NEW YORK ( Real Money) -- Nothing like buying a company in your industry that allows you to take out a competitor and immediately raise numbers.
Every time this happens -- literally, every time -- a big bump comes from the acquirer, not just the target, and the bump is only day-one of what can turn into a multiquarter move. That's why I think you can actually buy Actavis (ACT) at some point today because of its purchase of Forest Labs (FRX). It's also why I keep saying that the market is undervaluing so many companies -- you just don't see it until other companies take advantage of them.
I come from an era where the acquiring stock almost always goes down or sits there forever as people try to figure out why the deal makes sense. I come from an era that says that when a company buys another company, it is usually out of desperation.
That's why the acquirer has historically gone down. But this deal -- like so many that have occurred in the airline, rental car, media and telecommunications/cable sectors -- is immediately wildly accretive and makes so much sense that you can only ask what took so long.
Sure, Comcast (CMCSA) didn't' go up last week with its acquisition of Time Warner Cable (TWC), but the stock had been on a tear and Comcast is issuing a huge amount of stock to get it done. I think the combined company is a huge buy, however.