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  • The 5 Most Undervalued Takeover Targets 0 comments
    Nov 3, 2010 3:36 PM | about stocks: WL, EXEL, RBCN, PNCLQ, BBW
    The following is a list of undervalued takeover targets, when comparing the current price to the average analyst target price.

    To compile the list, we started with a list of 260 takeover targets identified by sources including CNBC, UBS, Merrill Lynch, Barrons, Morningstar, and Street Insider. We then narrowed down the list by only focusing on stocks that are trading at deep discounts to their analyst target price (used as a proxy for fair value).

    Yes, there are many limitations to this valuation approach, but the goal here is to give you a starting point for your own analysis.

    Target price data sourced from Finviz. Here's the complete list:

    1. Wilmington Trust Corporation (NYSE:WL): Regional Bank. Market cap of $376.23M. Dick Bove, a prominent banking analyst, identified the stock as a takeover target. Current price at $4.11 vs. target price at $9.86 (discount of -58.32%). Short float at 13.09%, which implies a short ratio of 4.21 days. The stock has lost -65.55% over the last year.

    2. Exelixis, Inc. (NASDAQ:EXEL): Biotechnology Industry. Market cap of $474.84M. Morningstar identified the stock as a takeover target. Current price at $4.37 vs. target price at $6.67 (discount of -34.48%). Short float at 6.64%, which implies a short ratio of 6.89 days. The stock has lost -31.18% over the last year.

    3. Rubicon Technology, Inc. (NASDAQ:RBCN): Semiconductor Industry. Market cap of $549.18M. UBS identified the stock as a takeover target. Current price at $23.94 vs. target price at $36.33 (discount of -34.1%). Short float at 78.64%, which implies a short ratio of 11.99 days. The stock has gained 69.91% over the last year.

    4. Pinnacle Airlines Corp. (PNCL): Regional Airlines Industry. Market cap of $105.66M. The StockPickr Takeover Portfolio identified the stock as a takeover target. Current price at $5.69 vs. target price at $8.63 (discount of -34.07%). Short float at 3.58%, which implies a short ratio of 9.09 days. The stock has lost -5.17% over the last year.

    5. Build-A-Bear Workshop Inc. (NYSE:BBW): Toy & Hobby Stores Industry. Market cap of $133.53M. The Wall Street Journal identified the stock as a takeover target. Current price at $6.63 vs. target price at $10.00 (discount of -33.7%). Short float at 11.3%, which implies a short ratio of 17.38 days. The stock has gained 27.99% over the last year.

    Interactive Chart: Press Play to see how analyst opinion has changed on all the stocks mentioned above.

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    Disclosure: No positions
    Stocks: WL, EXEL, RBCN, PNCLQ, BBW
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