make for an interesting play on the memory market.\nOn the date of publication, Rich Duprey held a LONG position in VSTO and SWBI stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.\nRich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSubmit\n\n\n\n\n\n\n\nArticle printed from InvestorPlace Media, https://investorplace.com/2024/05/the-big-split-3-stock-spinoffs-are-coming-should-you-buy/.\n©2024 InvestorPlace Media, LLC","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2432035972"}