5 Recent Spin-off Companies That Hedge Funds Are Piling Into

In this article, we discuss 5 recent spin-off companies that hedge funds are piling into. If you want to see more stocks in this selection, check out 10 Recent Spin-off Companies That Hedge Funds Are Piling Into. 

5. ESAB Corporation (NYSE:ESAB)

Number of Hedge Fund Holders: 24

ESAB Corporation (NYSE:ESAB) is a Maryland-based company that specializes in producing and providing consumables and equipment for cutting, joining, and automated welding, as well as gas control equipment. On April 5, Enovis Corporation (NYSE:ENOV), a medical tech company driven by innovation, announced the finalization of its previously announced spinoff of its fabrication technology segment into a standalone, publicly traded firm, ESAB Corporation (NYSE:ESAB).

On January 12, ESAB Corporation (NYSE:ESAB) was named as one of the top stock picks in the machinery industry by analysts at JPMorgan. The investment firm noted that ESAB Corporation (NYSE:ESAB) is trading at a discount to its bigger counterpart, Lincoln Electric Holdings, Inc. (NASDAQ:LECO). 

According to Insider Monkey’s data, ESAB Corporation (NYSE:ESAB) is one of the best spin-off stocks, given that hedge funds are piling into the company. At the end of Q3 2022, 24 hedge funds were bullish on ESAB Corporation (NYSE:ESAB), up from 19 in the prior quarter. 

Diamond Hill Capital made the following comment about ESAB Corporation (NYSE:ESAB) in its Q4 2022 investor letter:

“Other top contributors included Enstar, ESAB Corporation (NYSE:ESAB) and Taseko Mines. Shares of runoff consolidator Enstar bounced back from a tough Q3. Enstar buys other companies’ non-core business lines and efficiently settles claims until the liabilities are exhausted. It has a proven ability to compound value over time and create value across cycles, and we believe it can continue to do so. Similarly, shares of fabrication technology company ESAB rebounded from a challenging Q3 as the business has fared better than feared amid a slowing macroeconomic environment — especially in Europe, where ESAB is the leader in welding.”