CHICAGO, Jan. 18, 2012 /PRNewswire/ -- Morningstar,
Inc. (NASDAQ: MORN), a leading provider of independent investment
research, today published its merger and acquisition insights
report for 2012, "Economic Headwinds Shift Catalysts for Takeover
Activity." Morningstar's comprehensive research report includes
investment ideas among its list of potential takeover candidates,
M&A analysis by sector, credit implications of M&A
activity, and investing opportunities for option investors.
Bridget Freas, CFA, senior equity
analyst for Morningstar and co-editor of the report, said, "The
pace of mergers and acquisitions has slowed following robust
activity in the first half of 2011, but we still see ample
opportunity for deals in the coming year as buyers look to scoop up
businesses with stable growth prospects in an uncertain economic
environment. Equity values have rebounded in the last few months
across most sectors; however, we're starting to see a greater
disparity in stock prices. Industry consolidation and M&A as an
avenue to emerging markets are likely to be recurring themes. The
weakened credit markets pose a challenge, but there are still quite
a few cash-rich firms looking for bargains and the low valuations
in sectors such as basic materials, energy, and financial services
may be enticing."
Despite the rising hurdles for M&A deals, several of the
takeover targets Morningstar identified in the last 12 months have
already accepted acquisition offers. From Morningstar's 2011 list
of likely takeover candidates and acquirers, six companies—BJ's
Wholesale, Constellation Energy, Massey Energy, Petrohawk Energy,
Pride International, and Temple-Inland—have announced a deal, two
of which were also highlighted as top investment ideas. All six
companies saw stock price appreciation of at least 17 percent from
the time Morningstar named them to the potential takeover list to
the time they accepted takeover offers. Several potential acquirers
on the list also announced deals in 2011, including 3M,
AGCO, Broadcom, Danaher, Exelon, SAB Miller, United
Technologies, and VFC Corporation.
According to Morningstar, the top 20 investment ideas among
potential takeover candidates in 2012 are:
- Abiomed
- AeroVironment
- American Eagle
- Amerigroup
- Charles River
- Chico's FAS
- Cloud Peak Energy
- Collective Brands
- Dice Holdings
- Icon
- Leap Wireless
- Mosaic
- Myriad Genetics
- NASDAQ OMX Group
- NII Holdings
- Range Resources
- Riverbed Technology
- SandRidge Energy
- Transocean
- Ultra Petroleum
In the 2012 research report, Morningstar equity analysts
identified a total of 87 takeover targets across nine sectors:
basic materials, consumer, energy, financial services, healthcare,
industrials, technology/communication services, and utilities.
Potential takeover candidates for each sector were determined by
unique and proprietary scoring systems for each sector, based on
industry-specific drivers of merger and acquisition activity as
well as factors such as free cash flow, management, and capital
structure.
Morningstar then examined its list of potential takeover
candidates across all nine sectors to identify the 20 most
compelling stocks for 2012. Morningstar selected companies that are
the most attractively priced based on their price/fair value ratio
and ranking in their respective, sector-specific potential takeover
candidate list.
To view the executive summary of Morningstar's merger and
acquisition insights report for 2012, please visit:
http://global.morningstar.com/MandAInsights2012. The full report is
available to institutional investors through Morningstar Select,
the company's institutional equity research portal. For access,
institutional investors may contact
equityservices@morningstar.com.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent
investment research in North
America, Europe,
Australia, and Asia. The company offers an extensive line of
products and services for individuals, financial advisors, and
institutions. Morningstar provides data on approximately 330,000
investment offerings, including stocks, mutual funds, and similar
vehicles, along with real-time global market data on more than 5
million equities, indexes, futures, options, commodities, and
precious metals, in addition to foreign exchange and Treasury
markets. Morningstar also offers investment management services
through its registered investment advisor subsidiaries and has more
than $167 billion in assets under
advisement and management as of Sept. 30,
2011. The company has operations in 26 countries.
©2012 Morningstar, Inc. All Rights Reserved.
MORN-R
Media Contact:
Nadine Youssef, 312-696-6601 or
nadine.youssef@morningstar.com
SOURCE Morningstar, Inc.