Comments on: Mead Johnson Nutritionals Spinoff IPO

By: Jae Jun

Jae Jun — Thu, 21 May 2009 04:24:07 +0000

@Jim,
Darn.. Jim I accidently lost your comment again. Sorry. I’m having bad days lately.

My friend bought Greenwald’s book and I’ll be borrowing it off him. Im keen to get EPV under my belt as well as other techniques to figure out how to value companies such as MJN that are recent spinoffs with no real public competitor.

By: Jim

Jim — Wed, 20 May 2009 02:11:30 +0000

@Jae, I don’t know for certain how to approach ABT other than book value minus all intangibles or the EPV valuation that is used by Bruce Greenwald that uses FCF but doesn’t project its numbers out for a period of time.

Jim’s last blog post..Axcelis Technology, Inc. Continuation…

By: Jae Jun

Jae Jun — Tue, 19 May 2009 22:21:11 +0000

Trying to figure out how to put a value on MJN. There doesn’t seem to be a public competitor except ABT, but pediatric nutrition is only one division making it hard to calculate and organise numbers.

Their history is too short to come up with a reliable forward looking estimate.

So the multiple method, DCF and Graham methods are all out. What other way is there?

Anyone know?

By: PlanMaestro

PlanMaestro — Wed, 11 Feb 2009 00:07:31 +0000

I would say this lloks more like an IPO than a Spinoff. There is no distribution of shares so most of the reasons described in “You can be a stock market genius” do not apply.

The greatest beneficiary will probably be the parent.

By: Jae Jun

Jae Jun — Tue, 10 Feb 2009 19:46:03 +0000

I think BMY may also be worth looking at. Since a spinoff is always a result of trying to let the public see under appreciated value, BMY valuation may improve. They still own a majority stake in MJN and with a yield of over 5%, it is a worthy consideration.

By: Andrei

Andrei — Tue, 10 Feb 2009 19:35:24 +0000

Hi Jae,

As i’ve discussed with you, I think MJN is in a great line of business. The fact that it is a spin-off makes it all the more intriguing because of how spin-offs typically outperform in the first couple of years. However, more than a spin-off, I view MJN as a long-term holding.

Now if only I could get in at the IPO price . I’ll have to see how it trades tomorrow and try to get in at a reasonable price.