Legacy conglomerates have traded at discounts for years because complexity hides accountability. Melting ice cube businesses look cheap until the cash flow melts with them. Personally, I think (PYPL) is an example of this. Cyclical stocks with permanent impairment never recover because the cycle does not come back the same way. Price does not create value. Structure does. Listen up.Anchoring worsens it. Investors fixate on their original purchase price and treat it like a reference point. The market does no ...

Core Viewpoint - Honeywell International Inc. (NASDAQ:HON) is highlighted as a significant stock on Jim Cramer's radar, with recent upgrades and discussions surrounding its spinoffs and future potential [1][2][3]. Group 1: Stock Performance and Analyst Ratings - Honeywell's shares have increased by 2.7% over the past year and 11% year-to-date [2]. - JPMorgan upgraded Honeywell's shares to Overweight from Neutral, raising the price target from $218 to $255 [2]. - Mizuho reduced its price target for Honeywell from $250 to $240 while maintaining an Outperform rating [2]. Group 2: Spinoffs and Future Outlook - Honeywell is undergoing spinoffs, including a notable one related to quantum computing, which is generating excitement [3]. - JPMorgan noted that the spinoffs could create an unclear earnings picture for 2026, but this uncertainty may present investment opportunities [2]. - Cramer emphasized the ongoing spinoff process and the market's perception that it is taking longer than expected [3].

Group 1: Maple Leaf Foods and Canada Packers - Maple Leaf Foods retains a 16% stake in Canada Packers and has established an evergreen supply agreement, with Canada Packers serving as an anchor customer for Maple Leaf's prepared meats business [1] - Michael McCain, executive chair of both companies, emphasizes that they will operate as independent entities with distinct investment profiles and experienced teams [2] Group 2: TMX Group and Verity Acquisition - TMX Group has acquired U.S.-based data and analytics provider Verity, although financial terms of the agreement were not disclosed [3] - Verity offers two main products: VerityRMS, a research management system, and VerityData, which provides enhanced data sets focused on public equity filings [3][4] - The acquisition is expected to strengthen TMX Group's ability to serve a growing global client base [4] Group 3: MEG Energy and Cenovus Offer - MEG Energy reports that Glass Lewis has recommended its shareholders support the takeover offer from Cenovus Energy, following a similar recommendation from Institutional Shareholder Services [8][9] - The Cenovus offer requires a two-thirds majority vote from MEG shareholders, with the vote scheduled for October 9 [9] - Strathcona Resources intends to vote against the Cenovus deal, holding a 14.2% interest in MEG [9][10] Group 4: Stella-Jones Acquisition of Brooks Manufacturing - Stella-Jones has signed a deal to acquire Brooks Manufacturing for US$140 million, enhancing its product offerings in treated wood distribution [11][12] - The acquisition aligns with Stella-Jones' strategic focus on meeting the growing demand from utilities and expanding its infrastructure segment [12][13] - Brooks' sales for 2024 are projected to be approximately US$84 million, and the deal is subject to regulatory approval [12][13]

Core Insights - The article emphasizes the investment opportunities presented by spinoffs, highlighting how they can reveal hidden unit economics and lead to multiple expansions once predictable margins and cash generation are visible [1][8][18] Group 1: Spinoff Mechanics - Spinoffs simplify corporate structures, allowing for clearer management priorities and capital allocation, which can enhance investor confidence [2][8] - The market often experiences a coverage vacuum for new public companies, leading to mispricings that can persist for extended periods, creating opportunities for focused research [3][6] - Forced supply volatility occurs when new securities are listed, leading to temporary price imbalances that savvy investors can exploit [4][6] Group 2: Investment Strategy - A disciplined approach to investing in spinoffs involves understanding the mechanics behind them rather than just reacting to price movements [6][18] - A practical screening checklist is recommended to identify potential spinoff investments, focusing on factors like balance sheet health, clear catalysts, and low initial sell-side coverage [11][14] - Risk management is crucial, with suggestions to start small and scale investments based on confirmation of the investment thesis [15][16] Group 3: Case Studies and Performance - Historical performance of spinoffs shows significant potential for returns, with a noted 64% increase in a basket of spinoff stocks since April 2025, demonstrating the effectiveness of disciplined investment strategies [13] - The article outlines the importance of patience and active rebalancing to convert mispriced changes into realized returns [13][17] Group 4: Common Pitfalls - Investors are cautioned against overpaying for spinoff stories without solid cash flow models, as many spinoffs may not perform well in the first year [17] - Understanding insider behaviors, lockup periods, and dilution timelines is essential to avoid common traps in spinoff investments [17]