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Two special situations: a Spin-Off and a Sum-of-the-Parts

Recs

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February 04, 2011 – Comments (4) | RELATED TICKERS: ITT

I came across two interesting articles on special situations today, onr about an impending spin-off and one about a company that's current share price is significantly less than the value of the sum of its parts.

I know that I have mentioned ITT in the past. Here's another interesting article on the subject where the author speculates that the Company's defense business might come under significant selling pressure after it has been seperated from the fluid and motion and flow segments because the Department of Defense is cutting back on spending.

This selling pressure might enable investors to pick up shares of this well-run division at a great price, especially if it offloads a bunch of its debt on the other divisions.

ITT: Spinoff Opportunities

The second article talks about how the sum of the parts of the French conglomerate Viventi (VIVDY.PK) is worth 30% more than its current share price. This gap may narrow as the company either sells off or acquires the rest of the companies that it only has partial ownership in.

Vivendi: Well Defined Strategy, History of Significant Dividends Make for a Bargain at Current Price

Deej

4 Comments – Post Your Own

#1) On February 04, 2011 at 1:37 PM, Schmacko (46.20) wrote:

That seeking alpha article plagerized the crap out of me. It's pretty much word for word my write up on ITT from my blog (that I know no one reads, and I'm sure the seeking alpha guy is banking on that fact as well).

I don't know if I should be insulted or pleased.

My Caps blog on ITT written like 3 weeks before this article.

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#2) On February 04, 2011 at 2:47 PM, portefeuille (99.66) wrote:

Good old Vivendi. I "requested" them in 2009 and almost no one cares. Too busy making calls on stocks like SIRI ...

http://caps.fool.com/Ticker/VIVDY.PK/Scorecard.aspx

The home bias of U.S. investors is probably the worst mistake (apart from being a "bear", hehe) they make.

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#3) On February 04, 2011 at 2:51 PM, portefeuille (99.66) wrote:

#2 Similarly ignored is Porsche. Probably the "best" auto company in the world and no one cares. Too busy making calls on GM, F, TSLA. Oh well, hehe ...

http://caps.fool.com/Ticker/POAHY.PK/Scorecard.aspx

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#4) On February 04, 2011 at 2:52 PM, portefeuille (99.66) wrote:

#3 Are you not somewhat involved in the auto industry? You should make a call on Porsche preferred shares.

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