Is investing in stocks that you think will be acquired a possible strategy?

Just curious if there are any articles about this. I was researching a stock, and noticed that company A typically did license agreements with other companies, but after a few years of licensing, they tend to buy the companies. What are some other "signals"? Have you seen any correlation between top executives of company A being on the board of potential acquisitions for a few years?

In the 10ks, I have seen a mention of $X being set aside for capex for the year, so is it best to research companies that they have previously worked with (not necessarily competition, but the equipment manufacturers, suppliers or outsourced solutions), or better to look at direct smaller competitors?

 

I think more often than not, you'll be wasting your time investing in companies that you THINK will get taken over. Even if you think it strategically makes sense for ABC to acquire XYZ, management knows a lot more than you and you can't possibly know their motives (well, you could...).

Now, if you find a cheap company that makes strategic sense for being acquired, you could just add "being acquired" as one of the upside outcomes. However, I still think it would be tough to make that argument.

 

Core trade value tickers. That way while your waiting for someone else with money to notice that ticker, you can earn some coin while you wait. Ps. It's okay to short value too, you don't have to just play the upside game.

 

Quia error illo ut quia amet quidem. Aut impedit omnis et atque. Repellendus quam eaque nobis non. Nemo vel ad ex in rem. Magni ut ex impedit fugiat quam cumque eos.

Delectus dignissimos dolorem occaecati voluptate voluptas rerum laudantium. Voluptatem dolores voluptatem excepturi sapiente. Est pariatur impedit deleniti sit.

Career Advancement Opportunities

June 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Perella Weinberg Partners New 98.9%
  • Lazard Freres 01 98.3%
  • Harris Williams & Co. 24 97.7%
  • Goldman Sachs 16 97.1%

Overall Employee Satisfaction

June 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.9%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 05 97.7%
  • Moelis & Company 01 97.1%

Professional Growth Opportunities

June 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.9%
  • Perella Weinberg Partners 18 98.3%
  • Goldman Sachs 16 97.7%
  • Moelis & Company 05 97.1%

Total Avg Compensation

June 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (21) $373
  • Associates (92) $259
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (68) $168
  • 1st Year Analyst (206) $159
  • Intern/Summer Analyst (149) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”