- two potential takeover targets that are worth a bet; and
- why secondary offerings have become the new IPOs
Lively Action for Two Takeover Targets Posted at 3:10 p.m. EDT on Friday, March 30. I don't like to traffic in takeover names. Far too often they end up being spoilsports that really hammer you, and you end up losing far more than you have ever gained if you finally hit. Who knows how much has been lost betting with Sprint Nextel ( S), or Eastman Kodak or Radio Shack ( RSH) or Research In Motion ( RIMM) for that matter? A lot more than you've made, I am most certain. Occasionally, though, you get a stock that's up big on what looks like takeover action that won't kill you if you don't catch a bid. And then, on very rare occasions, you get not one but two potential targets that are worth buying even without a takeover bid. Today is one of those days. Both Core Laboratories ( CLB) and Pioneer Natural Resources ( PXD) are up huge today. Until this year's bizarre trading decoupling between stocks and the commodities in the oil patch, we've seen a whole host of mergers that have been terrific for all involved. > > Bull or Bear? Vote in Our Poll We've seen huge deals in both the service side and in the independent oil side. Maybe it's heating up again. Core Labs is a technology stock that happens to be in the oil business. It tells you how much oil is in the ground before you go wasting millions of dollars. Pioneer Natural is a terrific oil and gas company that I have loved for some time because of its earnings prospects and tremendous growth -- about 75% as of earlier in the year. Core is about $6 billion, Pioneer about $13 billon. Considering that finding oil is more lucrative than ever and that natural gas, a big part of Pioneer's portfolio, is a necessary export item for many a foreign national firm, both Core and Pioneer work as buys, despite these large run-ups.
Secondaries Are the New IPOs Posted at 12:50 p.m. EDT on Friday, March 30. The heck with IPOs as a way to judge a market. Secondaries tell a much better story. Why would you ever put in for stock in a secondary unless it was deeply in the hole, meaning that it came at a substantial discount to where a stock was trading ahead of the deal? But we got two deals this week that showed the true power of this market: 25 million shares from Dollar General ( DG) shareholders, priced at $45.20 and 26 million Dunkin Brands ( DNKN) shares at $29.50. Neither stock was sold at much of a discount to the last day's trading. Both stocks immediately went to a premium, meaning that you made money on both deals instantly. That's a sign of true health. More importantly in the case of Dunkin Brands, a whole slew of officers and directors bought stock in huge amounts, not just token-size takes. The shares buys were some of the most aggressive I have seen in some time. While the sellers might have been the private equity guys ringing the register on a phenomenal deal, the buyers were people who aren't going anywhere and can't do any selling for at least six months as per insider trading laws.