Rogers on How to Profit from the Takeover Takeoff

Ariel Investments’ John W. Rogers Jr. says Corporate America’s appetite for takeover deals is creating big opportunities for investors.

Rogers, whose Ariel Fund is in the top 10% of funds in its class over the past year and the top 12% over the past ten years, writes in his latest Forbes article that “small investors are still shying away from U.S. stocks, but big corporate buyers can’t seem to get enough of them,” in the form of takeover deals.  While individual investors are yanking money from mutual funds, corporations are in the beginning of a “spending spree” that is part of a new Wall Street takeover wave, he says. And, he adds, the premiums on the deals are big.

The takeover wave is being spurred by high levels of cash on corporate balance sheets, and extremely low interest rates that allow companies to borrow money for dealmaking very cheaply, Rogers says. He offers three current picks that he says are good takeover targets, one from the financial sector and two from the healthcare sector.

Send a Comment

Your email address will not be published. Required fields are marked *