The most recent post  is on Vishay Precision Group, VPG.  They gave it an overall B+, but more importantly they spelled out their reasons commenting on four areas–

1. Do institutions want to own the spin-off?
2. Do insiders want to own the spin-off?
3. Does management have incentives to make the spin-off succeed?
4. Does the spin-off transaction expose a “special opportunity”?

I don’t know how often they will be coming out with posts on spin-off stocks, but this is definitely a resource to be included in your tools.

When Joel Greenblatt noted that often the best information on a spin-off could be found in your local newspaper he wasn’t thinking about the effect of the internet, but the basic principle remains.

Though the first announcement and the conclusion will be found in the national news, it is on the local scene where people are directly affected by the jobs, the investments, and the personalities that the spin-off is more likely to stay news along the way.

Fortunately, it is easier than ever to get this point of view, even if you have no idea where Malvern is and aren’t even sure how to spell it.

As for me, I am still trying to figure out whether I want to be a silent partner of the Zandmans or not.

And, when it comes to coke, it has interested me ever since I learned that you don’t drink it from my best friend’s grandfather who still had scars on his face 40 years after he quit tending a coke oven.  But, is coke a good thing to be making and selling now?  We’ve got to figure that out before Sunoco sets Suncoke free.

As ever, we have plenty of time.  In fact, one of the hardest things about spin-off stock investing for me is to not have dozed off and missed the entry when everything finally lines up.  Maybe it’s a new model — stock spin-off investing as ADD therapy!?  No?  I guess not.

It will -

• result in the complete separation of the two companies
• be accomplished through a pro rata dividend of the outstanding shares of VPG owned by Vishay
• have a target date of July 6, 2010, if all requirements are met in time
• provide 1 share of VPG for each 14 shares of VSH held
• have a holder of record date of 5:00 pm, June 25, 2010
• start trading of VPG WI (when issued) June 23, 2010.

The company’s press release described the two components of the spinoff as follows:

“About Vishay Precision Group

Vishay Precision Group is a leading designer, manufacturer and marketer of Foil Technology Products (strain gages, ultra-precision foil resistors, and current sensors) and Weighing Modules and Control Systems (transducers/load cells, instruments, weigh modules, and control systems) for a wide variety of applications.”

“About Vishay Intertechnology

Vishay Intertechnology, Inc., a Fortune 1,000 Company listed on the NYSE (VSH), is one of the world’s largest manufacturers of discrete semiconductors (diodes, rectifiers, transistors, and optoelectronics and selected ICs) and passive electronic components (resistors, capacitors, inductors, sensors, and transducers). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, and medical markets. Its product innovations, successful acquisition strategy, and ability to provide “one-stop shop” service have made Vishay a global industry leader. Vishay can be found on the Internet at http://www.vishay.com.”

There are still plenty of questions about whether this will be a good deal for investors or not.  At this point all I know is that it is a complete spin off, the two parts do seem to do different things, and the price/volume action after the stock spin-off will be there for everyone to see.  Right now my bias is positive, but I am going to be waiting for confirmation of that belief, both fundamental and technical.

People, with more knowledge of the industry and the company than I,  have voiced concerns that I take seriously.  I just don’t know what to do with the information other than to stay cautiously optimistic and be very alert for the issues in question affecting the deal and the companies’ performance going forward.

It looks to me like he’s done a heck of a job with the VSH – VPG reading.  I hope he does more.

I still don’t know how to figure the Zandman component of this whole deal.  Take a look at the comments on the previous post about this one.   Unless I am reading things wrong, these companies belong to the Zandmans and the rest of us have to decide whether to attach ourselves to their coat tails or not.  Does anyone have anything to add, either about that view or about the people involved?

Spinoffs are good place to look for watchlist candidates in general, but they are even better when the companies involved are healthy and growing, which appears to be the case with Vishay.  While their reported 1st quarter earnings were positive, they missed estimates on revenue and the stock’s price is off in early going today.  Still, the book-to-bill ratio was reported to be very strong and that coupled with increased manufacturing capacity bodes well for the future.

The stock spin-off provides a reason to look more closely at the parent company and the spin-off.  Perhaps one or both will be put on your watchlist.  Eventual entry depends on confirmation of some sort that fits your trading system, be it fundamental or technical.  In this case, I have adequate reasons for both the parent and the spin-off to go onto my watchlist.  What happens from there, time will tell.

Vishay Intertechnology describes itself as a Fortune 1,000 Company listed on the NYSE (VSH), is one of the world’s largest manufacturers of discrete semiconductors (diodes, rectifiers, transistors, and optoelectronics and selected ICs) and passive electronic components (resistors, capacitors, inductors, sensors, and transducers). These components are used in virtually all types of electronic devices and equipment, in the industrial, computing, automotive, consumer, telecommunications, military, aerospace, and medical markets. Its product innovations, successful acquisition strategy, and ability to provide “one-stop shop” service have made Vishay a global industry leader.

The Vishay Precision Group describes its focus as being the design, manufacturing, installation, and maintenance of precision measuring devices.  With the Precision Group on its own, Vishay Intertechnology will be left as what they describe as “a pure-play discrete electronic components business comprised of semiconductors and passive components.”

I don’t understand either of these businesses.  From my limited experience with spin-offs, this is not always a bad thing . . . up to a point.  The “story” of a company can be very seductive making it almost impossible sometimes to believe that it is not prospering or that its stock price is not going up.

Of course, some stories are so bad that spin-off or not they appear to simply be toxic situations.  A quick perusal of analyst opinions on VSH suggest that this is not the case here.

As ever, we will read the SEC filings and watch the price and volume of the parent and the spin-off stock to decide if and when to enter this trade.