Opinions
John Burke
DowDuPont Inc.
DWDP-N
WAIT
Oct 26, 2017
$73.050
Stock price when the opinion was issued
chemicals
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COMMENT
Spin offs? The agra-chemicals business that will be spun off is not a holding he would buy into. There is uncertainty over genetic modification in the agricultural space, but he bought this in the past for the chemical side of the business. Dupont will target the chemical side and is expected to pay a 5% dividend yield.
chemicals
HOLD
It split into three shares. DWDP-N was a holding company and he would continue to hold it. The AG company would be more challenged.
chemicals
DON'T BUY
When they split up the company, they bundled parts of the company he likes with parts he doesn't. Specifically, he doesn't want to be involved in the agricultural parts. The plastics part claims to be capturing content in automotive--but cars are a shrinking industry. If there are further splits, he'll take another look.
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This is now run by the same guy that was a CEO in the breakup of Tyco. He did a great job, so expectations are high. Studies show that companies that are spun off, typically do well. He would wait, because these companies are going to spend money, so the upfront pain is going to be in the first half of the year, and numbers are not going to look that good. Sometime, during that first year, he is going to look to Buy some of this.