In a new report, Cantor Fitzgerald analyst Steve Ferazani took a close look at spinoffs and ran through the numbers on their historical performance. Ferazani found that spinoffs typically outperform the market by a wide margin in their first year of trading.

What’s Going On?

According to the report, spinoffs completed between 2009 and 2013 outperformed the S&P 500 in their first year of trading by an average of more than 17 percent. Ferazani identified several factors that seem to be contributing to this outperformance.

“These factors include spin-off exclusion from the S&P 500, the ability and willingness of the spin-off company’s board and management to repurchase shares, and users of the cash contribution from the spin-off to the parent,” he explained.

Buying The Dip

For investors looking for the best possible time to buy spinoffs, look…

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