Topic: How To Invest

What is Pat’s commentary for the week of March 11, 2025

Article Excerpt

This week, we spotlight a company that has unlocked value for investors with several successful spinoffs. We think it’s likely to do so again. Specifically, since 2016, conglomerate Danaher has completed three separate spinoffs. As we often remind investors, spinoffs are the closest thing you can find to a sure thing. That’s because studies show spinoffs, after an initial adjustment period, tend to outperform groups of comparable stocks for several years. For that matter, the parent companies also tend to outperform comparable firms for several years after the split. Of course, not all spinoffs or parents go up after their split. But the odds are with you. Regardless, successful investors always keep TSI’s three-part investment approach top of mind, even when evaluating spinoffs: 1: Invest mainly in well-established, mainly dividend-paying companies; 2: Spread your money out across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer Goods & Services; Finance; and Utilities); and 3: Downplay or avoid stocks that are getting excess…