PayPal is a leader in online payments, with high margins and strong revenue growth. It could prove valuable to tech giants like Google, Apple, Microsoftand Facebook, who are all toying with payments, and its standalone prospects will likely generate significant investor demand. Buying eBay shares ahead of the July 8 record date to receive PayPal shares, may be the cheapest entry point to build a position in the payments firm.
On Baxalta:
Jonathan Morgan of The Edge Consulting Group, a research firm focused on spinoffs and specials situations, told Forbes Baxalta is his top pick among the spinoffs hitting stock markets in July. He compares Baxalta’s margins, pipeline, and leading position in niche markets like hematology and immunology to the position of Humira-maker AbbVie when it was spun from Abbott Laboratories in late 2012, and animal health specialist Zoetis when it was spun from Pfizer in 2013.
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Morgan of The Edge Group also notes that despite a mixed performance of spinoffs during their first year on public markets — some 40% of spins do not generate a return in the first year post separation – healthcare spinoffs have been top performers. Spins in the sector have risen 45% in their first year of trading, while parent companies have risen nearly 20%, according to The Edge Group’s data.
What do you think? Are these two stocks the highlights of the Summer Of Spin?
Disclosure: The author holds no position in any stock mentioned