A spin-off is a subsidiary separated from its parent company, and start trading as an independent stock. Many studies conducted through the years prove that these stocks achieve an excess return of more than 10% per year above the main indices (see more details here), and this is why it’s a great place to invest in.
Below is a list of all spin-offs traded in US exchanges. In the future, we’ll expand it to include international spinoffs as well.
How to invest in spinoffs
For the LongRunPlan portfolio, I pick only the best spinoffs after doing a comprehensive analysis and valuation process that ensure it is a quality company traded deeply under its fair value.
If you want to invest in spinoff stocks passively instead (meaning without doing any detailed analysis or valuation), the best way is the following:
- buy the 20 most recent spinoffs in an equal amount of money.
- buy any new spinoff that starts trading. Use new money or sell some from the current holdings so all stocks will be held at an equal amount of money.
- sell each stock 2 years after you bought it, as this has proved to be the point in time where spinoffs reached their maximal return after the separation.
| Symbol | Name | Exchange | Parent Symbol | Parent Name | Separation Date | |
|---|---|---|---|---|---|---|
| NASDAQ | Jan 2020 | |||||
| NASDAQ | Jan 2020 | |||||
| NASDAQ | Nov 2019 | |||||
| NYSE | Oct 2019 | |||||
| NASDAQ | Oct 2019 | |||||
| NASDAQ | Oct 2019 | |||||
| NYSE | Sep 2019 |