Founder at Stock Spin-off Investing, Stock Spin-Off Investing

Richard Howe

Founder at Stock Spin-off Investing

Stock Spin-Off Investing

Generate attractive returns by taking advantage of inefficiencies in the stock spin-off market.

Stock Spin-offs

Event-Driven

<ul><li>One factor that I closely follow in the spin-off universe is insider buying.</li><li>Here’s what Peter Lynch wrote about insiders and spin-offs in One Up on Wall Street: [Spin-offs] are a fertile area for amateur investors…….A month or two after the spinoff is completed, you can check to see if there is heavy insider buying among the new officers and directors.</li><li>There are four names in my universe that have interesting insider activity.</li></ul>

One factor that I closely follow in the spin-off universe is insider buying.Here’s what Peter Lynch wrote about insiders and spin-offs in One Up on Wall Street: [Spin-offs] are a fertile area for amateur investors…….A month or two after the spinoff is completed, you can check to see if there is heavy insider buying among the new officers and directors.There are four names in my universe that have interesting insider activity.

A Value Investing Journal, Acid Investments

Acid Investments

A Value Investing Journal

I love stonks and I love rambling. Sometimes, I feel it unfair to subject those around me with the inundation of my thoughts, so I tweet and I spill ink on here. Jokes aside, I love investing and edgy ideas; I hope to become a better investor and this is my journal to that end. I will be sharing value/special situations I come across organically or through other blogs/13F and I hope to provide a variant analytical view to said situations. I hope to receive constructive feedback and let’s grab some of dem benjamins together!

Equity Bottom-Up

<ul><li>In a nutshell, Jacobs, last year, conducted a reverse morris trust transaction to combine its Critical Missions Solutions and Cyber &amp; Intelligence government services business with Amentum, to form a publicly traded government service sector player.</li><li>Post transaction, Jacobs retained an ~8% stake, but indicated intentions to sell-down, in the spin prospectus.</li><li>Amentum’s shares have not done well since the spin, falling from ~$30 post spin to a mere $17 today.</li></ul>

In a nutshell, Jacobs, last year, conducted a reverse morris trust transaction to combine its Critical Missions Solutions and Cyber &amp; Intelligence government services business with Amentum, to form a publicly traded government service sector player.Post transaction, Jacobs retained an ~8% stake, but indicated intentions to sell-down, in the spin prospectus.Amentum’s shares have not done well since the spin, falling from ~$30 post spin to a mere $17 today.

Amentum (AMTM) - Well Telegraphed Secondary Sale Provides a Dislocation Opportunity

US-EU Index Rebalances / Quantitative Researcher

Dimitris Ioannidis

Global Financial Data and Analytics Platform

ORTEX

ORTEX is a global financial data and analytics platform providing real-time securities lending and short interest data, index rebalance data, holdings and insider transactions, trading signals, corporate actions and news,  stock machine learning and factor scores and other analytics. The majority of the data are downloadable and accessible through APIs.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/coinbase-global-inc" target="_blank" data-smartkarma-citation="entities:32227:1" rel="noopener">Coinbase Global (COIN US)</a> can be the unexpected addition by transition because of a high liquidity score and a close distance below the estimated transition threshold.</li>
<li>
<a href="https://www.smartkarma.com/entities/lennox-international-inc" target="_blank" data-smartkarma-citation="entities:16420:1" rel="noopener">Lennox International (LII US)</a> is the main candidate for addition by migration due to having the highest average mcap score and passing eligibility metrics.</li>
<li>
<a href="https://www.smartkarma.com/entities/illumina-inc" target="_blank" data-smartkarma-citation="entities:8015:1" rel="noopener">Illumina Inc (ILMN US)</a> has a muted conviction for addition because of ineligible earnings and a recent deletion from the index.</li>
</ul>



Coinbase Global (COIN US) can be the unexpected addition by transition because of a high liquidity score and a close distance below the estimated transition threshold.

Lennox International (LII US) is the main candidate for addition by migration due to having the highest average mcap score and passing eligibility metrics.

Illumina Inc (ILMN US) has a muted conviction for addition because of ineligible earnings and a recent deletion from the index.


