Stable Core Business, Loss Making Growth Business

[whistlerbumps]

Hi Guys,

Anyone have any stocks that fit the following criteria:

 

1) Stable cash generating core biz

2) New loss making business/geography/technology that is masking core business profitability

 

Recent example would be Gaiam where investments in the VOD biz were hiding the core yoga profitability.

Best,

WB

[KJP]

A few that may interest you:

 

IDW Media Holdings: investments being made in IDW Entertainment segment

Rentech:  investments being made in a very troubled industrial wood pellet business

IDT:  Serial incubator of new businesses with core, cash-generating communications business

[NewbieD]

TOBII , short thread on here, fits the bill.

 

Stable core is eye-tracking assistance to disabled people and researchers.

Growth is implementing the same in consumer electronics and cars.

 

Curious why you're searching actively for this split? Do you think it tends to lead to undervaluation?

[rawraw]

TOBII , short thread on here, fits the bill.

 

Stable core is eye-tracking assistance to disabled people and researchers.

Growth is implementing the same in consumer electronics and cars.

 

Curious why you're searching actively for this split? Do you think it tends to lead to undervaluation?

A buyside guy once told me these sort of companies don't screen well, so they can sometimes get missed by all the quants/algos/screens/etc, increasing the odds you find one that hasn't gotten the attention it deserves

[Homestead31]

Iteris (ITI)

[Guest Schwab711]

Loss-making:

KLXI

 

 

Stable/growth:

WBS

BLK

[TedKord]

I don't know if this is what you're looking for but Community Health Systems (CYH) in May spun off Quorum Health (QHC). The idea behind the spin off was that QHC had 38 crappy, no growth hospitals in rural areas and CYH was left with higher-margin, higher-growth urban hospitals. Both stocks have subsequently been crushed for reasons, not necessarily related to the spin-off, though I think much of QHC's problems come from this. CYH's mkt cap was 3bn at YE 2015 and today it's only 1.2bn and QHC's mkt cap is 182m.

 

In full disclosure, I don't own either CYH or QHC, but I'm looking. I think there's a lot going on that may be hiding CYH's value. That said,  I could have said the same thing two months ago and would be 20% poorer.