BALTIMORE (Stockpickr) -- U.S. companies are facing a cash crisis in 2014. It's not because they need cash, though. The problem is that firms currently have too much of it.
As I write, firms in the S&P 500 currently hold more than $1.25 trillion on their balance sheets, the most in history. Add it all up, and those cash holdings are enough to pay for a whopping 20% of the S&P's current price tag. That may seem like a good problem to have -- and it is -- but it's still a problem because its almost impossible to earn meaningful returns in the near-zero rate market were stuck in.
So as management teams come to the realization that they need to either put money to work or hand it back to investors, acquisitions are looking a whole lot more appealing again. 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 theres no money to be made once a deal has been announced, but thats just plain wrong; between merger arbitrage opportunities and value creation for acquiring firms, its worth paying attention to Wall Streets deal book. With the S&P squarely in correction mode this month, we're stating to see bigger premiums up for grabs in the market.
And now, with M&A deals coming off decade-long lows, deal volume is starting to spike again.
With that, lets take a look at four M&A deal stocks worth watching right now.