Month: April 2014

Why Spinoffs outperform the market by 22% year after year


My name is Stephane Manos and I run the Special-Situations Department at Valsef Capital. I invest in event driven investments, primarily spinoffs. Most of my investments are time specific. There is something happening in the next 6-18 months in a companys’ timeline and I follow these events closely as things change.
Since I was in my teens, I have always followed the stock market and have been a do-it- yourself investor for the longest time. I began investing full time over 2 years ago and decided to focus on this special part of the market that generally outperforms the market.

I am also a contributor on the richest : January 2013, STARZ was spun off from Liberty Media Corporation and began trading at 14$. STARZ closed the year at 30$, generating a return of over 100% in less than 1 year. Many similar opportunities exist in the investment world of spinoffs.

What is a spinoff

A “Parent” company spins off a division into its own standalone company. This “division” is usually a “bad” asset, dragging down the performance of the parent. Sometimes, management spins off a jewel of a business, that is not being recognized in a huge organization. Companies opt for spinoffs instead of a division sale because it allows them to “get rid” of the unit tax free for themselves and their shareholders.

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