We start with the first niche, Spinoffs. Companies may spinoff a unit for varying reasons. It may be a way to shift debt or concentrate a segment. It creates an economic anomaly with a few properties

1. Investors may be forced to sell the spinoff since the new entity may be a different class of investment. This forces undue pressure on the price of the spinoff initially.
2. The new spinoff may give insiders a chance to buy at a reasonable price. The new spinoff has management and investors aligned with a big incentive for new management to prosper on a rising stock price.
3. It can give tremendous leverage to the upside if structured properly. Usually the spinoff is a high ROE entity with added debt which can post impressive results.

A couple case studies are included. First, is Marriott International and Host Marriott. The second case is Liberty Media and TCI.

SEC filings are the major source of information on the new Spinoff. Investors should read the material carefully. Pay close attention to the three points above. Look for entities that will force initial selling where insiders are given a stake and that has the potential to pop earnings. Some additional research on spinoffs can be found at these websites and articles.