Zacks Investment Ideas feature highlights: Tripadvisor, Fortune Brands Home & Security and Fiesta Restaurant Group

Zacks Investment Ideas feature highlights: Tripadvisor, Fortune Brands Home &
                     Security and Fiesta Restaurant Group

PR Newswire

CHICAGO, Nov. 11, 2013

CHICAGO, Nov. 11, 2013 /PRNewswire/ --Today, Zacks Investment Ideas feature
highlights Features: Tripadvisor, Inc. (Nasdaq:TRIP-Free Report), Fortune
Brands Home & Security, Inc. (NYSE:FBHS-Free Report) and Fiesta Restaurant
Group, Inc. (Nasdaq:FRGI-Free Report).


3 Superstar Spin-offs

Luxury retailer Coach began business in 1941 in a Manhattan loft with 6
skilled artisans crafting leather goods.

Hanes began making men's socks in 1901. It went on to make women's socks and
when nylon was invented in 1938, Hanes was among the first to make pantyhose.
It also branched out to make men's underwear.

What do these two companies have in common?

Hanes was bought by Sara Lee, best known for its baking business which
included bread and other baked goods as well as other food and beverage brands
such as Hillshire Farm, Jimmy Dean and Ballpark, in 1979.

Coach was initially a family owned business but, strangely enough, it was also
bought by Sara Lee in 1985.

Sara Lee is now known as Hillshire Farm and focuses mostly on meat products.

Sara Lee ultimately decided to spin-off both Coach and Hanes into their own
separately traded companies so it could focus on its food business. Coach went
public in 2001 and Hanes in 2006.

Spin-offs Unlock Value

Over the last 100 years, large U.S. companies would often buy secondary
businesses either because it enhanced its current business model or because it
didn't know what else to do with its cash.

In 1976, for instance, oil giant Mobil Oil bought department store chain
Montgomery Wards in one of the strangest marriages between two companies.

When business divisions are in totally separate industries, there can be calls
for a spin-off.

Shareholders and analysts argue that spin-offs of a division can unlock
"value" that Wall Street simply isn't recognizing in a company when it is a
part of a larger business.

Advantages of a Spin-off

Spin-offs are not the same as new companies going IPO, though they sometimes
get lumped into the same category.

Spin-offs usually have a much longer business history, such as Coach's 59
years in business before its IPO, and that can translate into an experienced
management team.

Financial data can also be easier to come by because its sales and earnings
are usually reported as part of a larger conglomerate.

3 Superstar Stock Spin-Offs to Buy Now

Not all spin-offs move higher out of the gate but these three spin-offs have
seen their shares soar since their parent company set them free.

They also have an attractive Zacks Rank and earnings growth.

1. TripAdvisor

2. Fortune Brands Home & Security

3. Fiesta Restaurant Group

1. Tripadvisor, Inc. (Nasdaq:TRIP-Free Report)

Surprised to see TripAdvisor on a list of spin-offs? It was spun-off from
Expedia in Dec 2011.

TripAdvisor is the largest travel web site in the world. It has 260 million
unique monthly users.

Forward P/E = 59
2013 Expected Earnings Growth = 1.6%
2014 Expected Earnings Growth = 33%
Zacks Rank #3 (Hold)

TripAdvisor has a good earnings surprise track record since its IPO. It has
only missed once.

Shares are up 205% since the IPO.

2. Fortune Brands Home & Security, Inc. (NYSE:FBHS-Free Report)

Fortune Brands Home & Security displays its pedigree in its name, as it was
spun-off from Fortune Brands, Inc. in Sep 2011.

The company sells MasterBrand kitchen cabinets, Moen faucets and Simonton
windows as well as security products through the Master Lock brand.

Forward P/E = 27.5
2013 Expected Earnings Growth = 68%
2014 Expected Earnings Growth = 28%
Zacks Rank #2 (Buy)

Fortune Brands Home & Security also has a solid earnings track record, with
just one miss since its IPO.

As the real estate market has heated up, and consumers started spending money
remodeling their homes again, the company's earnings and revenue has soared.

Shares are up 223% since the IPO.

3. Fiesta Restaurant Group, Inc. (Nasdaq:FRGI-Free Report)

Fiesta is the least known of these three companies. It was spun off from
Carrols Corporation, which operates 570 Burger King restaurants in 13 states
in the Northeast and Mid-Atlantic, in April 2012.

It operates 310 quick-casual restaurant brands Pollo Tropical and Taco Cabana.
Pollo Tropical offers tropical and Caribbean inspired food at 100 company
owned and 38 franchised restaurants in the U.S., Puerto Rico, the Bahamas,
Costa Rica, Ecuador, Honduras, India, Panama, Trinidad & Tobago, Venezuela and
the Dominican Republic.

It has been aggressively expanding the Pollo Tropical chain internationally.

Fiesta also operates 164 company owned and 8 franchised Taco Cabana
restaurants in the U.S.

Forward P/E = 54.5
2013 Expected Earnings Growth = 29%
2014 Expected Earnings Growth = 26%
Zacks Rank #3 (Hold)

For 2014, it expects to open 20-22 Pollo Tropical and 2-4 Taco Cabana
restaurants. It also forecasts 2014 comparable restaurant sales for Pollo
Tropical of 3% to 5% and 1.5% to 3.5% at Taco Cabana.

Fiesta also has a solid EPS track record. It has just 1 miss since its IPO.

Shares are up 237% since the IPO.

Spin-offs As Hidden Gems

Spin-offs don't get nearly the love that start-up IPOs get. They don't get
their logo hung in a banner on the steps of the New York Stock Exchange.

But spin-offs usually have a longer business track record and, once freed from
operating within a larger company, they can finally shine.

Don't neglect the spin-off when looking for that next hidden gem.

[In full disclosure, the author of this article owns shares of TRIP.]

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