In this article, we will look at the 15 Successful Spin-Off Companies and Their 2025 Returns.
Don’t chase the markets; instead, wait for things to cool off. That’s the sentiment echoed across Wall Street, with markets at record highs. The remarks come as growth stocks have emerged as the bright spots depicted by the 7.57% gain of the S&P 500 Growth ETF. In contrast, the S&P 500 Value ETF has only gained 4.21%. Amid the gains, Carolyn McClanahan, founder of Life Planning Partners, believes it is time for investors to become increasingly cautious.
“Sometimes things are going to cool off and you are going to regret trying to chase the market and making decisions based on current market behavior,” she said. “The smart thing is to have an asset allocation already determined in advance — and that should be based not on what the market is doing but on what your goals and needs are.”
Amid heightened volatility, diversification and an increased focus on income-focused plays should be every investor’s strategy, according to Adam Reinart, chief investment officer at Marshall Financial. On the other hand, Marguerita Cheng, CEO of Blue Ocean Global Wealth, a certified financial planner, cautions against focusing solely on income.
“Including dividend payers in your portfolio can level out the volatility, but I want people to think about total return investing — which means that you have growth and value in there — and that provides you a little bit more flexibility,”
With that in mind, let’s look at the 15 Successful Spin-off Companies and Their 2025 Returns.
An experienced financial analyst working intently at their desk in a modern office setting.
Our Methodology
To compile the list of the 15 Successful Spin-off Companies and Their 2025 Returns, we scanned the US equity markets, focusing on companies that were spun off in recent years and that are popular among elite hedge funds. We analyzed why these companies stand out and provided their year-to-date returns. Finally, we ranked the stocks in ascending order based on the number of hedge funds that hold stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15 Successful Spin-off Companies and Their 2025 Returns
15. Cerence Inc. (NASDAQ:CRNC)
Year to Date Return as of July 7: 63.60%
Number of Hedge Fund Holders: 18
Year of Spin-off: 2019
Cerence Inc. (NASDAQ:CRNC) is one of the 15 successful spin-off companies. On July 1, the company announced a strategic partnership with Mahindra. The partnership paves the way for the integration of the company’s Audio AI technology into Mahindra’s new electric SUV’s.
Cerence Speech Signal Enhancement (SSE) enhances in-car voice interactions by leveraging artificial intelligence-based speech enhancement and advanced acoustic processing. The technology is especially suited for India’s noisy road conditions as it ensures clean communication between vehicle occupants.
The strategic partnership presents a significant opportunity for Cerence to demonstrate the adaptability of its technology in challenging environments. Additionally, it will enhance the company’s footprint in emerging markets.
“Cerence Speech Signal Enhancement is the foundation of meaningful interaction in the car, decreasing noise and therefore increasing the assistant’s ability to understand the user,” said Nils Schanz, EVP, Product & Technology, and Cerence AI. “Accuracy of interactions and the assistant’s ability to understand what is being asked are critical to driving long-term usage and adoption of in-car assistants, and we are proud to partner with Mahindra to help create this with their drivers and passengers.”
Cerence Inc. (NASDAQ:CRNC), spun off from Nuance, is a technology company that develops AI-powered interaction solutions for use across transportation networks. It works with the world’s leading automakers and mobility OEMs to drive innovation in the car, two-wheeler, and truck user experience.
14. Sunrise Communications AG (NASDAQ:SNRE)
Year to Date Return as of July 7: 29.84%
Number of Hedge Fund Holders: 20
Year of Spin-off: 2024
Sunrise Communications AG (NASDAQ:SNRE) is one of the 15 successful spin-off companies. Berenberg initiated coverage on SNRE with a Hold rating and a CHF49.00 price target on June 26, suggesting around 10% upside.
The valuation was derived using a discounted cash flow (DCF) model, reflecting cautious optimism in the stock’s potential. The firm cited ongoing pressure on Swiss telecom service revenues, driven by price-sensitive consumers and intensifying competition from low-cost sub-brands and MVNOs. While maintaining a neutral view, Berenberg signaled it could take a more bullish stance if signs of sustained service revenue growth re-emerge in the Swiss market.
Sunrise Communications AG (NASDAQ:SNRE) was spun off from Liberty Global late last year. The telecommunication company provides high-quality mobile, landline, broadband, and TV services to residential customers. It also offers business customers 360° communications solutions and integrated ICT solutions for connectivity, security, and IoT.
13. Adeia Inc. (NASDAQ:ADEA)
Year to Date Return as of July 7: 6.63%
Number of Hedge Fund Holders: 21
Year of Spin-off: 2022
Adeia Inc. (NASDAQ:ADEA) is one of the 15 successful spin-off companies. On June 20, Roth/MKM initiated coverage of the stock with a ‘Buy’ rating and a $26 price target. The bullish stance underscores the research firm’s confidence in the company’s intellectual property portfolio and growth prospects.
Roth/MKM has reiterated that Adeia is a leading developer and licensor of intellectual property for the media and semiconductor market. It has echoed its business model, which generates over 85% of its sales in recurring revenue.
The research firm expects the company to generate significant sales as over-the-top media services and next-generation semiconductor hybrid bonding solutions become widely licensed. It also expects company growth to be driven by the penetration of next-generation artificial intelligence in 2026 and beyond.
Adeia Inc. (NASDAQ:ADEA) was formerly part of Xperi Holding. It came into being following the spin-off of the IP licensing business. It specializes in the development and licensing of foundational innovations, particularly in the media, entertainment, and semiconductor industries.
Hedge Fund Resource Center