Tyco International, (TYC), announced in late April of this year that it would do a stock spin-off of its electrical & metal products business in 2011,  and we haven’t heard much if anything about it since.  Apparently, the number of pieces that have to come into place for a spin-off stock to actually come into existence is mind boggling.  It takes a lot of work, a lot of time, and there really isn’t anything for the company to say until they get it all in order to the satisfaction of the SEC.

This points up one of the difficult parts of stock spin-off investing, at least for those of us with ADD, and that is the grand pace at which these things proceed.  The themes of greed and fear have been beaten into the ground by anyone with anything to say about investing, but impatience and loss of focus really ought to be right in there with the big two.

You have to remember what you are watching and you have not resist the urge to try to “push the river”.  Each kind of trading has its own pace and flowing with that makes the different between success and failure in any particular style. When it comes to spin-off investing it sounds simple, and, I guess it is for those of you with the right temperament.  For the rest of us, watch lists and calendar alarms and taking a deep breath and waiting for the trade to come to us are vital.

So, keep your eye on Tyco’s upcoming spin-off.  We won’t be able to assess its potential until they give us some data on what they are going to do.  If that looks good, then we can wait to get confirmation from price and volume.

Tyco Describes Itself As: ” a diversified, global company that provides vital products and services to customers in more than 60 countries. With more than 100,000 employees worldwide, Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products.”

Tags: impatience, spin-off stock, stock spin-off, TYC, tyco International

Tyco International Ltd, TYC, has announced the upcoming stock spinoff of its  electrical and metals unit.  The company says that the spinoff will help the parent focus on security, fire systems, and flow control, while the new entity will be better able to do the same with what it does which is making galvanized tubing, electrical conduit, and framing systems.

Enhancing the ability of management to focus their attention is a standard reason for a spin-off and this one looks like it will do that.  Sometimes when companies are taking things apart I find myself wondering what they were thinking when they were putting the pieces together.

One of the reasons cited for this being good for Tyco is less earnings volatility from not being exposed to construction cycles.

From the perspective of being an investor in the spin-off stock this exposure may not be so positive or at least call for an awareness of the cyclical nature of the demand for tubing, conduit, and framing systems.

This seems to be a good example of why the question “are stock spin-offs good?” can’t really be answered beyond saying that they tend to be.  It all depends.   Men tend to be taller than women, but when you stand one woman next to one man there is no certainty that the man will be taller.

Tags: spin-off stock, stock spin-off, TYC, tyco International