NCR Corporation (NYSE:NCR) announced earlier this week that its proposed spin-off of Teradata Corporation is on track for the end of the third quarter. The trading itself is scheduled to begin on October 1st when NCR shareholders will receive one share of Teradata for each share they own.

The data-warehousing solutions division (to be Teradata) continues to grow as well, reporting a revenue increase of 9% to $433 million. There have also been rumors circulating that the company could become an immediate buyout target for IBM (NYSE:IBM) or Oracle (NDAQ:ORCL). The spin-off is also expected to result in significant cost savings for both companies as well as allow each to focus on their core competencies.

Investors should also note that spin-offs in general tend to outperform the overall market by a substantial margin. This is for two reasons: (1) shareholders of the parent company may receive shares they do not want and sell for no reason, which can push down the share price without warrant, and (2) most companies that undergo spin-offs do so for very good reasons - the two companies share few synergies and can reduce costs and increase focus apart.

Clearly this situation is one worth watching for shareholders and investors alike. For existing shareholders, it is a sign that the company is committed to unlocking shareholder value and also gives a "free" stake in a great new company. For potential investors, spin-offs represent great opportunities to invest in the time after the spin-off occurs as their is undue selling. Combined, these factors make NCR a stock worth watching!

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