This Day On The Street
Continue to site
ADVERTISEMENT
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

4 M&A Deal Stocks to Watch in June

BALTIMORE ( Stockpickr) -- "More money, more problems" isn't just a truism for rappers from the 1990s -- it's also a major issue that's plaguing corporate treasury departments right now.

As I write, U.S. companies are sitting on record holdings of cold, hard cash. How much? Just as the calendar's about to kick over to June, more that 20% of the S&P 500's value is paid for in cash. That's an absolutely massive cash balance. And it's creating a problem for firms because it's almost impossible to earn meaningful returns in the near-zero rate market we're stuck in.

>>5 Stocks Insiders Love Right Now

On the one hand, companies don't want to part with their huge cash balances; many are still shell-shocked by liquidity crunches from the financial crisis, and want to avoid a similar scenario. But on the other hand, firms are failing shareholders if they can't earn market-beating returns on their cash and refuse to return it in the form of dividends, buybacks, or debt reductions.

That's why mergers and acquisitions are heating up this month.

>>5 Big Stocks to Sell Now

In markets where fundamentals are being discounted, mergers and acquisitions (better known as M&A) can provide amazing value for purchasing firms' balance sheets -- and they can provide instant gratification for shareholders in the target firm. Too often, investors think that there's no money to be made once a deal has been announced, but that's just plain wrong; between merger arbitrage opportunities and value creation for acquiring firms, it's worth paying attention to Wall Street's deal book.

And now, with M&A deals coming off decade-long lows, deal volume is starting to spike again.

With that, let's take a look at four M&A deal stocks worth watching right now.

>>5 Defensive Stocks to Protect Your Portfolio Gains

Life Technologies

In mid-April, life sciences firm Life Technologies ( LIFE) announced that it had struck a deal to be acquired by larger firm Thermo Fisher Scientific ( TMO) in a $15.9 billion cash deal that would net LIFE shareholders $76 per share. A month and a half later, Life is still trading for a $1.59 discount to the deal value; that's a 2.14% risk premium left in shares right now for merger arbitrageurs.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CLWR $0.00 0.00%
HCBK $9.63 0.21%
LIFE $76.04 -0.04%
MTB $123.16 -0.36%
YHOO $43.48 -0.44%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs