2 Strong Acquisition Candidates for Your Portfolio

Buying a stock just on the hopes of a turnaround is a risk investment. In the past, I have often advised investors to stay away from potential acquisition targets like FireEye (FEYE), Yelp (YELP) etc. However, in this article, I will focus on two companies that are most likely to get acquired in the near future.

However, as I have said before, since betting on a buyout is a risky scenario, investors should only allocate no more than 5% of their portfolio to these stocks.

Hain Celestial (HAIN)

The increasing consolidation in the snack food sector bodes well for Hain Celestial.
Hain’s rival WhiteWave Foods (WWAV) recently got acquired by Dannon for $12.5 billion. Dannon paid 34 times future earnings for WhiteWave foods, and going by this valuation, Hain Celestial is easily worth above $75.

The snack food industry is consolidating very quickly and Hain Celestial is likely to be acquired next. In my opinion, General Mills will be a potential suitor for Hain Celestial. However, a potential acquisition isn’t the only reason to buy Hain Celestial.

The company is still growing at a fast pace. As per Yahoo! Finance, Hain Celestial is expected to grow 10% this year. With the company still reporting fast growth, it remains a good buy with or without a potential acquisition.

Twitter (TWTR)

Twitter is another company that is likely to be acquired in my opinion. Although Twitter reported a terrible quarter, the company is still an acquisition target. I couldn’t wrap my head around the fact that LinkedIn got acquired for a massive premium, yet Twitter is valued at under $13 billion.

Although Twitter’s growth has peaked for now, the company needs a complete executive overhaul. I have said it time and again that Jack Dorsey is not a good fit for Twitter and the company needs a new CEO to get back on track. Twitter has massive potential as a social networking giant and I am quite confident that many companies will look to acquire it to unlock its true potential.


Both Twitter and Hain Celestial are my best takeover ideas going forward. Due to the reasons mentioned above, I am quite confident that both Twitter and Hain Celestial will be subject to several takeover offers going forward. However, since betting on acquisition is risky, I would recommend investors to allocate only 5% of their portfolio to both of these stocks.

Disclosure: No position.
Published on Aug 9, 2016
By Ayush Singh

Copyrighted 2020. Content published with author's permission.

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