Pure Spinco Value Unlock
sidv@sidv
−2.7%
since Sep 30
The idea
I believe freshly spun-off companies get dumped by forced index selling and ignored by analysts, even as new management finally owns stock and runs the business for itself, so the mispricing fades over years. This basket owns only the spincos from the recent separation wave, spread across power, electronics, healthcare, services, consumer, and property, with no single name dominating. I keep a small cash reserve to add when a new spinoff gets dumped early, and I'm underwriting this as a multi-year hold, not a trade.
What it owns
- Grid, construction and building-materials businesses separated from conglomerate parents at a time when US infrastructure spending is accelerating. · GE VernovaIts gas turbine and grid businesses now report to their own board instead of a conglomerate, so focused management can capture value that the old structure hid., AmrizeThis US cement and building materials company was cut loose from Holcim with fresh management running it standalone for the first time., Everus Construction GroupIt is an electrical contracting arm now trading standalone with almost no analyst coverage, small enough that its own management can run it for better results than a utility parent., Knife RiverThis aggregates and construction materials company was spun from MDU Resources and remains small enough that few analysts track it, leaving room for management to close the orphan discount.25%
- Chip-adjacent and specialty-materials companies that operated inside slower conglomerates and now compete on their own growth rates. · SandiskThis flash memory business was separated from Western Digital so its board and management could run it for its own growth rather than the parent's needs., Qnity ElectronicsIt is DuPont's electronics materials business freshly spun and still being sold by index funds that cannot hold it, leaving the valuation compressed., Solstice Advanced MaterialsThis advanced materials business was separated from Honeywell so its own management could focus on refrigerants and specialty materials that the parent's size had buried., RalliantIt carries Fortive's precision technology businesses with its own board for the first time, able to prove its instruments franchise value as standalone coverage catches up.22%
- Mid-sized service and niche-product spincos with minimal analyst coverage, a classic setup for neglected orphans to revalue. · VeraltoIt is Danaher's water quality and product identification business running under its own team since separation, compounding the steady cash flows now that it owns its own results., PhiniaThis fuel systems and aftermarket parts business was spun from BorgWarner cheap because markets lumped it with combustion decline, though its cash flows prove durable., Amentum HoldingsThis government services business spun from Jacobs now has its own board working through post-separation execution, positioned to show the market its contract backlog value.15%
- Medical businesses separated from large industrial parents now have the freedom to invest in their own growth instead of funding conglomerate priorities. · GE HealthCare TechnologiesThis imaging business was the first major spin in this pattern, set free from GE to compound on its own faster than inside the conglomerate., SolventumThe healthcare division spun out from its former parent under new leadership is addressing years of underinvestment in wound care and health IT operations.13%
- Brand-heavy spincos that markets priced conservatively at separation and have not yet recovered to fair value. · KenvueIt holds J&J's consumer brands like Tylenol and Neutrogena, spun off and priced cheaply ever since, waiting for standalone management to unlock their value., Lionsgate StudiosThis film and TV studio finally separated from Starz so its library and content can trade on their own and be priced properly by a focused board.9%
- Real estate businesses carved out with clean balance sheets and straightforward business models that markets have not yet rewarded. · Millrose PropertiesIt holds Lennar's land bank spun off in a structure most investors have not studied, set up for focused management to prove the land-banking model over time., Curbline PropertiesIt is a convenience shopping center portfolio spun from SITE Centers, small and barely covered, where standalone management can grow this focused property base.8%
- Cash8%