MetLife Spinoff

[jazz4cash]

MET has setup Brighthouse Financial as a separate unit for its retail life insurance business. Now they have filed to make it a separate public company to be 80% owned by current shareholders. This was somewhat driven by their desire to shed SIFI designation but now it seems like they are isolating an underperforming sector and sticking it to existing shareholders. I guess I don't have the skill to evaluate this and that's why I should stick to funds. I have a pretty nice ST again in MET as things stand now.
I'm having a very bad experience with RR Donnelly right now that just did something similar.

Any thoughts?


Sent from my iPhone using Early Retirement Forum

[MooreBonds]

Quote:

Originally Posted by jazz4cash MET has setup Brighthouse Financial as a separate unit for its retail life insurance business. Now they have filed to make it a separate public company to be 80% owned by current shareholders. This was somewhat driven by their desire to shed SIFI designation but now it seems like they are isolating an underperforming sector and sticking it to existing shareholders. I guess I don't have the skill to evaluate this and that's why I should stick to funds. I have a pretty nice ST again in MET as things stand now. I'm having a very bad experience with RR Donnelly right now that just did something similar. Any thoughts?

I know there are some examples of those stocks that are stellar performers after being spun-off (like Chipotle). But, like you, my experience with Rayonier Timberlands was poor. The one hope I had was that the CEO was actually leaving Rayonier to join the spinoff (RYAM), their materials division. But it has been an abysmal performer. I had a small neutral spinoff from APD recently, but just went through and cleaned house a bit in my portfolio by selling off the piddly positions that were mostly giant losses that had "more than temporary" declines in value. Or the memories of watching Venture stores being spun off from Lord and Taylor (or was it May Stores?), which my grandfather had way back in the 90s. It was given a nearly impossible-to-survive debt load, while leaving the parent company in a bit better shape.

If I were in your shoes, I'd just take the gains, and sell it. I don't see anything particularly glorious about this new spunoff division, as you note.

[Mulligan]

Quote:

Originally Posted by MooreBonds I know there are some examples of those stocks that are stellar performers after being spun-off (like Chipotle). But, like you, my experience with Rayonier Timberlands was poor. The one hope I had was that the CEO was actually leaving Rayonier to join the spinoff (RYAM), their materials division. But it has been an abysmal performer. I had a small neutral spinoff from APD recently, but just went through and cleaned house a bit in my portfolio by selling off the piddly positions that were mostly giant losses that had "more than temporary" declines in value. Or the memories of watching Venture stores being spun off from Lord and Taylor (or was it May Stores?), which my grandfather had way back in the 90s. It was given a nearly impossible-to-survive debt load, while leaving the parent company in a bit better shape. If I were in your shoes, I'd just take the gains, and sell it. I don't see anything particularly glorious about this new spunoff division, as you note.

Venture? I still have some Venture store brand band aides in my bathroom cabinet. I guess I dont cut myself much anymore since the box is still about full.

[Montecfo]

Quote:

Originally Posted by jazz4cash MET has setup Brighthouse Financial as a separate unit for its retail life insurance business. Now they have filed to make it a separate public company to be 80% owned by current shareholders. This was somewhat driven by their desire to shed SIFI designation but now it seems like they are isolating an underperforming sector and sticking it to existing shareholders. I guess I don't have the skill to evaluate this and that's why I should stick to funds. I have a pretty nice ST again in MET as things stand now. I'm having a very bad experience with RR Donnelly right now that just did something similar. Any thoughts? Sent from my iPhone using Early Retirement Forum

Spinoffs usually trade down for a time as people unload the spinoff shares. I would not rush to do so.

[haha]

Quote:

Originally Posted by MooreBonds But, like you, my experience with Rayonier Timberlands was poor. The one hope I had was that the CEO was actually leaving Rayonier to join the spinoff (RYAM), their materials division. But it has been an abysmal performer.

I followed this one too. I think the main issue is that a boyscout was brought in as CEO of RYN (the timber company), and the guy who went with the specialty fluff manufacturing business(RYAM) was the guy who was behind the over- harvesting of NW timber-lands under his leadership. Also, I am not sure that a specialty pulp mainly used in cigarette filters is necessarily a red hot business. I owned boyscout's previous firm under his stewardship for 10 years and feel that he (Nunes) is an extremely competent CEO and also a completely honest one.

Ha