A spin-off or divestment is when a parent company divests part of its business to form a new company listed on the exchange. Spin-offs are usually worth looking at due to the fact that parent companies want them to do well otherwise it would bring adverse publicity back on the company, so they usually have spun off the company with a strong balance sheet and management in the new company are free to run it as they see fit.

 

Look for insider buys in the first six months to see if directors think the prospects for the company are good.

 

Click on the stock symbol for more information.

 

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