3 Stocks to Buy That are Potential Takeover Targets

As the stock market moves higher, risk appetites are expanding among investors and businesses. This means there are greater chances of large acquisitions…

This means that investors have another factor to consider when looking at companies. Companies can be acquired for large premiums and deliver big gains to investors in these companies.
The challenge lies in identifying companies that are legitimate takeover candidates. Below, we highlight three such companies: Monster Beverage (MNST), Peloton Interactive (PTON), and Barnes & Noble (BNED).

Monster Beverage (MNST – Get Rating)Coca-Cola currently has around a 20% equity stake in MNST yet there are rumblings that Coca-Cola will purchase the entirety of MNST. Even if the executives at Coke don’t pull the trigger on a MNST deal, another food and beverage behemoth will consider doing so as MNST continues to expand its market share.

MNST is a seemingly unstoppable behemoth. Though the market certainly has a litany of competing energy drinks, many of which taste just as good as those offered by MNST, the consumers favor MNST’s offerings. In particular, millennials and those in the Generation Z age cohort are in love with MNST beverages.

Some analysts insist the Coca-Cola’s gradual investment in MNST is similar to the approach used to acquire Innocent Drinks back in 2013. That deal commenced with an 18% stake in Innocent that eventually progressed to 100% full ownership.

The POWR Ratings system is quite complimentary of MNST, grading it with As in the Trade Grade and Buy & Hold Grade Components along with B grades in the remaining categories. MNST is ranked second of nearly 30 publicly traded companies in the Beverages category.

The analysts have set a price target of $85.09 for MNST, indicating the stock is slightly underpriced. However, if rumors swirl of MNST being acquired, the stock should easily shoot through the $100 level. Even if MNST is not acquired, you should feel perfectly fine holding this elite beverage-maker in your portfolio.

Peloton Interactive (PTON – Get Rating)

There is a renewed focus on fitness now that the average person has packed on 10+ pounds as a result of an extended quarantine. Furthermore, the closure of gyms far and wide has limited opportunities for exercise. Though some gyms have reopened, many are only partially open. This means there is plenty of interest in fitness industry winners such as PTON.

PTON’s primary competitor, Mirror, was acquired three months ago. Though PTON’s exercise equipment is certainly expensive, it is selling like hotcakes. The power brokers in the fitness industry have been paying close attention to PTON’s sales success. Though…

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