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Thread: Large Returns

  1. #1

    Default Large Returns

    Hi guys. When i was a bit younger, I vividly remember really big takeovers that increased share prices dramatically. I had then thought that if I could buy into companies pre-takeover and then sell after takeover, I would make huge returns.

    Is this kind of short termed trading viable? And does anyone do this?

  2. #2

    Default Re: Large Returns

    Yeah mate thats what its all about let us know when you hear something

  3. #3

    Default Re: Large Returns


    He's shouting the whole forum tonight.


  4. #4

    Default Re: Large Returns

    I don't think you can sell after take-over as such, shareholders normally get either bought out at a set price, or given shares in the company that is taking over. Well, I've assumed that was the case anyhow

    As for buying in to companies that are going to be taken over, unless you are doing a little bit of insider trading it might be hard to pinpoint which stock is likely to be taken over. Some are more likely, but its pretty hard to just know straight up, and it seems like a bit of a gamble if that's your main strategy for returns.

    Also if a takeover fails, doesn't that normally ravage the SP?

  5. #5

    Default Re: Large Returns

    Like most things there is a time and place... i.e. with real estate you buy the physical and do the work to improve it in an improving economy... or you "trade up" in a good economy so you can buy into the next underpriced location, or in a overheated market you slap a permitted DA [Approved Development Application] on it and to use an americanism you "flip it" [basically means you do the paperwork but not the physical].

    The same can be said of the stockmarket when there is a time to buy companies on the basis they have the cash and are looking for expansion. However IMHO that would take considerable time and expertise to be able to spot.

    As an example BHP has the cash and has been trying to buy a company with the view of using its prowress of adding value or market domination but hasn't succeeded.

    But IMHO there are companies out there at this very moment looking for acquisitions so if you come across them you can post here to let us all know.


  6. #6

    Default Re: Large Returns

    Perfectly reasonable Fundamental Analysis approach to look for potential take-over targets.

    Go learn the traits takover targets tend to show, and the sectors that are in-play from a M&A point of view, and then pick your targets.

    Random suggestion: grab a free trial to http://underthesoutherncross.com.au/ and rummage through the vast number of back-issues. See what this mob look for in possible take-over targets. Go back a long way so you can see how their suggestions turned out.

    Best bet, IMO, is to buy something that fits what you're aiming at (12-month growth potential, dividends, TA trigger, or whatever) - but try to find those opportunities in the "potential take-over" basket.

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