10. Don't Just Stand There. Do Something.Final theme? I am calling it the "Don't just stand there, do something" theme. I am seeing the companies that buy other companies, and the companies that split themselves up into separately traded parts, really bring out a lot of value. When PVH ( PVH) bought Warnaco to create a Calvin Klein house of brands, shares vaulted much higher and never came back. After Hormel's ( HRL) deal to pick up Skippy, the stock immediately gained altitude and didn't surrender it. ConAgra's ( CAG) deal to buy Ralcorp ( RAH), and Eaton's ( ETN) purchase of Cooper? These were all tremendous moves. As were the break-ups of MeadWestvaco ( MWV), Abbott ( ABT), Marathon Oil ( MRO), ConocoPhillips ( COP) and Kraft ( KFT). All of these deals brought instant valuation hikes. They are a reminder that when companies sit there and wait for things to get better, they miss the best opportunities. I believe we are at the infancy of a new merger wave because of all of the cash on the balance sheets -- as well as a new break-up wave, because so much value has been created from those that have already done so. This is a market desperate for conviction -- desperate to find stocks that can be bought on weakness without worry about Washington. But when that weakness comes, more people leave stocks than return to them. I hope this list helps to remind you what worked in 2012 under those circumstances, and which I believe could work again in 2013.
Looking for more 2013 investment outlooks? Don't miss Jim Cramer's 10 M&A predictions for 2013 and Doug Kass's 15 surprises for 2013.