In 1993, Patrick J. Cusatis, James A. Miles and J. Randall Woolridge did a research study on the stock performance of spinoff companies from 1963 to 1988. From the research, they found that spinoffs outperformed the S&P 500 by about 10% per year in the first three years of their independence. The study also found that parent companies of spinoffs also outperformed the index by more than 6% per year for the same three years. A 1999 McKinsey study researched the performance of spinoffs between 1988 and 1998 and showed that spinoffs gave shareholders 27% annualized returns over two years vs. 17% for the S&P 500. The Guggenheim Spin-Off ETF, which is based on the Beacon Spin-Off Index, has also generated a return of 384% since the March 9^th 2009 bottom compared to 203% for the S&P 500 in the same time period.

Chart: Yahoo Finance

It looks as ......