In this case, the spinoff is the better buy

Article Excerpt

KAR Auction Services and its former subsidiary IAA continue to shift their operations online, which should work to limit COVID-19 disruptions. We, therefore, like their long-term outlook. Still, for your new buying, we prefer IAA given the growing number of insurance companies opting to sell damaged cars rather than repair them. KAR AUCTION SERVICES INC. $15 (New York symbol KAR; Manufacturing & Industry sector; Shares outstanding: 129.2 million; Market cap: $1.9 billion; Dividend suspended in August 2020; Takeover Target Rating: Medium; www.karglobal.com) is a hold. The company sells used and salvaged vehicles at more than 200 physical auction sites in the U.S., Canada, Mexico, Europe, and the U.K. It also sells vehicles over the Internet. In addition, the company provides related services, including vehicle inspection, storage, transportation, reconditioning and financing. In 2019, KAR sold 3.8 million vehicles valued at over $40 billion, in more than 80 countries worldwide. About 58% of the sales were made online. On June 28, 2019, the company completed…