S&P500 December 2024 Forecast (Final): Flipping the COIN

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> and capping changes will result in a round-trip trade of US$17.7bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.</li>
<li>There is over US$500m to trade in <a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom (AVGO US)</a>, <a href="https://www.smartkarma.com/entities/tesla-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla (TSLA US)</a>, <a href="https://www.smartkarma.com/entities/apollo-global-management-inc" target="_blank" data-smartkarma-citation="entities:28770:1" rel="noopener">Apollo Global Management (APO US)</a>, <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> and <a href="https://www.smartkarma.com/entities/workday-inc-class-a" target="_blank" data-smartkarma-citation="entities:5660:1" rel="noopener">Workday Inc Class A (WDAY US)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom (AVGO US)</a> swings from a small net buy to a large net sell following the rally in the stock last week.</li>
</ul>


Constituent changes to the S&amp;P 500 INDEX and capping changes will result in a round-trip trade of US$17.7bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.
There is over US$500m to trade in Broadcom (AVGO US), Tesla (TSLA US), Apollo Global Management (APO US), Amazon.com Inc (AMZN US) and Workday Inc Class A (WDAY US). 

Broadcom (AVGO US) swings from a small net buy to a large net sell following the rally in the stock last week.


Select Sector Indices and S&P Equal Weight Rebalance: US$17.7bn Round-Trip Trade Post Capping Cutoff

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>The MV Global Defense Industry Index represents the performance of companies in national defense industries.</li>
<li>
<a href="https://www.smartkarma.com/entities/amentum-holdings-inc" target="_blank" data-smartkarma-citation="entities:44105:1" rel="noopener">Amentum Holdings (AMTM US)</a> is an ADD and <a href="https://www.smartkarma.com/entities/chemring-group-plc" target="_blank" data-smartkarma-citation="entities:24801:1" rel="noopener">Chemring Group PLC (CHG LN)</a> is a DEL for the MV Global Defense Index in December 2024. </li>
<li>We expect a one-way flow of US$138mm for December 2024, which translates to a turnover of 8.6%.</li>
</ul>


The MV Global Defense Industry Index represents the performance of companies in national defense industries.

Amentum Holdings (AMTM US) is an ADD and Chemring Group PLC (CHG LN) is a DEL for the MV Global Defense Index in December 2024. 
We expect a one-way flow of US$138mm for December 2024, which translates to a turnover of 8.6%.


[Quiddity Index] MVIS Global Defense Index Dec24 Rebalance Results: Flow Expectations

United States

Amentum Holdings Inc operates as a holding company. The Company, through its subsidiaries, provides environment and climate sustainability, intelligence and counter threat, data fusion and analytics, engineering and integration, research and development, test and evaluation, and citizen systems solutions. Amentum Holdings serves customers worldwide.

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Amentum Holdings (AMTM US)

4 Spin-offs with Insider Buying

One factor that I closely follow in the spin-off universe is insider buying. Here’s what Peter Lynch wrote about insiders and spin-offs...

Richard Howe

Amentum (AMTM) - Well Telegraphed Secondary Sale Provides a Dislocation Opportunity

In a nutshell, Jacobs, last year, conducted a reverse morris trust transaction to combine its Critical Missions Solutions and Cyber & Intelligence...

Acid Investments

S&P500 December 2024 Forecast (Final): Flipping the COIN

Lennox International (LII US) - the top migration candidate - was announced as an addition to the S&P 500 on 18 December, soon after the quarterly...

Dimitris Ioannidis

Select Sector Indices and S&P Equal Weight Rebalance: US$17.7bn Round-Trip Trade Post Capping Cutoff

Constituent changes to the SnP500 Index and capping changes result in a round-trip trade of US$17.7bn across the Select Sector and the SnP500 Equal...

Brian Freitas

[Quiddity Index] MVIS Global Defense Index Dec24 Rebalance Results: Flow Expectations

The MVIS Global Defense Index Rebalance was announced Friday. The rebal is set for next Friday (20 Dec 2024) at the close. AMTM US is a buy, which...

Travis Lundy

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