This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

4 Small Stocks With Buyout Rumors

Stocks in this article: BIOD MDT BSX BSDM XRAY BLTI SVNT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Sterman

NEW YORK ( StreetAuthority) -- With a rising economy comes rising expectations. CEOs at mid-sized and large companies need to find new paths to growth to justify -- or boost -- their company's stock price. That's no mean feat in an economy still in slow-growth mode. As a result, expect to hear about plenty more deal-making in 2011 as smaller companies get acquired to help jumpstart the top line.

To be sure, acquiring companies don't want to buy a company many years from generating its own action. Instead, they want companies that have already done a lot of heavy lifting, developing new products and the marketing plans to support them.

I've identified four small companies that are truly ripe for a deal. Investors should take a close look at these firms.

1. Savient Pharma (SVNT)

This company has been practically begging "buy me." After receiving Food and Drug Administration approval for a new and highly-effective drug for the treatment of gout, the company declared it had no intention of remaining solo. Speculation that a major pharmaceutical company such as Bristol-Myers Squibb (BMY) or Pfizer (PFE) would snap up Savient pushed its stock up north of $20 last September. When the company admitted it couldn't find a taker, shares plunged and are now below $10.

Since then, Savient has decided to build a sales force and will start to generate its own sales until a buyer emerges. Sales began in the fourth quarter of 2010 and are expected to hit $10 million per quarter by the third quarter of 2011. Just this week, Savient received a significant endorsement when the Department of Veterans Affairs signed up for a five-year purchase agreement. (It is estimated that one in seven gout sufferers is a U.S. veteran.)

The VA deal may be the catalyst that brings potential suitors back to the table. Savient could secure $40 million in revenue this year and perhaps double that in 2012. Analysts at Global Hunter Securities predict annual sales may eventually top $500 million. Those are the kinds of numbers that get the attention of Big Pharma. With or without a buyout, this stock looks quite undervalued. A buyout would simply help the stock to arrive at its destination much faster.

2. Biolase Technologies (BLTI)

I profiled this company two months ago and shares have risen 175% since then. That may not be the end of it. Shares may surge yet higher if takeover rumors are to be believed.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs