Profiting When Companies Split Up

Investors drawn to the reemergence of marquee names like these may be onto something: investing in spinoffs can be very profitable. Nearly two-thirds of the companies spun off over the last three years have beaten the Standard & Poor’s 500-stock index this year, according to figures from Spin-Off Advisors, a Chicago research firm.

- New York Times

New York Times has a long piece on spinoffs and how they perform after their listing. Now this might be a news to NYT, but this is a well known anomaly and many shrewed investors track spinoffs for such easy profit making opportunities.

If you want to benefit from investing in spinoffs read Joel Greeblatt's excellent book- You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits . He gives a reasoning behind such moves, tells you how to analyse them and when to buy them.

It offers several ideas to uncover such low risk ideas. That book came out several years ago, obviously the New York Times as always is behind the curve.

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