44 stocks on takeover target radar

One of the names on Morgan Stanley's list could be the next multibillion dollar acquisition.

By MSN Money producer Mar 27, 2014 8:50AM

Man with cash by safety deposit boxes © kali9/Getty Images

By Wallace Witkowski, MarketWatch MarketWatch


With U.S. corporations sitting on more than $1 trillion in cash and many companies facing organic growth challenges, investors are on the lookout for the next big multi-billion dollar acquisition.


About 44 multi-billion dollar cap companies have a high likelihood of receiving at least one tender offer over the next 12 months, according to a screen by Morgan Stanley.


The firm used several factors in the screen:

  • Dividend yield: Lower yields imply higher offer probabilities.
  • Price-to-book ratio: Cheaper stocks have a higher offer likelihood.
  • Debt-to-asset ratio: Higher leverage means an offer is more likely.
  • Market cap rank: Smaller caps have higher offer probabilities, mega-caps, less likely.
  • Sector: Healthcare companies are more attractive targets than industrials.
  • Liquidity: High trading volume relative to market cap (market caps over $2 billion with average daily trading volumes of $1.6 billion over the past 90 days). Morgan Stanley said the inclusion of this factor boosted the presence of technology stocks on the list. Indeed, recent reports have forecast that 2014 will be a big year for tech acquisitions.

Here is the screen by sector: 


Energy

Newfield Exploration (NFX), $4.1 billion cap

Sandridge Energy (SD), $3.1 billion cap

Tidewater (TDW), $2.3 billion cap 


Materials

Cliffs Natural Resources (CLF), $3 billion cap

Axiall (AXLL), $3.1 billion cap

Domtar (UFS), $3.4 billion cap

Royal Gold (RGLD), $4.2 billion cap 


Consumer Discretionary

Sinclair Broadcast Group (SBGI), $2.6 billion cap

Wendy's (WEN), $3.3 billion cap

Tempur Sealy International (TPX), $3 billion cap

Brinker International (EAT), $3.5 billion cap

Bally Technologies (BYI), $2.5 billion cap

DreamWorks Animation (DWA), $2.2 billion cap

J.C. Penney (JCP), $2.6 billion cap

American Eagle Outfitters (AEO), $2.5 billion cap 


Consumer Staples

Ingredion (INGR), $5 billion cap

Hain Celestial Group (HAIN), $4.6 billion cap

Hillshire Brands (HSH), $4.6 billion cap

Whitewave Food (WWAV), $5 billion cap 


Health care

Celgene (CELG), $57.8 billion cap

Express Scripts Holding (ESRX), $58.7 billion cap

WellPoint (WLP), $28.5 billion cap

Regeneron Pharmaceuticals (REGN), $31 billion cap

Alexion Pharmaceuticals (ALXN), $29.9 billion cap

Aetna (AET), $27 billion cap

Cigna (CI), $21.9 billion cap

Becton Dickinson (BDX), $21.9 billion cap

Cerner (CERN), $19.8 billion cap


Financials

Nationstar Mortgage Holdings (NSM), $2.7 billion cap 


Tech

Brocade Communications Systems (BRCD), $4.4 billion cap

On Semiconductor (ONNN), $4.1 billion cap

Tibco Software (TIBX), $3.4 billion cap

SunPower (SPWR), $3.9 billion cap

Ingram Micro (IM), $4.5 billion cap

Jabil Circuit (JBL), $3.7 billion cap

SunEdison (SUNE), $5.3 billion cap

Teradyne (TER), $3.9 billion cap

Arris Group (ARRS), $4 billion cap

NeuStar (NSR), $2.1 billion cap 


Telecom

Crown Castle International (CCI), $24.7 billion cap 

SBA Communications (SBAC), $11.7 billion cap

Level 3 Communications (LVLT), $9 billion cap 

Windstream Holdings (WIN), $5 billion cap 

Frontier Communications (FTR), $5.4 billion cap 


More from MarketWatch 


1Comment
Mar 27, 2014 11:45AM
avatar

This is a mighty big List....


We have a couple on it, but I'm not holding my breath...

Seldom do we get a chance to make 20-40% over the Market price on anything...

Seems the big boys, that are johnny come latelys do, Wonder why that is...?? 

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