This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stockpickr: You Can Beat the 'Spinoff' ETF

Editor's Note: Stockpickr is a new joint venture with TheStreet.com that lets you see the stocks that hedge funds, mutual funds and other investors are holding, and every day James Altucher goes through various portfolios that he believes can be of value to investors. To make use of the full features of Stockpickr, please check out our introductory article, which describes all of the site's features.

I think I'm in love.

If I were 30 years old again, I might ask the Claymore/Clear Spinoff (CSD) ETF to marry me.

Exchange-traded funds are no longer the run-of-the-mill, let's-buy-every-stock variety like the Spyder Trust (SPY) (the S&P 500 ETF) or the Nasdaq 100 Trust (QQQQ) (the Nasdaq 100 ETF). The latest exchange-traded funds to be released to the public have upped the ante a notch and are now playing for bigger stakes. They want to enter the arena of discretionary allocations that big pension funds give to mutual funds and hedge funds. They want to be players.

However, I believe we can examine these ETFs and pick and choose from their holdings the stocks we like best. One way to do that is to look at the hedge funds, mutual funds and other investors who are accumulating each stock in the ETF.

One recent entrant into the ETF race that has been the source of my "stock idea lust" is the Claymore/Clear Spinoff ETF. Spinoffs are companies that are subsidiaries or used to be subsidiaries of other public companies. They get spun out to the public through an initial public offering, and oftentimes there is artificial selling pressure.

This was famously pointed out in super-investor Joel Greenblatt's book You Can Be a Stock Market Genius. He stated that selling pressure could arise because people who wanted to hold the parent company (for instance, an ETF that follows an index) might not be allowed to hold the spinoff stock (because the spinoff is not part of the index the ETF is following), so they are forced to sell off the shares. (As an aside, here's a look at Joel Greenblatt's top holdings, which I plan to discuss at some point in the future.)

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CSD $48.33 0.00%
EXPE $113.00 0.00%
IACI $75.92 0.00%
SPY $212.99 0.00%
AAPL $132.54 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs