However, as I wrote yesterday, the probability of receiving over $140 a share drops exponentially as the hoped-for target price is raised. Using 2014 earnings estimates of 60 cents a share, the valuation is over 230 times earnings. Looking forward even further to 2015 with estimated earnings of $1.50 per share, the valuation is still over 90.

After removing cost savings but adding in acquisition costs, I can't say Onyx won't receive a bid over $160, but it does appear the buyer(s) may wish they didn't pay such a high premium.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at paid2trade.com on a regular basis with an emphasis on studying behavior finance.


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