Reuters / Brendan McDermid
- Companies targeted in M&A deals usually see their stock prices increase, creating money-making opportunities for investors able to identify them.
- Morgan Stanley has singled out 15 companies that meet their proprietary criteria as high-likelihood acquisition targets.
Wall Street expects M&A activity to accelerate in 2018, which should create opportunities for investors looking to profit from accompanying stock spikes.
After all, when an acquisition offer is made, the company being bought usually sees its share price increase. So the process is simple - identify potential acquisition targets, buy them, and hope a deal gets announced.
Easier said than done. But lucky for you, Morgan Stanley is here to make things a little easier.
The firm has developed a model that sorts stocks by acquisition likelihood. The methodology involves calculating the probability that a company will be on the receiving end of at least one tender offer. And in figuring out its list, Morgan Stanley weighs a combination of cohort information and stock-specific fundamentals.
Without further ado, here are 15 stocks that the firm says are among the most likely to receive an acquisition offer sometime in the next 12 months.
(Note that Morgan Stanley has screened its universe of companies to only include large and liquid stocks, and that all company statistics are as of year-end 2017. The firm's list has also been culled so it doesn't include more than two companies from the same sector.)