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>Small caps generally trade between a 50% discount to the S&amp;P 500 and a 50% premium. The current discount is 22%.</li>
<li>Relative periods of outperformance tend to last for waves of at least 13 years.</li>
<li>The current dominance of large caps over small caps has lasted ~13 years. This suggests the cycle could be due to change.</li>
</ul>


Small caps generally trade between a 50% discount to the S&amp;P 500 and a 50% premium. The current discount is 22%.
Relative periods of outperformance tend to last for waves of at least 13 years.
The current dominance of large caps over small caps has lasted ~13 years. This suggests the cycle could be due to change.


<ul>
<li>Honeywell International (HON) announced its plan to spin off its Advanced Materials business on October 8, 2024.</li>
<li>Subsequently, on February 6, 2025, the company revealed its intention to separate into three independent entities by also spinning off its Aerospace and Automation divisions.</li>
<li>Automation (49% of revenue): This segment will concentrate on developing advanced automation technologies.</li>
</ul>


Honeywell International (HON) announced its plan to spin off its Advanced Materials business on October 8, 2024.
Subsequently, on February 6, 2025, the company revealed its intention to separate into three independent entities by also spinning off its Aerospace and Automation divisions.
Automation (49% of revenue): This segment will concentrate on developing advanced automation technologies.


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

Index Rebalance

<ul>
<li>
<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> will replace <a href="https://www.smartkarma.com/entities/walgreens-boots-alliance-inc" target="_blank" data-smartkarma-citation="entities:1118:1" rel="noopener">Walgreens Boots Alliance (WBA US)</a> in the <a href="https://www.smartkarma.com/entities/dow-jones-industrial-average" target="_blank" data-smartkarma-citation="entities:22887:1" rel="noopener">Dow Jones Industrial Average (INDU INDEX)</a> at the close on 23 February.</li>
<li>Passives will need to sell a lot of <a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> following the 3:1 stock split and buy a lot of <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>. </li>
<li>Given the ad hoc nature of the rebalances and the short timeline between announcement and implementation, the stocks could move over the rest of the week.</li>
</ul>



Amazon.com Inc (AMZN US) will replace Walgreens Boots Alliance (WBA US) in the Dow Jones Industrial Average (INDU INDEX) at the close on 23 February.
Passives will need to sell a lot of Walmart (WMT US) following the 3:1 stock split and buy a lot of Amazon.com Inc (AMZN US). 
Given the ad hoc nature of the rebalances and the short timeline between announcement and implementation, the stocks could move over the rest of the week.


Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)

<ul><li>On June 29, 2026, Honeywell will break into two large-cap industrials: Honeywell Aerospace (HONA) and Honeywell Technologies (HON).</li><li>I think the breakup unlocks value. My base-case sum-of-the-parts points to ~24% upside, even assuming both pieces trade at a discount to peers.</li><li>But that discount isn’t enough to make me buy ahead of the spin.</li></ul>

On June 29, 2026, Honeywell will break into two large-cap industrials: Honeywell Aerospace (HONA) and Honeywell Technologies (HON).I think the breakup unlocks value. My base-case sum-of-the-parts points to ~24% upside, even assuming both pieces trade at a discount to peers.But that discount isn’t enough to make me buy ahead of the spin.

Honeywell (HON): The Crown Jewel and the Turnaround

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

Honeywell International / Equity Bottom-Up

<ul><li>Honeywell International has moved closer to the end of a multiyear portfolio overhaul after agreeing to sell its Productivity Solutions & Services business to Brady Corp. for $1.4 billion in cash, a deal that brings fresh attention to how much strategic value still sits inside the industrial group’s reshaping portfolio.</li><li>The transaction covers Honeywell’s barcode scanners, mobile computers, printing systems, software, and related services used in high-volume data collection and tracking, serving customers across logistics, warehousing, manufacturing, and retail.</li><li>The unit generated roughly $1.1 billion of sales in 2025 and employs about 3,000 people globally.</li></ul>

Honeywell International has moved closer to the end of a multiyear portfolio overhaul after agreeing to sell its Productivity Solutions & Services business to Brady Corp. for $1.4 billion in cash, a deal that brings fresh attention to how much strategic value still sits inside the industrial group’s reshaping portfolio.The transaction covers Honeywell’s barcode scanners, mobile computers, printing systems, software, and related services used in high-volume data collection and tracking, serving customers across logistics, warehousing, manufacturing, and retail.The unit generated roughly $1.1 billion of sales in 2025 and employs about 3,000 people globally.

Honeywell: The $1.4 Billion Brady Corp. Sale Reveals Where The Portfolio Is Heading!

United States

Honeywell International Inc. is a worldwide diversified technology and manufacturing company providing aerospace products and services, control, sensing and security technologies, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals, and energy efficient products and solutions.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Honeywell International (HON US)

Weekly Update (WDC, SNDK, MRP, IAC)

Small caps generally trade between a 50% discount to the S&P 500 and a 50% premium. The current discount is 22%. Relative periods of outperformance...

Richard Howe

Weekly Update (MRP, WDC, HON, LGFA)

Honeywell International (HON) announced its plan to spin off its Advanced Materials business on October 8, 2024. Subsequently, on February 6, 2025,...

Richard Howe

Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)

Amazon replaces Walgreen Boots in the Dow Jones Industrial Average at the close on 23 February following Walmart's stock split. There will be over...

Brian Freitas

Honeywell (HON): The Crown Jewel and the Turnaround

On June 29, 2026, Honeywell will break into two large-cap industrials: Honeywell Aerospace (HONA) and Honeywell Technologies (HON).

Richard Howe

Honeywell: The $1.4 Billion Brady Corp. Sale Reveals Where The Portfolio Is Heading!

Honeywell International has moved closer to the end of a multiyear portfolio overhaul after agreeing to sell its Productivity Solutions &...

Baptista Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)