To catch the biggest fish, you need to find a pond with very few fishermen.

Less competition means a better chance of catching a lunker.

The same goes for the stock market…

You want to find the areas of the market that very few are looking at. That’s how you make the biggest gains.

This is how the big-time investors make the real money. For example, Warren Buffett — the greatest investor of all time — has used special situations like these to make enormous gains.

And there’s one special situation that’s easy to understand … offers huge gains … and isn’t followed by many on Wall Street.

That means it offers you a huge opportunity.

It’s called a “spinoff.”

How It Works

When a company has a division it believes would be worth more as an independent company, it spins the division off to shareholders.

They take it out of the larger company’s umbrella and give it a life of its own.

Shareholders of the parent company are given shares of the new company — for free.

Imagine waking up one morning to find shares of a new company sitting in your brokerage account. It’s a great feeling.

And that new stock gives you the opportunity for profits with a whole new company.

Now, let me give you a real-life example of how this works. This is a spinoff that Wall Street veteran Charles Mizrahi recommended in Lifetime Profits — his premium research service focusing on how to profit from special-situation stocks…

Nuance Communications Inc. (Nasdaq: NUAN) is a leader in voice recognition software — the kind that turns audio into text.

The company was in the midst of a transformation… Management wanted to focus on voice recognition for the medical community because it saw health care as a market in great need of this technology.

So, it decided to get rid of any divisions that weren’t focused on health care.

Now, because of this transition, the company’s financial statements were a mess. Most analysts were staying far away from it. But Charles saw past all that…

He dove in and found that the stock market was mispricing Nuance. The technology was outstanding. And management’s focus on health care made it a winner.

With this knowledge, Charles added Nuance to the Lifetime Profits portfolio on October 10, 2019.

Around that time, Nuance spun off its automotive division because it no longer fit in the company’s long-term plans — remember, it was focusing on health care.

So, Charles added the spinoff company, Cerence Inc. (Nasdaq: CRNC), to the portfolio about two months later.

Wall Street didn’t understand the company. But Charles and his team did. They knew that Cerence was set to claim a huge market share in the automotive industry — leaving its competitors in the dust.

Fast forward to today — about a year and a half later — and Nuance is up 196%. But the story only gets better…

Because Cerence, the spinoff Wall Street didn’t want, is up 361%!

Now, both of these stocks are currently trading well above Charles’ buy-up-to prices … but there are plenty more opportunities like this in the market.

How to Profit

Special situations like spinoffs are a massive opportunity if you know where to look.

Luckily for us, Charles has been researching these opportunities for years. He knows exactly where to dig to find potential blockbusters.

He and his team recommended 18 special situations in 2020. And nearly all of those are now up double digits or more. One skyrocketed to over 100% gains in the past 12 months.

Now, he’s recommended three new special situations so far this year, and all of them are still below their buy-up-to prices. But that won’t last long.

You can get in on these special situations by signing up with Charles for his Lifetime Profits service.

He’ll send you weekly updates on what he’s seeing in the markets. And he’ll recommend the best special situations he’s seeing every month.

You do not want to miss out on this.

Regards,

Nicole Zdzieba
Assistant Managing Editor, Alpha Investor

This article was originally published in November 2020.