NEW YORK (TheStreet) -- Here's an overlooked lesson courtesy of the financial crash and subsequent corporate "handouts": a well telegraphed M&A narrative triggered by a company's need for desperation financing can produce a winning stock bet. No, we aren't talking about Warren Buffett making hay in shares of GE and Goldman Sachs, or even Uncle Sam turning a profit on TARP checks.
As investors prepare for a post-Labor Day final market stretch of 2012, it's worth reflecting on what three of the biggest stock turnaround stories since the worst of the financial crisis -- SiriusXM (SIRI), Dollar Thrifty Automotive (DTG) and General Growth Properties (GGP) -- have in common.
In late August, Hertz's (HTZ) $2.3 billion acquisition of Dollar Thrifty capped a multi-year takeover battle -- -- at one point during the worst of the financial crisis, Dollar was offered $2 per share in a takeover -- while SiriusXM and General Growth may be multi-billion dollar takeovers that will cement impressive returns from a crisis-time nadir. Following Dollar Thrifty's acquisition, investors are increasingly focusing on similar long-prepared takeovers of SiriusXM and General Growth as a way to lock in economic recovery trade gains.
After each company neared all-time lows around $1 a share during the crisis, M&A speculation has followed a linear progression, also matched by earnings rebounds and balance sheet fixes that fueled share prices, and provided a floor in share values distinct from shareholder M&A hopes.Market expectations have been on the money about an impending push by John Malone's Liberty Media (LMCA) to take control of SiriusXM as a driver of the satellite radio giant's stock. Meanwhile, activist investor Bill Ackman, the head of Pershing Square Capital Management, is pushing for a proposed takeover of mall operator General Growth by Simon Property Group (SPG), in a $20 billion-plus deal that would be one of the largest U.S. acquisitions since the crisis. In all three cases, following a well telegraphed M&A narrative has been a winning proposition for ordinary investors. Dollar Thrifty shares are up nearly 25% in 2012 on its Hertz takeout, while Sirius and General Growth are up nearly 40% on the year. All three companies are at or near post-crisis highs and many multiples above 2009 lows. Here's the details on three financial crisis "bailouts" that resulted in big post-crisis gains for shareholders, and where the shares stand now as they come full circle from crisis lows.
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