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M and A #investments

Mergers and acquisitions can send stock prices soaring higher and acquisitions are more likely when prices are low; mergers too are more likely when times are tough. The FTSE 100 dropped from a high of over 7,000 to below 6,000 and so many companies have been looking at M & A.

RSA

RSA insurance had an approach from Zurich, it fell through but it gave an indication of the real value of RSA and it still looks cheap. The share price has been slowly climbing since it fell back on the news that Zurich wouldn’t go ahead.

Tesco

Tesco dominates the supermarket sector and I’m surprised they haven’t either been the target of an acquisition or trying to leverage  an acquisition. I thought Morrison’s would be the most likely target in the sector, but they seem to be having fewer problems than Tesco or Asda’s parent Walmart.  I’ve also been wondering about Premier Foods which have been the subject of some speculation by analysts and brokers in the US. Their share price seems very cheap still but could soar if Christmas sales take off with the new advertising campaigns.

Cable and Wireless

Cable and Wireless issued an RNS yesterday to confirm an approach and the stock soared about 8%. It’s up another 9% today and I’m wondering whether this will fall through like RSA did. The approach by Liberty Global seems serious and so I’ll simply hold for now and watch and wait.

Monitise

I buy the stock that I think is undervalued and I think Monitise is really cheap now especially as they have just found another new partner in Telefónica Digital. Young people hardly take their eyes off their cell phones, but older people haven’t embraced the mobile technology quite so much. Older people have more money, so they need to simplify apps to make them more appealing to the older user. As the young increase their earnings, they will embrace these cloud-based apps to manage their finances and so the technology does have a future.

The economy

The economy is being stifled with a lack of liquidity, but it keeps inflation down and the pound high against major currencies. Returns on overseas investments are high and imports are cheaper. Cheaper goods from overseas are favouring some retailers, but killing our steel industry. It is making it very hard to export too. Against this backdrop, we have to try to find investments that will give a return.

That’s it for this week. Remember to do your own research before investing and don’t take anything I say as advice! You can follow this blog and my thinking on numerous subjects by entering your email address in the space provided at the top of the sidebar or you can follow me on Twitter for updates.

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