GOLDMAN: These 12 Companies Have Secret Hidden Assets That Nobody Appreciates

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The recent trend of conglomerates selling off divisions could continue, and Goldman Sachs analysts have a few suggestions, according to a recent report.The firm points out 12 companies that could potentially increase their valuations, or the valuation of particular division, by selling them off or restructuring the company.

Those 12 examples are listed here, and include Goldman’s price targets on the company, as well as the firm’s valuation for each stock as a sum of its parts. We’ve also pointed out the divisions ripe for a spin off, according to Goldman’s analysts.

Abbot Laboratories

The market is too focused on Abbot's Humira (a rheumatoid arthritis drug), while it has other successful divisions covering the nutrition market and medical devices. The company recently reorganized and is now in a position to spin off some of its businesses, according to Goldman analysts.

Price now: $53.53

Sum of the parts price target: $60.00

Source: Goldman Sachs

Dean Foods Company

The margin situation for the firm is now looking up, as prices stabilise. The Whitewave-Alpro division, which focuses on soy milk, is currently being undervalued, according to Goldman analysts. The firm is considering spinning off the division.

Price now: $12.28

Sum of the parts price target: $19.00

Source: Goldman Sachs

DryShips

Goldman is still neutral on the stock, and worried about oversupply in the sector. The Ocean Rig share offering, a division owned by DryShips, should increase the valuation of that portion of the business and others.

Price now: $4.68

Sum of the parts price target: $6.00

Source: Goldman Sachs

EMC Corporation

EMC's core assets are undervalued. Its storage hardware business is only valued at a 10x multiple, while other rivals are valued at 20x, according to Goldman analysts. Its cloud business is being dragged down by other holdings.

Price now: $27.73

Sum of the parts price target: $31.00

Source: Goldman Sachs

McKesson

McKesson's presence in the generic oncology space has the potential to grow, particularly in the wake of its purchase of U.S. Oncology. Potential for spinoff of the firm's healthcare IT division, according to Goldman analysts.

Price now: $85.02

Sum of the parts price target: $99.00

Source: Goldman Sachs

MeadWestvaco

Outside of packaging business, firm has both a land management division and a chemicals group. The timberland division is notably undervalued, according to Goldman.

Price now: $34.01

Sum of the parts price target: $42.00

Source: Goldman Sachs

Medtronic

The company has a new CEO, who may choose to change the business' organisation. Specifically, the firm's diabetes and neuromodulation businesses are undervalued, according to Goldman.

Price now: $42.32

Sum of the parts price target: $54.00

Source: Goldman Sachs

Merck

The company has a consumer business that would be more valuable separate from firm, according to Goldman.

Price now: $37.20

Sum of the parts price target: $41.00

Source: Goldman Sachs

Murphy Oil

Murphy Oil is currently divesting its three refineries, may sell its retail business joint-venture position, according to Goldman.

Price now: $66.63

Sum of the parts price target: $89.00

Source: Goldman Sachs

Pfizer

Pfizer's CEO is considering a break-up of the firm. The firm's animal health, nutritionals, and consumer division may be worth more independently, according to Goldman.

Price now: $20.89

Sum of the parts price target: $25.00

Source: Goldman Sachs

Plains Exploration and Production

The firm may sell off its deepwater business in the Gulf of Mexico, according to Goldman.

Price now: $34.51

Sum of the parts price target: $48.00

Source: Goldman Sachs

Safeway

The Blackhawk division (gift card network) of Safeway is undervalued, and management is talking about a spinoff, according to Goldman.

Price now: $24.92

Sum of the parts price target: $25.00

Source: Goldman Sachs

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