How To Target “Big-Fish” Gains From M&A Deals…
Many of my readers know that I recently moved with my family to a nice little property by the river.
As an avid fisherman, it’s the ideal setup – moving from one fishing paradise to another.
If you like to fish, then you likely know of the recent breakthroughs in sonar electronics that have almost made the sport too easy. Our grandparents simply had to guess where the fish were hiding, often spending entire trips casting into areas devoid of life without getting a bite. Not anymore.
New tools like the Garmin Livescope provide real-time imagery of what’s beneath the boat, giving anglers a crystal-clear view of underwater ledges, standing timber, and other such structures where large schools of hungry bass and crappie often congregate. Why fish blind when electronics reveal exactly what’s on the bottom? The screen resolution is so crisp, you can see your own bait dangling at just the right depth.
Before you even drop a line in the water, these tools pinpoint the “honey holes” that are teeming with activity. Talk about eliminating the guesswork – it’s almost like cheating.
Here’s the thing: you can use the same approach to increase your chances of landing big investment gains.
How I’m Targeting Takeover Deals For Big Gains
Over at my premium service, Takeover Trader, we use a proprietary screening process (both qualitative and quantitative) to identify promising acquisition targets. Large fish like Microsoft and Amazon are always swallowing smaller competitors. And even the whisper of a potential buyout can trigger a sharp rally and have shares screaming higher overnight.
For example, back in the summer of 2020, the “stay at home” trend was all the rage. We added the streaming equipment company Roku (Nasdaq: ROKU) to our portfolio because it would be a winner of the “streaming wars” either way. Plus, the vast amount of data it collects from users would be an increasingly valuable asset to advertisers.
The stock was on fire that year, but as the “stay at home” trade started to fade in 2021, word broke that cable giant Comcast (Nasdaq: CMCSA) had the company in its sights – for many of the same reasons we liked it. This put new life into shares of ROKU – and while a deal has yet to materialize, we still walked away with a total gain of about 321%.
Here’s the point. Sticking with the fishing analogy, this is a vast ocean… and some spots are naturally more productive than others. That’s why I train most of my analytical resources in busy market sectors where dozens or even hundreds of merger and acquisition transactions occur each year. The more frenzied the feeding, the better your chances of hooking a few keepers.
When consolidation takes hold of an industry, it might not let go for years. The joining of two powerhouse companies alters the balance of power, forcing others to follow suit or get left behind.
Closing Thoughts
In some fields, M&A activity seems to be practically contagious. And for the past few weeks, I’ve been telling readers that I think we’re about to see a wave of takeover activity in the coming months. I outlined my reasoning here, also mentioning that I’ve got my eye on three key sectors.
And as I pointed out in this article, one of those sectors is technology. Of course, tech has always been a prime spot for M&A activity, but right now is especially timely… Many of the biggest tech firms are flush with cash and desperate for the next big growth catalyst.
What better way than to just buy it?
And with $66 billion in cash just sitting idle on the balance sheet, I think Amazon is about to pull off one of the biggest, most “shocking” deals we’ve ever seen…
If I’m right, not only will it will change the tech landscape forever – but it could also lead to massive profits for investors who get in before the rumor mill starts up. To get the details, go here now.