44 stocks on takeover target radar
One of the names on Morgan Stanley's list could be the next multibillion dollar acquisition.
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:
Newfield Exploration (NFX), $4.1 billion cap
Sandridge Energy (SD), $3.1 billion cap
Tidewater (TDW), $2.3 billion cap
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
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
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
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
Nationstar Mortgage Holdings (NSM), $2.7 billion cap
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
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
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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Do it once a year. This allows the best-performing asset classes to take off and run.
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