11 M&A Stock Picks for 2013

Meanwhile, after a flurry of telecom sector M&A that saw Sprint (S) fall into the hands of Japan's Softbank, Clearwire (CLWR) fall under the gaze of Sprint, and Dish Network (DISH) and MetroPCS (PCS) merge with T-Mobile USA, Morningstar expects a continuation of industry consolidation.

"The proposed merger betweenT-Mobile USA and MetroPCS shifts the acquisition spotlight in the U.S. onto Leap Wireless. ... The firm has assets, spectrum in particular, that would be valuable to Sprint or Verizon Wireless as they look to keep pace with AT&T," Morningstar wrote. "[We] believe the firm should look for a deal sooner rather than later."

Finally, Morningstar sees the prospective private equity takeover of Dell (DELL) as an indication of the potential acceleration of leveraged buyout activity as banks recommit to financing leveraged buyouts. "Microsoft's (MSFT) potential involvement in the Dell deal could signal increased deal collaboration between strategic and financial buyers over the coming months," the analysts said.

All told, Morningstar expects 2013 to be a year of recovery for M&A, after global volumes were flat last year and were aided by a late-year surge in activity.

"Although the global economic picture remains something of a wild card, we expect a modest uptick in total deal value and the number of deals this year," Morningstar concluded.

-- Written by Antoine Gara in New York

Follow @AntoineGara

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