Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

Plus, did you miss out on Ring and Nest? Don’t let this one slip away.

YESTERDAY’S POLL RESULTS

Are you bullish or bearish on Cameco (CCJ) over the next 12 months?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish

MARKET MOVERS

EQIX (+12%) Data center owner Equinix saw its biggest gain since 2008 as a “rapidly evolving AI landscape” continues to push earnings higher (Barron’s)

CAKE (+6%) Cheesecake Factory reported earnings per share of 73 cents, beating analyst estimates for EPS of 63 cents (BI)

FWRD (-22%) Freight and logistics company Forward Air reported a loss per share of $0.64, much higher than the $0.15 loss that analysts estimated (SA)

WRBY (+18%) Eyewear maker Warby Parker saw its biggest one-day gain in two years after raising its full-year revenue guidance to offset a first-quarter loss (MW)

ABNB (-7%) Airbnb beat earnings estimates on the top and bottom lines for the first quarter but offered weaker-than-expected guidance (CNBC)

TOGETHER WITH RYSE

Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

If you missed out on these spectacular early investments in the Smart Home space, here’s your chance to grab hold of the next one.

RYSE is a tech firm poised to dominate the Smart Shades market (growing at an astonishing 55% annually), and their public offering of shares priced at just $1.50 has opened. 

They have generated over 20X growth in share price for early shareholders, with significant upside remaining as they just launched in over 100 Best Buy stores.

Retail distribution was the main driver behind the acquisitions of both Ring and Nest, and their exclusive deal with Best Buy puts them in pole position to dominate this burgeoning industry.

Secure your stake before the offer closes.

OVERHEARD ON THE STREET

CNBC: Activist Ancora won three board seats at Norfolk Southern but fell short of ousting the incumbent CEO, Alan Shaw.

YF: Dine Brands, the parent company of Applebee’s and IHOP, has seen a decline in consumers who earn $50,000 or less annually, largely due to inflation.

NYT: AstraZeneca is withdrawing its Covid vaccine worldwide, citing low demand. The shot is no longer manufactured or supplied.

Reuters: The Bank of England took another step towards lowering interest rates— a second official backed a cut since things are “moving in the right direction.”

CNBC: Weekly jobless claims jumped to 231,000 for the week ending on May 4th, the highest claims numbers since late August of 2023.

TOMORROW’S TRADE IDEA, TODAY

Outperforming the Market

2024 has been a good year for the market thus far. Interestingly enough, spinoff stocks created from larger parent companies have been among the best performing this year.  

15 companies have completed spinoffs this year, with 19 others set to occur throughout the rest of the year, according to data from Morgan Stanley (MS). 

According to the bank, spinoffs have outperformed the broader market by over 2% two years following the split, while their parent companies have lagged by over 8%.

Zooming In

According to Morgan Stanley’s Todd Castagno, spinoffs give investors the chance to take advantage of value that might be overlooked. 

Historically, companies that spin off into a different sector have outperformed because of this concept of being undervalued. 

At the same time, a low price might not indicate a good buying opportunity. According to Wolfe Research, spinoffs with high valuations have typically performed better, signaling a high-quality stock.

This Year’s Winners…so Far

GE’s (GE) energy spinoff, GE Vernova (GEV), has been one of the most significant this year. Its shares are up over 24% year-to-date, well outperforming the overall market. Roth MKM has listed it as one of its top spinoff picks. 

The firm also likes welding company Esab (ESAB) spun off from parent company Enovis (ENOV), and paper-maker Sylvamo (SLVM) spun off from International Paper (IP). This year the stocks are up 28% and 35%, respectively. 

Other companies expected to spin off this year include Baxter International’s (BAX) Vantive, Edwards Lifesciences’ (EW) critical care business, and Unilever’s (UL) ice cream unit. 

There are no guarantees in life or investing, but history has shown that there’s good reason to be bullish on spinoff stocks.

TOGETHER WITH RYSE

Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

If you missed out on these spectacular early investments in the Smart Home space, here’s your chance to grab hold of the next one.

RYSE is a tech firm poised to dominate the Smart Shades market (growing at an astonishing 55% annually), and their public offering of shares priced at just $1.50 has opened. 

They have generated over 20X growth in share price for early shareholders, with significant upside remaining as they just launched in over 100 Best Buy stores.

Retail distribution was the main driver behind the acquisitions of both Ring and Nest, and their exclusive deal with Best Buy puts them in pole position to dominate this burgeoning industry.

Secure your stake before the offer closes.

ON OUR RADAR

Bloomberg: Roughly one in 37 homes are now considered seriously underwater in the US, and that share is much higher across a swath of southern states.

BI: Companies that once championed “woke” social causes are retreating from them. Nearly half of surveyed companies reported backlash against ESG efforts.

CNN: Consumers may be fed up with high store prices, but they’re still spending on flights, hotels, and… Disneyland.

BI: Neuralink's brain-chip implant malfunctioned, and the company is reportedly considering removing it from its human patient.

The Guardian: California housing costs are now double what they are in the rest of the US. California has seen a 40% rise in homelessness in the past five years.