On any given day, it’s not uncommon to find a handful of stocks racing ahead 30%, 40%, or more. Of course, you might expect that when Mr. Market is in a good mood and most stocks are in the green. But even when the Dow and S&P are falling, a group is usually bucking the trend and making powerful ascents.

Up market, down market, sideways market… It doesn’t matter. There are almost always a few big movers and shakers.

Take Shaw Communications (NYSE: SJR), a normally sleepy Canadian telecom stock. About a year ago, investors went to bed with their shares having closed at $19. The following morning, they awoke to find the stock had spiked to nearly $28.

That’s a powerful upward jolt of 50% in a single day — from a stock that had gone nowhere in prior years.

Lightning struck again shortly after, this time with Nuance Communications (Nasdaq: NUAN). Shares of the artificial intelligence software provider had been limping along in the mid-$40s. Then wham! Out of nowhere, they surged as high as $54 one afternoon. That 20% jolt increased the net worth of NUAN shareholders by roughly $2.5 billion.

And it happened without warning, occurring not over a period of weeks or months, but in a matter of hours.

What could trigger these sudden upward spikes? Just about anything, really. A sharp dividend increase, a long-awaited FDA product approval, a plum government contract… But most often, the stock is responding to a buyout offer.

A solid quarterly earnings report might earn some polite applause from the market. But that’s nothing compared to the thunderous standing ovation accompanying a proposed takeover. These deals can compress several good years’ worth of gains into the span of a single trading session.

I’ve Spotted These Deals Before…

Shares of Electro Scientific Industries (former ticker ESIO) rocketed 97.1% overnight after the equipment maker got scooped up in a $1 billion deal. Intersections, a maker of identity theft software (former ticker INTX), gained 104.6% when a suitor came knocking.

These are by no means isolated examples. Barely a week goes by without a takeover announcement. Just follow the gains, and you’ll find it. But to really pay off, you want to spot potential takeover targets ahead of the crowd. And therein lies the problem. It’s practically impossible to know where and when these deals will strike. Or is it?

I’ve spotted more than my fair share of these deals over the years — and on both sides. And while mergers can certainly yield financial gains for the buyer, sellers are rewarded far quicker – within hours instead of months or years.

Case in point, a few years ago, I cashed out a healthy 125% profit on an aircraft leasing company called Aircastle. Much of that came in a single day in November. The company was approached by a Japanese buyer with a $2.4 billion check in hand. Before that, it was refiner CVR Energy. Before that, school bus operator Student Transportation. All netted outsized gains overnight.

Now, I want to be clear and tell you that I didn’t specifically single out any of these stocks just because I thought they’d get bought out. I recommended them solely because they were quality, cash-generating businesses trading at an attractive discount to their respective fair value. Acquirers value these same traits, which explains why we sometimes zero in on the same stock.

Like I always say, when it comes to predicting takeovers, I do not have a crystal ball. Think of me instead as a meteorologist… trained to spot wind shear and other telltale signs of an imminent tornado. Because a specific set of conditions often precedes a takeover announcement. You just have to know what to look for. And that’s why I launched my premium service, Takeover Trader, nearly three years ago.

We’ve had more than our fair share of success since then, including gains of 44%, 127%, even 321% — and more… But as impressive as those gains are, it could be just the beginning…

A “Feeding Frenzy” Of Deals (And The Hottest Sector)

I think this is just the beginning of a major tidal wave of deal-making activity. So get ready for more in the coming months. The macro stars are aligned… S&P 500 members alone (not counting the thousands outside the index) are estimated to have a $2 trillion cash hoard. So there is plenty of funding on the table. Not only will these giants have the means to swallow up smaller competitors, but also the motivation.

Executives are always under pressure to grow the bottom line, which isn’t easy in this environment. At least not organically. Expect to see many companies form strategic alliances, unlock synergies and grow profits the old-fashioned way – by buying them. In doing so, they might also skip over years of work spent turning a raw idea into a viable product or service. Even Warren Buffett concedes it’s much easier to buy a competitively advantaged business than to build one from scratch.

This almost always means a bonanza for investors in the right place at the right time.

Just a few days ago, I told readers about how one of our top gold-mining picks over at Takeover Trader was getting scooped up: Sabina Gold & Silver (TO: SBB).

But I think the hottest sector for takeovers will be in the oil patch… And the reason is simple: the U.S. Geological Society estimates that there are still 46 billion barrels of recoverable oil reserves and 281 trillion cubic feet of natural gas still waiting underground.

That not only makes the Permian the most fertile ground for future drilling activity – but also M&A deals – that we’re likely to see in our lifetimes…

Closing Thoughts

Remember, we’ve already closed out on multiple triple-digit winners since launching this service three years ago. But that’s nothing compared to what we’re about to see. So I encourage you to check out our latest report — because sometimes all it takes is the slightest whiff of a rumor to send a stock soaring, making it too late for investors who didn’t bite early.

In it, you’ll learn about one little-known Texas company that could uncork the “mother of all oil booms”…

We’re talking about nearly a billion barrels of oil… And in the coming days, it could unleash a surge of mega-profits for in-the-know investors.

Click here for the full details now.