The five tech takeover targets that we identified last year have performed well since – and one actually did get acquired
SmallCapPower | October 16, 2017: Last year, we identified five tech takeover targets with high gross margins, stable returns on equity and relatively high free cash flow per share yields. The stocks were outlined as potential takeover targets. Although only one of them was acquired, the group yielded average returns of 60%, with Alibaba Holdings Group Ltd leading the way, up 128%.
Read: Warren Buffett May Be Setting His Sights on These 5 Tech Stocks
Alibaba Group Holding Ltd (NYSE:BABA) – US$180.53
Alibaba Group is a technology company that offers e-commerce, cloud computing, digital media and entertainment, and financial services to clients across the world. The Company has four websites, which serve as wholesale and retail online marketplaces. Alibaba Cloud was launched in 2009 and has grown to become China’s largest provider of public cloud services. Alibaba also owns Ant Financial Services, which operates Alipay; China’s largest third-party online payments platform.
- Market Cap: US$465.06 Billion
- Price at Last Report Date: US$79.03
- Overall Return (since May 20, 2016): 128.43%
Texas Instruments Inc. (NASDAQ:TXN) – US$92.62
Texas Instruments Inc. is a global semiconductor chip producer with operations in 30 countries and over 30,000 employees. The Company’s products are used in a wide array of industries including the industrial, enterprise systems, communications equipment, personal electronics, and automotive sectors.
- Market Cap: US$91.7 Billion
- Price at Last Report Date: US$58.01
- Overall Return (since May 20, 2016): 59.66%
Intuit Inc. (NASDAQ:INTU) – US$145.86
Intuit Inc is a software company that provides tax and accounting software for individuals, small businesses, and the accounting industry. The Company’s flagship products include QuickBooks and TurboTax. Intuit was founded in 1983 and serves 42 million clients across the globe. Furthermore, the Company has 8,200 employees working in more than five countries.
- Market Cap: US$37.44 Billion
- Price at Last Report Date: US$102.70
- Overall Return (since May 20, 2016): 42.02%
Linear Technology Corp. (Acquired)
Linear Technology is a manufacturer of analog integrated circuits that has serves companies across the globe. Linear’s products are used by a variety of industries including the communications, networking, industrial, automotive, computer, medical and military sectors. The Company also produces wireless sensor network products. On March 10, 2017, Linear was acquired by Analog Devices Inc. for US$14.8 Billion.
- Price at Last Report Date: US$44.86
- Market Cap at Last Report Date: US$10.7 Billion
- Overall Return (since May 20, 2016): 37.99%
NXP Semiconductors NV (NASDAQ:NXPI) – US$115.18
NXP Semiconductors is another chip producer that focuses on several industries that include the automotive, cyber security, portables & wearables and the Internet of Things. The Company operates in more than 35 countries, employing approximately 30,000 individuals.
- Market Cap: US$39.85 Billion
- Revenue: US$9.5 Billion
- Price at Last Report Date: US$87.03
- Overall Return (since May 20, 2016): 32.35%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.
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