This Spin Off May Prime The Pump
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When Elcom International (ELCO) announced on Oct. 12 that it was considering taking public one of its two units, the shares slid from 8 3/4 to 7 1/2, rather than climbing as CEO Robert Crowell had hoped they would. Said one New York money manager who happily bought when the stock dropped: "Little-known Elcom has become even more undervalued."
He thinks that with the spin-off to the public of 20% of its Elcom Systems division, the real worth of the unit will be unlocked, boosting the overall value of parent Elcom to between 14 to 18 a share. Here's how: