Strategies & Market Trends
Speculating in Takeover Targets
An SI Board Since December 2001
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4697 95 0 MNTX
Emcee:  richardred Type:  Unmoderated
One area investors might consider in balancing a portfolio with risk options, is one of my personal favorites, takeover targets. For new and old investors who are unaware of what's involved. I will try and go over some areas you can go over, to see if this might be a viable option for you.

First off, I would like to discuss why. Why, is very simple. It can be a quick way to make a good return in a short time frame when successful. I would like to stress the word successful. From my own personal experience most takeover picks need time factored in to be realized. Why, if someone was to ask me? Why, is because of many reasons. Why is the company a target in the first place? If you can answer that question, IMO your on the right path.

Next is your reasoning in your pick. 1. Are their rumors on the street, or has a bid been made. Chances are if the street knows about it , it's to late for you, without high risk. This area is usually handled by risk arbitrage players. They have capital to invest in this risky area. Many times after a bid is made, they jump in. Speculating to make a profit on a higher bid, or price difference till the close of the deal. A quick return for high risk, the payoff.

This is good for them, but what about you? Don't worry about them. You can try and achieve the same on a much safer degree of risk. There is a price to pay for safer. I will try and go over some strategy, and some of the things I look for. Earlier, I mentioned a time factor is needed for results to realized. This is not a bad thing,since you are picking before there are rumors on the street. This makes time on your side. With time involved, chances are the stock price will improve just on fundamentals alone, (Sales growth, earnings growth. Many times this will be at a higher stock price than a quick take out price.

The first words you hear mentioned by (especially newer investors is)(I've been guilty to). The low price of this stock makes this a takeover. How many times has this happened when we thought we made a good pick, but something didn't go as we planned. This shouldn't IMO-be the reasoning.

Your Reasoning-Your reasoning in making your choices should be determined by the amount of capital you have available for risk,and the time you can leave it available for risk. Having said what I've said, lets go over targeting areas if you have made a decision this is a viable investing option for you.

The choices-(homework time)-Say to yourself, if you were a big company with money available what would you buy? The last statement already has a clue (money available). This leads to more questions. Many big companies have capital available to acquire other companies. Many have sold divisions that didn't fit in its current business plans. They want to add to existing businesses-(another clue). If your the acquiring company, are you trying to gain market share, or are you trying to improve margins by eliminating a competitor? Another question-How much is it going to cost me? Is the company I want to buy selling below book value relative to it's current market valuation? Am I going to be taking on goodwill, or are my earnings going to be added to? There are still many many more questions you as an acquirer can ask yourself. The better you are at putting yourself in their place the better off you will be in your picks.

I have only touched on some areas of homework. The more time you put in, the better off you will be. Sometimes you nail one you didn't even expect, and sometimes that one you expected, never gets realized (that's part of investing).

I will leave this thread open for discussion for areas I haven't touched on, questions that have arisen, or new SITT picks for review by others. My picks, are subject to change without notice. I want to include my favorite caveat. "LISTEN TO WHAT EVERYBODY HAS TO SAY, BUT DO WHAT YOU THINK IS RIGHT YOURSELF". I always like discussing picks of others and your strategy.

Good Investing to All!



New rankings and Several Repeats.

  1. INCR
  2. CTG
  3. TDC
  4. VSH
  5. IXYS
  6. MNTX
  7. HBIO
  8. ANIK
  9. SYKE
  10. JVA
TOP TEN TAKEOUT SITT LIST FOR 2018 & brief thoughts- several repeats

The market is done trading for 2017.

1. ASTE- Infrastructure - Forget Congressional debate for now,remember the hurricanes. IMO Deere & Cat among many shoppers.

2. CTG- Message 31367340

3. MNTX- Message 31104927

4. ASV- Hypothetical Hunters- CAT-Kubota

5. BGS- A food biggie looking for medium scale- merger of = with Pinnacle Foods for scale?

6. ANIK-
IMO a gem CINGAL® waiting for FDA US approval.

7. SABR- IMO a private equity target-

8. LYBC- Micro cap regional bank-became a holding company-IMO perfect fit for CNND

9. MCF- Southern Delaware Basin at a discount with oil > 55. Needs a neighbor buyout to drill it's property.

10. MITK- Wild pick-needs a parent with deep pockets to scale and grow at a faster pace. IMO a platform for Paypal-PYPL

P.S. I currently own all 2018 selections through common stock or call options. My Stock Sales Subject to change without notice. If Anyone is buying anything based from this list. Do your DD or you might be pee peeing & poo pooing.
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4697The Nestles sale looks to be at the high end of expectations. IMO there must havrichardred-Wednesday
4696New Buy today. A re-entry of ENZ Enzo Biochem as it travels towards a 52 week lrichardred-Wednesday
4695Hershey and Ferrero compete for Nestle's US candy business Nestle's sarichardred-Tuesday
4694As Qualcomm board finds it's unsolicited Boadcom bid underscores it's varichardred-Tuesday
4693Fiat Chrysler CEO says no plans to sell brands to Chinese. reuters.comrichardred-Tuesday
4692Bought back into CPB to day. It's a warm day today, but a foot of snow or mrichardred-last Friday
4691Re-positioning and re- balancing portfolio. Realizing today, unrealized profitsrichardred-last Friday
4690First new buy of the new year, an add to B&G foods BGS foods on today's richardred-January 8
4689 Skyline and Champion Home Builders Announce Agreement on Business richardred1January 5
4688RE-MITK speculation. This years TT SITT wild speculation pick . Maybe not so wirichardred1January 3
4687Thanks Bob. FWIW A little speculative kicker on ASTE- at face value on this yearichardred-January 2
4686Hi Rick, Thanks for last years posts and ideas. I think even more importantly robert b furman-January 1
4685HAPPY NEW YEARS TO ALL IN 2018 2017 SITT year in review. 5 hits the year. DSCrichardred-12/31/2017
4684Apple finally got its tax break to bring billions home. Your move Apple... Brichardred-12/30/2017
4683Apple's top 10 acquisitions, as it acquires Shazam for a whopping $400M Rohirichardred-12/30/2017
4682CEOs go M&A hunting as booming markets unleash dealmaking spirits richardred-12/30/2017
4681The year of the deal in Pa.? After a busy 2017, mergers and acquisitions unlikelrichardred-12/30/2017
4680The Year in Acquisitions: 22 Austin Startups That Were Acquired in 2017 Venturrichardred-12/30/2017
4679RE-SABR speculation Dec 07, 2017 1:00 pm Expedia has been talking for a couple richardred-12/30/2017
4678TOP TEN TAKEOUT SITT LIST FOR 2018 & brief thoughts- several repeats The marichardred-12/29/2017
4677And this: In corporate news, Amplify Snack Brands (BETR 12.01, +5.01), which maThe Ox-12/18/2017
4676 [graphic]The Ox-12/18/2017 Campbell Soup to buy snacks maker Snyder's-Lance for $4.87 bilThe Ox-12/18/2017
4674YUMMY Chocolate and salty on a health food pretzel. Hershey's on a pretzelrobert b furman312/15/2017
4673The same to you Bob. I couldn't help myself , but post today. Ironically orichardred112/15/2017
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