Terry,
Here are my various thoughts...
I bought into Rockwell a little while ago. I'm hoping both the spin-off and the parent will do well going forward. I said previously that my buying price was below $38, I'd probably raise that to about $44.
Varian is also interesting valuation wise but I haven't bought.
Convergys looks interesting growth-wise, but it is relatively expensive right now. I'll wait to see if we get a spin-off effect.
I bought into Olin a little while ago based on free cash flow, improving financial condition, dividend, and the prospect of the spin-off. Some of the core businesses are still in relatively depressed markets but the earnings potential of the company in the right environment would be quite high.
IMS Health is a great niche company, great growth potential, but it is too high priced for me.
I played some arbitrage on the FHT/MTRS spin-off and made some money. Shorting MTRS, long FHT. I closed that one out with a nice gain.
I've own Agouron for a long time. The tracking stock should make the profitability of the parent division more apparent. I haven't formed an opinion on tracking stocks themselves yet.
I have not looked into the Telebras spin-offs, and probably should look at a couple.
Some of the smaller spin-offs this year still look interesting: all the OFIS spin-offs (AZTC, FLYR, SCHS, WORK), PENX, FHT.
None of the internet plays appeal to me - too scared of being the last one holding the empty bag.
Pulitzer looks interesting because the spin-off will get lots of cash as part of the merger agreement. I'll look to that one after the merger is finalized.
Pennzoil and Quaker State - I have played this one on and off by shorting KSF and being long Pennzoil and sometimes buying back KSF. After looking at some E&P guys with oil at $11 to $14, the profit outlook looks pretty bleak near term. I'll take a closer look after the spin-off. Prices below $20 for the E&P company look very interesting. With oil around $14, I thought a reasonable valuation
for PZL, pre-spinoff, was about $42.
Jefferies still trades at a depressed valuation after subtracting its ownership of ITGI. About $7 after subtracting ITGI. ITGI is probably impossible to short now (too few shares in the float).
I've watched Hoechst for quite some time - it's among the cheapest of the big drug stocks. It seems like every big chemical company is trying to change into a "life sciences" business. I'll be looking at the spin-off and the subsequently announced merge with Rhone Poulenc carefully.
Regards,
Stew
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