NEW YORK (Stockpickr) -- The recession of 2008 and 2009 turned out to be a godsend for many companies. The slowdown provided the opportunity to take a close look at expense structures, and many firms found ample areas to trim down. Those moves led to a steady spike in profit margins and an ever-rising pile of cash. The multi-year restructurings often kept management so busy that there was little time to look outside the business onto the broader landscape.
Yet as we head into the middle of 2012, the corporate playbook may soon change. Companies are now quite flush with cash, but a still-slow economy means further sales and profit gains may be elusive in coming quarters. Remember that top executives are rewarded with a slew of financial incentives to deliver rising sales and profits -- and a growing stock price.
To make that happen, a lot of these executives are now likely to be more susceptible to the pitch from investment bankers. That pitch: "Why not go out and buy yourself some growth through selected acquisitions?" Growth-through-acquisitions has been a proven strategy in past economic cycles, and this one is no different.
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