At Extreme Investor Network, we are always on the lookout for opportunities that can benefit our readers and help them make sound investment decisions. In light of President-elect Donald Trump’s White House victory, there is speculation that merger and acquisition (M&A) activity may see a boost. This could potentially impact various small-cap stocks, making them attractive targets for acquisition.
Following Trump’s win, small-cap stocks have already shown significant gains. The Russell 2000 moved nearly 6% higher the day after the election. This surge is part of a broader post-election rally that has seen all three major averages hitting fresh records. With the Republicans likely to control the White House, Senate, and House, there is a possibility of increased M&A activity in the near future.
Bank of America analysts believe that sectors such as health care, tech, staples, and utilities could be key beneficiaries of a potential M&A revival. In response to this speculation, Bank of America screened the Russell 2000 for potential M&A targets. They looked for stocks with more than 90% of their shares available for trading, three years of positive operating cash flow and sales growth, trading at a discount relative to their industry, and having low debt relative to earnings before interest and taxes.
Some of the stocks that made the Bank of America list include Bread Financial Holdings, Halozyme Therapeutics, and Commercial Metals Company. Bread Financial Holdings has seen significant growth this year, with a float of 98% of shares outstanding and three-year sales growth of 28%. Halozyme Therapeutics, a biopharmaceutical company, has a float of 99% and three-year sales growth of 105%. Commercial Metals Company, a steelmaker based in Irving, Texas, has seen a 19% rise year-to-date.
These potential M&A targets offer investors an opportunity to capitalize on the current market trend and potentially benefit from any acquisition activities in the coming months. At Extreme Investor Network, we aim to provide our readers with valuable insights and opportunities to help them navigate the dynamic world of investing. Stay tuned for more updates and analysis on potential investment opportunities in the ever-changing market landscape.