Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, February 12, 2010

Article Excerpt

MOTOROLA INC., $7.15, New York symbol MOT, will split itself into two separate companies in the first quarter of 2011. The parent company will continue to make and sell Motorola’s cellphones and set-top boxes, which unscramble cable and satellite TV signals. Together, these two products accounted for 68% of Motorola’s 2009 sales. The new company will make and sell communication products for industrial users. These products include two-way radios, bar-code scanners and equipment for wireless networks. Both companies will continue to use the Motorola name. Motorola will hand out shares in the industrial company to its shareholders as a special dividend. Investors will not have to pay capital-gains taxes on their new shares until they sell them. When splits like this occur, both companies usually do better than comparable stocks for a period of years. However, Motorola’s main cellphone business continues to lose money and market share in the face of strong competition from Apple’s iPhone and Research in Motion’s BlackBerry. Motorola is…