Morgan Stanley says stock spinoffs trounce the market, and here are some upcoming opportunities

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Morgan Stanley says stock spinoffs trounce the market, and here are some upcoming opportunities
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'Spin-offs present investors with a unique opportunity to capitalize on unlocked and potentially underappreciated value,' Morgan Stanley said.

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Companies spin off business units in a bid to boost margins and increase shareholder value, and investors should take advantage of the those that have been spun out — as they typically beat the market in the long run, according to Morgan Stanley. "Spin-offs present investors with a unique opportunity to capitalize on unlocked and potentially underappreciated value," Morgan Stanley strategists said in a note.

Spin-Off Index, which consists of companies with market caps above $1 billion market cap spun off from a parent company in the last four years, has handily outperformed the S & P 500 since its creation in 2006. The spinoff index posted a 9.1% total return, compared to the S & P 500's 6.7 return during the same period.

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