Investing in Buyout Prospects

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After upping its offering
price, GlaxoSmithKline
(GSK) finally bought out
Human Genome Sciences
(HGSI).


The price was $3 Billion
plus or minus for the
hostile takeover turned
agreeable with the
sweetened pot.


The takeover brings to mind
the business of investing in
buyout prospects.


Human Genome Sciences
was trading for just over
$13.50 a share and gapped
up nearly 75 cents on the
news.


This always sounds
attractive when thinking of
investing in buyout
prospects.


However, take a look at the
last year or even last five
years of Human Genome
Sciences stock.


After all when investing in
buyout prospects the investor
needs to scout out
opportunities before they
happen and not read about
them in the stock market
news.

HGSI peaked at just over $32
in early 2010 and stayed in
that range for a year.

By late 2011 it was trading for
just over $7.50 a share.


It was in April 2012 that the
stock doubled from the $7
range to the $14 range of
news of a likely takeover by
GlaxoSmithKline.


For those interested in
investing in buyout prospects
the time to be in the stock was
then and not, especially, last
week when the announcement
of an agreement drove the
stock up another three
quarters of a dollar.

After all, the point of stock
investing is to make the best
profit reasonably available
from the market.


In general takeover stocks are
those that have a greater
potential value than is being
realized by current
management.


A prime example was the
Google purchase of
Motorola, or Motorola’s cell
phone arm, Motorola
Mobility, by Google.


Google needed Motorola’s
treasure trove of patents for its
patent wars with Microsoft and
Apple over Android.

Motorola was not making the
best monetary use of those
patents.

In fact outside investors had
argued this same fact when
purchasing Motorola stock and
promoting a breakup of the
company.


When a big takeover artist is
taking an interest in a company
it may be useful to follow along
when investing in buyout
prospects.


If you want to make money
investing in buyout prospects
you want to be in the stock a
short time before it pops up on
a takeover or takeover bid.


And, you do not want to be
holding onto a losing stock for
years only to find that no one
wants to take it over.


When you hear rumors of a
takeover it may be good to pay
attention.


However, the market commonly
reacts to such rumors and
drives stock prices up.


At that point it is wise to carry
out fundamental analysis of the
stock in question to decide if it
has hidden value that would
make it a buyout target.


And, if you missed the
opportunity to buy a stock
before the takeover, watch the
stock for the next days or
weeks.


The market may react
positively or negatively to the
buyout.


If the market decides that the
buyout was a bad move the
price of the buyer may fall.


For more insights and useful
information regarding
investments and investing, visit

www.ProfitableInvestingTips.com.

Investing in Buyout Prospects

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