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Cantor Sees 24 Spinoffs Coming In 2016

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Cantor Sees 24 Spinoffs Coming In 2016
  • Cantor Fitzgerald predicts up to 24 spin-off deals on Wall Street in 2016.
  • The chemical industry is leading the surge with several major deals in the works.
  • In addition, merge-spin deals have been on the rise.

Cantor Fitzgerald analyst Steve Ferazani sees 2016 as the year of the spin-off on Wall Street. In a new report, Ferazani discusses the current spin-off frenzy and Cantor Fitzgerald’s top spin-off stocks to buy.

The Numbers

Cantor Fitzgerald expects as many as 24 spin-offs in 2016, with seven transactions possible by the end of Q1. According to Ferazini, all of this spin-off activity provides opportunity for traders. “We found stocks modestly outperform the broader market in the month before spin-offs are completed,” he explained.

The Year Of The Chemical Spin-Off

While the spin-offs associated with the E I Du Pont De Nemours And Co (NYSE: DD) and Dow Chemical Co (NYSE: DOW) mega-merger are not expected until 2017 at the earliest, there will be plenty of other spin-off activity in the chemical industry in 2016. Cantor Fitzgerald expects spin-offs by W. R. Grace & Co (NYSE: GRA), WestRock Co (NYSE: WRK) and Ashland Inc (NYSE: ASH) by the end of the year.

Related Link: CES 2016 Expected To Be Huge For Drones, Virtual Reality And Wearables

Merge-Spin Mania

The Dow/DuPont deal is also part of the growing merge-spin trend. Gaming and Leisure Properties Inc (NASDAQ: GLPI)/Pinnacle Entertainment, Inc (NASDAQ: PNK) is one such deal on the 2016 slate. Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT) and Marriott International Inc (NASDAQ: MAR) also have a merge-spin deal in place for 2016.

Top Picks

Not all spin-offs create a buying opportunity for shareholders, but Cantor Fitzgerald analyzed all of the potential upcoming deals to pick out the best spin-off stocks to buy now. The firm names Barnes & Noble, Inc. (NYSE: BKS), Gannett Co Inc (NYSE: GCI), KLX Inc (NASDAQ: KLXI), Madison Square Garden Co (NYSE: MSG) and WestRock as its top spin-off stock picks.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for ASH

DateFirmActionFromTo
Aug 2019MaintainsNeutral
Jun 2019DowngradesOverweightNeutral
Jan 2019MaintainsBuyBuy

View More Analyst Ratings for ASH
View the Latest Analyst Ratings

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