Nothing Jolts a Stock Higher
Nothing Jolts a Stock Higher by Louis Basenese – Casey Research
Nothing jolts a stock higher than an unsolicited takeover offer.
The profits just can’t be beat…
Research from The Journal of Economic Perspectives pegs the average gain at 38% based on a sample of more than 4,200 deals.
But it’s not uncommon for individual premiums to total 50%, 60%, 75%, or even higher.
Especially right now.
As CNBC reports, “Buyout firms are paying the highest prices for deals since the financial crisis.” That’s driving up prices for strategic buyers, too.
Heck, bidding wars are becoming downright commonplace.
Look no further than Straight Path Communications (STRP).
On April 10, AT&T made an offer at $95.63 per share, equal to a 162% premium. But then Verizon entered the mix and ultimately won the battle on May 11 with a bid equal to $184 per share.
That’s a 404% premium to Straight Path’s starting stock price.
Keep in mind, most of these gains are realized in a single day!
I’m sure you wouldn’t argue with single-day returns like that.
Obviously, these examples only tell part of the story…
There are countless examples of this occurring in the market.
Frankly, I’ve yet to find another investment with similar upside potential in such a short amount of time.
The tricky part, of course, is knowing how to identify takeover targets before a deal is announced.
That’s where my expertise comes in handy. Because I have a great way to spot these deals early.
Five ways, actually…
Easy as 1, 2, 3, 4, 5…
To win at the takeover game, you have to identify companies in time to “skim” profits as a deal is announced. And it’s actually not that difficult if you know what to look for…
After evaluating hundreds of deals in recent years, I’ve discovered five signs that a takeover could be nigh.
Here they are…
For good reason, the bulk of merger and acquisition (M&A) deals are announced on Mondays. That’s because investment bankers use the weekends to finalize deals. This way, there’s no chance someone can leak information and impact current prices ahead of a final agreement.