EXCLUSIVE: Alphabet’s Empire Could Be Worth More In Pieces, Jay Woods Says

Companies that spinoff business units can often unlock shareholder value, a move that Comcast Corporation (NASDAQ:CMCSA) hopes to achieve. Market expert Jay Woods tells Benzinga that when it comes to sum-of-the-parts valuations, there’s one company he wishes would break up or spinoff its units.

Alphabet Undervalued Sum-of-the-Parts Valuation

Woods, who is the Chief Market Strategist at Freedom Capital Markets, counts Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) as one of his favorite stocks.

An investor in the YouTube and Google parent, Woods argues that the Magnificent Seven stock could unlock shareholder value with a breakup similar to what other companies have done.

"It’s one of the hottest things that has happened in this market and when you look at companies that can be broken up, Hello Alphabet," Woods tells Benzinga. "It is just prime to unlock shareholder value if they ever did that."

Woods said the company is so much more than Google search and a sum-of-the-parts valuation could unlock the valuation of other units.

"If they ever started spinning off… that’s why this is a core holding in my portfolio."

The market expert welcomes a push by Sen. Elizabeth Warren (D-Mass.) to breakup the company due to its size.

"Think of the shareholder value in a breakup."

Woods uses the comparison to AT&T back in the 1980s and 1990s. The telecom divvied up into other telecommunications and tech companies.

Worth more than $4 trillion as a whole unit, Woods said spinning off a unit like YouTube could be worth $1 trillion on its own. Woods said he dares Alphabet to spin off YouTube as an investor who thinks value would be unlocked.

"These spincos are showing that there is value when you split them and you can focus on the individual units within them. I love this theme."

Recent Spinoff Success Stories

Woods said he doesn’t know enough about the Comcast spinoff to comment, but highlights that the stock was up five points on the news.

"So people obviously see the value in these spincos," Woods tells Benzinga.

Woods highlights the spinoff of General Electric, which split the company into GE Aerospace (NYSE:GE) and GE Vernova (NYSE:GEV).

Another success story is DuPont (NYSE:DD) spinning off Qnity Electronics (NYSE:Q).

The recent split of Honeywell (NYSE:HON) and Honeywell Aerospace (NYSE:HONA) is worth watching, Woods added.

"There is precedent for these spincos to work and you’re adding shareholder value. Let’s keep a close eye on Honeywell. Why not take a flyer on the spinco?"

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