This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

An Intelligent Investor's Response to Government Gridlock

Stocks in this article: NOV IEP

On Oct. 1 I watched NOV carefully with the hope of buying low. It opened at $77.34 (while I was snoozing here on the West Coast) and by the time I woke up it popped above $78.

That doesn't bother me because as the following one-year price chart demonstrates, NOV has had quite a run since late April. The trailing 12-month (TTM) Ebitda line suggests earnings should be robust when NOV next reports on Oct. 25. Still, I'm willing to wait for a better entry price.

NOV Chart NOV data by YCharts

In late September NOV announced it plans to spin off its distribution division into a separately traded public company sometime in 2014. The spinoff could be an upside primer for the stock price.

Historically, we've learned that spinoffs have a tendency to generate higher total value for shareholders. Within a year or less the original NOV and its spinoff are likely to have a higher combined value than NOV's current price.

Jim Cramer and Stephanie Link of Action Alerts PLUS wrote about the spinoff, "... W e like the recent management decision to spin off 85% of its distribution segment, which we believe creates $7 to $9 per share in upside. Also, we like the $3 billion in acquisitions the company has made, which will lead to strong synergies (we estimate $0.20 accretion in first year) and margin support."

Another way investors can be smart and benefit from the current-events-driven market pullback is to invest like a billionaire activist. Take Carl Icahn, please!

Do you know which publicly traded company is this billionaire's biggest single position? You're correct if you said Icahn Enterprises (IEP - Get Report).

Most of us know that the first place we should invest is in ourselves, so it's no wonder Icahn, in his latest 13-F, disclosed that over 33% of his personal portfolio is in shares of his own company, IEP.

The company, which is structured as a Limited Partnership, engages in the investment, automotive, gaming, railcar, food packaging, metals, real estate, and home fashion businesses in the United States and internationally.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs