The Lord Abbett Review

The Lord Abbett Review—Spring 2012

Recent surges in stock market volatility suggest that change is afoot. In this edition of The Lord Abbett Review, we spotlight another shift to keep an eye on: a new cycle of corporate spin-offs reminiscent of the 1980s.

Announcement

05/15/2012

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The number of business spin-offs is expected to jump by 70% in 2012. Does this signal a new era of corporate split-ups? As we note in our cover story, periods of corporate division and consolidation often occur in long cycles. Mergers were the rage in the 1950s and 1960s, as companies began assembling broad portfolios of business units in an attempt to diversify their revenue streams. Spin-offs, on the other hand, predominated in the 1970s and 1980s, as companies increasingly found it necessary to focus on their core businesses. Can investors capitalize on the current uptrend? Do spun-off companies perform better and generate stronger returns than conglomerates? Offering their views are Lord Abbett Partners Rick Ruvkun, Director of Domestic Equity Research; John McMillin, Associate Director of Domestic Equity Research; and Justin Maurer, Portfolio Manager of Smid Cap Value; and Gregory Parker, Research Analyst for Lord Abbett's U.S. Large & Mid Cap Equity Research Team.

Highlights of the issue include:

Investing in Europe: The Good, the Bad, and the Ugly

Clearly, the sovereign debt crisis in Europe has frightened away many investors, but for those with a contrarian bent, it presents an opportunity to scour the markets for value. And, indeed, a close look reveals that the investment possibilities are not uniformly dismal. As we note in "Investing in Europe: The Good, the Bad, and the Ugly," eurozone companies with at least 50% of their business originating outside Europe have performed quite well.

The Shale Revolution

One sector contributing to the U.S. economic recovery and attracting investor attention is energy. In "The Shale Revolution," we examine the boom occurring in oil and gas exploration and its likely spillover effect on the chemicals industry. As an essential component of this industry, natural gas obtained cheaply could turn the United States into the world's low-cost chemicals producer.

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Contact Information

For Media Inquiries

Jim Sansevero
201-827-2774
jsansevero@lordabbett.com

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