The Best Quarter for M&A In Years?

Tuesday, 21 Apr 2009 | 4:25 PM ET

Over the last few days, the tech sector has seen some big action, with a major deal between Oracle and Sun Microsystems and the deal between Broadcom and Emulex , can we expect to see more M&A action in the coming months? Jon Najarian, co-founder of Optionmonster.com breaks down the M&A with Scott Wapner on Tuesday’s Fast Money Final Call.

Najarian sees the future to have increasing M&A activity. He points out “sympathy buying” in stocks like QLogic, but he’s observed that the buying action has been concentrated been mainly retail buyers, not large institutional investors who buy equity in larger quantities.

Fast Money Final Call
Where to invest now, with Fast Money's Jon Najarian.

Another sector with some serious M&A action is Pharmaceuticals, with the major acquisitions occurring in the past month. More recently, one name that has been brought up is Teva Phamaceuitals, who may be in the market to acquire another company. Najarian said the rumor on the street was that Teva was interested in Watson Pharmaceuticals (WPI), which caused the trading volume of the stock to go through the roof today.

Based on this, he thinks it may be a little more of a rumor, and is long the stock himself.

The commodities market may soon see its share of activity. Najarian sees some hints of M&A activity with Nucor rumored to be looking at Schnitzer , which caused a dramatic pop in that stock, which Najarian also bought in to. In this example, the volume was more reminiscent of institutional investors, with large chunks of volume occurring throughout the day.

”Anybody can start a rumor on a stock” says Najarian, “It’s a question of whether or not the institutions are believing it. And to the extent they are, I want to get in there too.”

As for overall M&A activity, Najarian expects the second quarter to be the best we’ve seen in years. “I think it’s going to be a hotbed of it” he says “Countries, as well as companies, could be buyers here.”

Check out the video above for the the full version of Tuesday's Fast Money Final Call.

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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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