We hardly ever recommend buying new issues when they are first sold to the public, and often stay away from them for months, if not years, afterward. That’s because new issues often come to market when it’s a good time for the company and/or its insiders to sell, but that’s not necessarily a good time for you to buy.

Spinoffs are in many ways the opposite of new issues. Companies often do spinoffs when they feel it isn’t a good time to sell. Instead, they choose to hand out shares of the new firm to their shareholders. That often results in buying opportunities in undervalued stocks.

(In a just-published issue of Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets, we update our buy/sell/hold advice on a spinoff whose shares have soared 79% for us since September 2010. See below for further details on this potentially undervalued stock’s outlook.)

Why spinoffs are often undervalued stocks in disguise

When a spinoff begins trading, it stands to reason that investors will put a low price on it. After all, the spinoff hits the market with a large number of neutral, if not reluctant, stockholders who have limited expectations for it, and who are willing to sell when they get around to it. Moreover, there is often little, if any, brokerage research available on the new company.

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The only investors who might be willing to buy a new spinoff are those who have taken the trouble to read the voluminous material that companies hand out as part of the spinoff process. But on the whole, it pays to follow the lead of these seekers of undervalued stocks, and to hang on through months of sluggish trading while reluctant spinoff holders exercise their urge to sell.

Undervalued stocks: This spinoff is looking for growth in smartphones and tablet computers

In the current issue of Wall Street Stock Forecaster, we update our buy/sell/hold advice on Agilent Technologies Inc. (symbol A on New York).

Agilent makes testing systems that help improve electronic products, such as cellphones and computer networking equipment. The company was a unit of Hewlett-Packard Co. until 1999, when Hewlett spun it off as a separate company. In the current Wall Street Stock Forecaster, we take an in-depth look at the company’s development since the spinoff.

Agilent is now working on products that test devices designed for new, high-speed wireless networks, such as smartphones and tablet computers. That adds to the company’s growth prospects, especially as countries like China and India increase the speed and capacity of their wireless networks.

Get our complete analysis of Agilent—including our clear buy/sell/hold advice—FREE

As I mentioned, the stock has risen over 79% for us since September 2010. In the latest Wall Street Stock Forecaster, we look to see if it can go even higher.

We’ve based our analysis on all of Agilent’s fundamentals, including its latest sales and earnings, its debt level, and our outlook for its recent move into smartphones and tablet computers. We also look to see what effect Agilent’s soaring share price has had on its price-to-earnings (p/e) ratio, an indicator that can tell you whether or not a company is an undervalued stock.

We’ve concluded our analysis with clear advice on whether you should buy, hold—or sell—this unique investment.

You can get our full analysis, including our clear buy/sell/hold advice on Agilent and 18 other stocks in the fast-moving U.S. market in the latest Wall Street Stock Forecaster. What’s more, you can get this issue absolutely free when you subscribe today. Click here to learn how.