Spinoffs From Gabelli, Cohen At Barron’s Midyear Roundtable

Highlighting the Barron’s Roundtable’s spinoff picks is always one of our most popular pieces every year. Sadly, we missed it earlier this year, but Barron’s does publish a midyear check in every July. It’s not as comprehensive as the beginning of the year Roundtable gathering, but it still features some talk about the economy, predictions for the market and of course, individual name recommendations. Very nice of them to offer members a chance to change their minds.

A few recent spinoff names made an appearance and it shouldn’t come as a surprise but most of them came from GAMCO’s Mario Gabelli. After all, Mr. Gabelli’s investment firm pursued its own spinoff in 2015. He had two spinoff picks in this edition:

  1. GCP Applied Technology (GCP) was the first. The company was spun off from WR Grace (GRA) several years ago and makes specialty additives that go into cement. Activist investor Starboard Value recently took over the board and as a result Mr. Gabelli expects the company to be for sale in the next few years. He thinks GCP shares will get back to $30 if the company can earn ~$1 in the next couple of years (it’s about $21.50 right now).
  2. Herc Holdings (HRI), the 2016 equipment rental spinoff from the now bankrupt Hertz Global (HTZ), was his other pick. He expects profit margins to expand and for the business to do well if an infrastructure bill ever passes. It feels like that last line has been tossed around for the past 10 years…maybe it will come true one day. I also wonder if Hertz regrets not having this asset on their books right now!

The other recent spinoff recommendation came courtesy of Goldman Sachs’ Abby Joseph Cohen. She is positive on Ingersoll-Rand’s (IR) 2020 spin Trane Technologies (TT). She expects residential demand to remain resilient in the coming quarters, but is really just bullish on HVAC in general. She thinks that the pandemic has highlighted the need for good indoor air quality and that climate change will lead to increased demand for efficient cooling systems.

Disclosure: Author holds no position in any stock mentioned.

3 thoughts on “Spinoffs From Gabelli, Cohen At Barron’s Midyear Roundtable

Comments are closed.


  • 💬 Inelegant Investor