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!

Morningstar Identifies Likely Takeover Candidates Across Equity Coverage Universe; Publishes Merger And Acquisition Insights Report For 2013

CHICAGO, Jan. 29, 2013 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published its merger and acquisition insights report for 2013, "M&A Market Awaits Clearer Economic Signals." Morningstar's comprehensive research report includes investment ideas among its list of potential takeover candidates, merger and acquisition analysis by sector, credit implications of merger and acquisition activity, an examination of the role economic moats and stewardship play in deal-making, and a global outlook for merger and acquisition activity.

"We think 2013 will bring an uptick of deal activity, after we've seen a decline in the number of deals and very little growth in the total value of deals in the last two years," said RJ Hottovy, CFA, director of global consumer equity research for Morningstar and co-editor of the report. "While we don't see the potential for huge blockbuster deals in the near term, there's no shortage of companies with available capital on their balance sheets and high operating margins, fewer organic growth opportunities, and candidates with attractive valuations."

According to Morningstar, the top 11 investment ideas among potential takeover candidates in 2013 are:

  • Abiomed, Inc.
  • BG Group PLC
  • Chesapeake Energy Corp
  • City National Corp
  • Guess, Inc.
  • Icon PLC
  • Kohl's Corp
  • Leap Wireless
  • Mosaic
  • NII Holdings Inc.
  • SandRidge Energy Inc.

While the global economic recovery has remained sluggish, 14 prospective takeover targets Morningstar identified in the past two years have accepted acquisition offers. In 2012, IBM acquired Kenexa at a 42 percent premium, Sprint settled on a deal to acquire Clearwire—though DISH Network has since joined the bidding—and Deutsche Telekom subsidiary T-Mobile and MetroPCS announced a merger. PVH Corp also acquired Warnaco in 2012—a case where Morningstar had identified both the acquirer and the takeover candidate. Four of the 14 prospective takeover targets Morningstar identified were also highlighted as top investment ideas in Morningstar's annual merger and acquisitions insights report in 2012 or 2011.

In the 2013 research report, Morningstar equity analysts identified a total of 71 takeover targets across eight sectors: basic materials, consumer cyclical and consumer defensive, energy, financial services, healthcare, industrials, technology/communication services, and utilities. Potential takeover candidates for each sector were determined by unique and proprietary scoring systems for each sector, based on industry-specific drivers of merger and acquisition activity as well as factors such as free cash flow, management, and capital structure.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
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 16,985.61 +78.99 0.47%
S&P 500 1,972.83 +9.12 0.46%
NASDAQ 4,419.0340 +27.5710 0.63%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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