MORGAN STANLEY: These 15 companies are the most likely to get bought this year

  • Companies targeted in mergers-and-acquisitions deals usually see their stock price increase, creating money-making opportunities for investors able to identify them.
  • Morgan Stanley has singled out 15 companies that meet its proprietary criteria as high-likelihood acquisition targets.

Wall Street expects mergers-and-acquisitions activity to accelerate in 2018, which should create opportunities for investors looking to profit from accompanying stock spikes.

After all, when an acquisition offer is made, the company being bought usually sees its share price increase. So the process is simple – identify potential acquisition targets, buy them, and hope a deal gets announced.

Easier said than done. But lucky for you, Morgan Stanley is here to make things a little easier.

The firm has developed a model that sorts stocks by acquisition likelihood. The methodology involves calculating the probability that a company will be on the receiving end of at least one tender offer. And in figuring out its list, Morgan Stanley weighs a combination of cohort information and stock-specific fundamentals.

Without further ado, here are 15 stocks that the firm says are among the most likely to receive an acquisition offer sometime in the next 12 months.

(Note that Morgan Stanley has screened its universe of companies to include only large and liquid stocks and that all company statistics are as of year-end 2017. The firm’s list has also been culled so it doesn’t include more than two companies from the same sector.)


Domino’s Pizza

Ticker: DPZ

Industry: Consumer discretionary

Year-to-date trading volume: $US44.5 billion

Market cap: $US8.3 billion


Six Flags Entertainment

Ticker: SIX

Industry: Consumer discretionary

Year-to-date trading volume: $US15.9 billion

Market cap: $US5.6 billion


Pinnacle Foods

Ticker: PF

Industry: Consumer staples

Year-to-date trading volume: $US17.5 billion

Market cap: $US7.1 billion


Herbalife

Ticker: HLF

Industry: Consumer staples

Year-to-date trading volume: $US19.4 billion

Market cap: $US6.0 billion


Transocean

Ticker: RIG

Industry: Energy

Year-to-date trading volume: $US35.9 billion

Market cap: $US4.2 billion


Weatherford International

Ticker: WFT

Industry: Energy

Year-to-date trading volume: $US25.6 billion

Market cap: $US4.1 billion


Navient

Ticker: NAVI

Industry: Financials

Year-to-date trading volume: $US10.7 billion

Market cap: $US3.5 billion


Allergan

Ticker: AGN

Industry: Healthcare

Year-to-date trading volume: $US157.6 billion

Market cap: $US54.4 billion


Express Scripts

Ticker: ESRX

Industry: Healthcare

Year-to-date trading volume: $US66.2 billion

Market cap: $US42.3 billion


Conduent

Ticker: CNDT

Industry: Information technology

Year-to-date trading volume: $US10.2 billion

Market cap: $US3.4 billion


FireEye

Ticker: FEYE

Industry: Information technology

Year-to-date trading volume: $US18.4 billion

Market cap: $US2.6 billion


Graphic Packaging

Ticker: GPK

Industry: Materials

Year-to-date trading volume: $US13 billion

Market cap: $US4.8 billion


W.R. Grace

Ticker: GRA

Industry: Materials

Year-to-date trading volume: $US10.5 billion

Market cap: $US4.8 billion


Taubman Centres

Ticker: TCO

Industry: Real estate

Year-to-date trading volume: $US9.8 billion

Market cap: $US4 billion


Spirit Realty Capital

Ticker: SRC

Industry: Real estate

Year-to-date trading volume: $US20.8 billion

Market cap: $US3.9 billion


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