“Do one thing and do it well.” Over time, companies forget that sage advice, preferring instead to build mini empires. Whether through acquisitions or internally developed projects, businesses swell with many tangential businesses. Some end up straying away from the company’s original objective, others are too small to make a difference.

The result: a bloated stock where neither the primary business nor the side projects do really well. The answer many companies take is to spin off the ancillary business into a free-standing, publicly traded company. By separating from the business the market more accurately value its operations. It also allows the new company to dedicate more resources towards serving its market instead of getting lost in the shuffle of the parent.

Below are three stock spinoffs set to occur within the next 12 months. Let’s take a closer look at each and see whether you should buy the business that will be going public.

Vista Outdoor (VSTO)

Outdoor lifestyle leader Vista Outdoor (NYSE:VSTO) first proposed spinning off its ammunition business back in 2022. It wanted to separate the more staid outdoor equipment business from its more volatile ammo unit. It was not much different when Smith & Wesson Brands (NASDAQ:SWBI) and American Outdoor Brands (NASDAQ:AOUT) when the two separated in 2020.

Vista previously sold off its gun business and now just owns some of the leading brand names in ammunition, including Federal, Remington, CCI and Speer. The shooting sports division was renamed The Kinetic Group, and it will have NYSE ticker symbol HUNT when the spinoff is completed. 

Ammo generates the bulk of Vista’s revenue, some $1.1 billion through the first three quarters of fiscal year 2024. That equates to 53% of total revenue, however, it is a 19% year-over-year decline due to falling gun sales.

Ammo tends to be subject to the same swings in emotion as firearms. Yet, hunting makes up large portions of ammo sales, so the volatility is not as dramatic. During shortages, though, prices can surge helping to increase profits.

Because of its premiere positioning, HUNT stock would make for a good portfolio addition as the number of households owning a firearm swells.

Baxter International (BAX)

Just over a year ago, medical products specialist Baxter International (NYSE:BAX) announced it was spinning off its global renal care and acute therapies business into a new company. By separating the unit, Baxter hopes to become a simpler, “more integrated and nimble organization.“

Baxter isn’t alone in shedding its renal care business. Last year, a joint venture between Medtronic (NYSE:MDT) and DaVita (NYSE:DVA) was spun off into an independent business called Mozarc Medical. 

Even as a standalone company with a narrow focus, Baxter’s renal care business would continue serving over a million patients in more than 70 countries. It currently generates about $5 billion annually in a market growing about 3%-4% a year. When separated, the business will be called Vantive and will face new competition.

Novo Nordisk (NYSE:NVO) is looking to expand the indications its diabetes and weight-loss drugs Ozempic and Wegovy can treat. Kidney disease is one such area.

Last October saw early success of semaglutide in limiting renal impairment in patients with type 2 diabetes and chronic kidney disease. It chose to halt testing early because it had reached all its endpoints. 

That could limit Vantive’s ability to grow and might make the stock a tough sell.

Western Digital (WDC)

Computer hard drive maker Western Digital (NASDAQ:WDC) wants to spin off its flash memory business after talks to merge it with partner Kioxia stalled. The purpose of the spinoff is to unlock value for WDC shareholders while at the same time giving each business “the strategic focus and resources to pursue opportunities in their respective markets.” The target date for the separation is the back half of 2024.

Western Digital got into the flash memory market in a big way in 2016, when it acquired SanDisk for $19 billion. The pandemic, though, seemed to take out all demand for flash memory, creating an industry glut.

Samsung cut memory production last year due to excess inventories causing prices to plunge. However, it began raising them again this year. An industry recovery is expected by next year.

Western Digital and Kioxia reportedly increased first-quarter output to 1.22 million units, according to industry site Omdia. That’s a 20% increase over the 1.02 million units produced in the fourth quarter. That would be a fortuitous turnaround for the spinoff.

Shares of Western Digital have been rising ever since the separation was announced last year and the new company could make for an interesting play on the memory market.

On the date of publication, Rich Duprey held a LONG position in VSTO and SWBI stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.