Spin off company opportunities are as fleeting as they are lucrative and have emerged as a profit focal point for savvy investors. Dive into our list of nine recent spin-offs that hedge funds are betting on to be the next big winners in their portfolios and can be in yours!
9 Recent Spin Offs Hedge Funds are Betting On
Spin-offs—new companies created by separating a division or subsidiary from its parent company—offer a unique investment avenue with the promise of streamlined operations and renewed focus. Here are 9 recent spin offs hedge funds, ever on the lookout for high-growth potential, have zeroed in on that show significant promise:
Kenvue – Spun off from Johnson & Johnson (J&J). Market Capitalization (Market Cap): $50 million
Kenvue is a consumer healthcare company offering a variety of products in the baby care, skin health, and self-care categories. Hedge fund investment interest stems from the firm’s strong brand portfolio including such household names as Band-Aid, Listerine, and Tylenol. Independent of J&J’s medical device and pharmaceutical businesses, Kenvue makes for a compelling opportunity.
Madison Square Garden Entertainment Group (MSGEG) – Spun off from Madison Square Garden Sport Corporation. Market Cap: $1.6 billion
MSGEG provides live concerts and show event entertainment experiences in such recognized venues as Radio City Music Hall and Madison Square Garden. Hedge funds like the company’s growth potential driven by the post-pandemic resurgence of live venue gatherings and the competitive advantage a strong band and iconic venues provide.
Crane NXT Co. – A Crane Co. Spin Off. Market Cap: $1.4 billion
Crane NXT specializes in providing high-security technology for cash and electronic payment transactions and automated solutions. The firm is well positioned in the secure payment solutions industry, making it a sought-after, long-term hedge fund investment.
PHINIA – Spun off from BorgWarner. Market Cap: $1.3 billion
The company supplies fuel systems and aftermarket parts and operates in the automotive industry. PHINIA’s product offerings align well with the shift and growing low emissions efforts of most developed countries. The growth longevity of the firm’s cleaner, more efficient fuel systems is an attractive hedge fund investment attribute.
Vestis Corp. – Spun off from Aramark. Market Cap: $3 billion
Vestis provides B2B uniform rental programs, managed restroom services, and cleanroom garment processing. The firm’s comprehensive services and its well-established Fortune 500-to-small business clientele, coupled with the steady demand for uniforms and workplace supplies make Vestis a hedge fund investment favorite.
Profitable recent stock spinoffs are good long-term investments and like any investment should be thoroughly investigated prior to any investor capital commitment.
Veralto Corp. – Spun off from Danaher Corp. Market Cap: $23.5 billion
Veralto’s focus is in the water quality and peripheral aquatic product field. It provides state-of-the-art technology for municipal and wastewater treatment, food safety, and environmental monitoring. The company’s strong recurring revenue and high margins have attracted hedge funds as its essential water and product services are regarded as a staple defensive investment. Its attractiveness is further enhanced by the firm’s merger and acquisition growth potential.
GE HealthCare Technology, Inc – A General Electric (GE) Spin Off. Market Cap: $33 billion
GE HealthCare is one of the recent spin offs that specializes in health and pharmaceutical diagnostics, medical imaging, and patient monitoring technology. The key reasons for hedge fund interest are this spin off allows GE HealthCare to focus on its core healthcare operations, the firm’s established market presence, and the healthcare industry’s stable demand. The company’s core business focus is expected to improve operational efficiencies and enhance innovation fueling current and future profitability.
Kyndryl Holdings, Inc. – Spun off from IBM. Market Cap: $4.5 billion
Kyndryl manages, modernizes, and transforms business IT environments making it an IT infrastructure service provider. As an independent entity, hedge funds believe the firm can better align its strategic initiatives to market demand, increase its competitive position, and capture a sizable market share of the ever-growing IT services sector.
Vontier Corp. – A Fortive Corporation Spin Off. Market Cap: $5.2 billion
Vontier provides mobile technologies for transportation and fleet management solutions. The firm’s systems and software power smart cities, car washes, convenience stores, and EV charging stations. Hedge fund optimism is rooted in Vontier’s position in the evolving mobile market. Its smart cities and transportation systems technology places it in a fortified position to take advantage of future growth driven by urbanization and technological advancements.
Recent stock spin off companies draw significant hedge fund interest due to their strong business models, growth potential, and strategic advantages post-spin-off, making them long-term capital appreciation investment vehicles. A prudent investor would do well to dedicate her due diligence efforts to the analysis of recent spin off companies.
