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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Harshu Vyas who wrote (73864)	10/5/2023 7:56:51 AM
From: E_K_S	Read Replies (1) \| Respond to of 78666

Re: K & KLG - it's all in the details look at the debt! Just from a brief observation KLG opened up at $13/share on the spin off date; K sold down to $52.5 around a 13% discount. KLG traded down almost 30% from it's open at $13.78 to settle at $10.8. K is being priced as the growth component but will it get significant PR expansion from it's pre-split PE of 12.5x? To me KLG selling at a greater discount but revenues & margins are still unknown. I will do small adds to both but w/ focus on KLG as I think this may/could sell off even more. Just small buys until they both settle. The real information will come in the next few quarters. I suspect earnings for the next quarter are somewhat already fixed. Will be looking at how much debt KLG was forced to take. That may be the kicker to future growth of K (especially if they were able to off load a good chunk of debt).

To: Harshu Vyas who wrote (73864)	10/5/2023 8:41:22 AM
From: Sean Collett	1 Recommendation Recommended By E_K_S Read Replies (2) \| Respond to of 78666

I agree with E_K_S that there is money in these spin-offs. I think this plus the Intel one I shared the other day have some decent potential. And like you Harshu, it had also made me think of Mr. Greenblatt and his book. For anyone interested, here is a paper written a few years ago (2015) from Purdue University that gives some research into these types spin-off trades. Link to the paper. And here's just a snip of the conclusion the paper got to, but I recommend reading the whole thing: -Sean