There’s no free lunch on Wall Street.
Trust me, I spent most of my life there. In fact, Wall Street won’t even give you ice in the winter.
So, a free lunch?! Fuggetaboutit.
However — there are opportunities that come pretty close. Check this out…
You wake up in the morning and pour yourself a cup of joe.
You get down to the kitchen and are about to read your morning newspaper. And as you take your first sip of coffee, your smartphone dings.
There’s an alert from your brokerage account.
It’s strange … because you didn’t make a trade the day before. So, you open the app.
But you put down your coffee and think there must be a mistake.
In your portfolio, you see a stock you never bought — worth thousands of dollars. Essentially, you’ve received shares of a new company for “free.”
“How the heck did I get these shares?”
Well, this is the almost-free lunch that Wall Street just served you…
Lunch Is Served
It happens when a company “spins off” a segment of its business.
This creates a new and independently traded stock.
And here’s the best part: Current shareholders get those new shares automatically.
In fact, they’re deposited directly into your brokerage account. You don’t need to do anything to get them.
Companies have spinoffs for a whole host of reasons. But the main one is to increase shareholder value.
In other words, they’re trying to make shareholders richer. And anytime that happens is a happy day in my book!
In fact, Deloitte, a leading accounting and consulting firm, did a research paper on this.
Here’s what it found on average one year after spinoffs happened…
Both the parent company and the new company more than DOUBLE the stock market’s return!
Yes, you read that right — double.
Now you know why I said it’s as close to a free lunch as you’ll ever see on Wall Street…
And if you want to know which stocks I look out for potential spinoffs … today’s your lucky day.
I recently did an interview where I was asked what criteria I look for.
I don’t know how long we’re going to keep it up, so you better get a move on it.
Click on the link, and you can thank me later.
Founder, Alpha Investor