It happens every year, and 2018 won’t be any different. Larger companies looking to add to growth, beyond that of the organic or internal variety, scan the field for purchases and acquisitions that are easy to bolt on and could add returns in a timely fashion. This year the process may even speed up some as the market sell-off that happened last month already may have put some companies in the sights of acquirers.
In what is a yearly and very all-encompassing report, the analysts at RBC again go through every sector looking for possible buyout candidates. Last year the company’s takeover screens yielded 20 that were eventually acquired over the following 12 months.
One screen that should be of interest to many investors is the potential takeout candidates in the health care sector. With an aging population, and larger companies looking to add new technologies and capabilities, the chances for mergers and acquisitions activity to jump are for real.
We cross-referenced the RBC potential takeout candidates looking for the highest profile names and found four that like sold choices.
This company may be a very solid fit for a big devices player, and it was also on last year’s list. Haemonetics Corp. (NYSE: HAE) is a health care company that provides products for processing, handling and analysis of blood. The company operates through five segments: North America Plasma; America’s Blood Center and Hospital; Europe, Middle East and Africa; Asia Pacific; and Japan.
Haemonetics offers plasma collection and storage products, including PCS brand plasma collection equipment and disposables, plasma collection containers and intravenous solutions, as well as information technology platforms for plasma customers to manage their donors, operations and supply chain.
The Wall Street consensus price target for the shares is $64.75. The stock was trading Thursday at $74.80, in 52-week trading range of $38.43 to $75.36.
This one also made the RBC list last year and remains a solid candidate. Luminex Corp. (NASDAQ: LMNX) is transforming global health care and life science research through the development, manufacturing and marketing of proprietary instruments and assays utilizing xMAP open-architecture multi-analyte platform, MultiCode real-time polymerase chain reaction (PCR) and multiplex PCR-based technologies that deliver cost-effective rapid results to clinicians and researchers.
Luminex’s technology is commercially available worldwide and in use in leading clinical laboratories, as well as major pharmaceutical, diagnostic, biotechnology and life science companies. Luminex is meeting the needs of customers in markets as diverse as clinical diagnostics, pharmaceutical drug discovery, biomedical research including genomic and proteomic research, personalized medicine, biodefense research and food safety.
The posted consensus price target is $21.17. Shares traded Thursday morning at $21.40, in a 52-week range of $17.70 to $22.42.
This company has been on its own mergers and acquisitions binge over the past three years, and its stock was hit hard in 2017. Mallinckrodt PLC (NYSE: MNK) is a global specialty biopharmaceutical and medical imaging business that develops, manufactures, markets and distributes specialty pharmaceutical products and medical imaging agents.
The company’s areas of focus include therapeutic drugs for autoimmune and rare disease specialty areas, like neurology, rheumatology, nephrology and pulmonology, as well as neonatal critical care respiratory therapies and analgesics and central nervous system drugs.
The consensus price target is set at $27.83. The stock was last seen at $16.05. Its 52-week range is $15.27 to $49.29.
This has been a popular name when it comes to potential merger or takeover chatter for years, and it made the RBC list the past two years. NuVasive Inc. (NASDAQ: NUVA) is a world leader in minimally invasive, procedurally integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes.
The company’s highly differentiated, procedurally integrated solutions include access instruments, implantable hardware and software systems for surgical planning and reconciliation technology that centers on achieving the global alignment of the spine. NuVasive has an approximately 2,300-person workforce in more than 40 countries around the world.
The consensus price objective is $62.78, with shares trading at $50.90, in a 52-week range of $44.62 to $81.68.
While there is absolutely no guarantee that these companies are acquired, they all are outstanding stocks to own in aggressive growth portfolios on their own. The takeout factor just gives them another reason to be considered.