Dell's Short List: 3 More Potential Takeover Targets?
Tech investors spent Monday pondering which company may be the next takeover target after computer maker Dell announced the $3.9 billion acquisition of Perot Systems .
Speculating correctly could pay big considering Dell offered a steep 67.5% premium.
As you likely know, Dell is the world's No. 2 maker of PCs. Because Perot specializes in providing technology consulting services, investors are speculating that Dell wants to expand its business into other areas and compete with Hewlett Packard and IBM .
And to do that "Dell may also look to make another acquisition," muses Jon Najarian on Fast Money’s Halftime Report.
Dell has over $11 billion in cash on the balance sheet and "it's been pretty open about saying it wants to beef up its enterprise business." adds Bernstein analyst Toni Sacconaghi. "I think Dell wants to move into software and other higher margin hardware categories such as storage."
The kinds of companies Sacconaghi can see Dell buying follow:
Dell's Shopping List: Sacconaghi's Possible Take-Over Targets
Meanwhile, the market moved stocks higher that were perceived to have takeover potential, however Sacconaghi does not feel they are targets. That list follows:
Other Possible Targets For Dell?
Computer Program Systems
How should you trade it?
I'd probably go into Hewlett-Packard, counsels Guy Adami. The stock looks great technically. And if you want to play the takeover game, I'd look at NTAP .
To me IBM looks like the best play in the space, says Tim Seymour. Quite frankly I think Dell overpaid and it makes me nervous about their core PC business.
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Trader disclosure: On Sept. 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AA), (AAPL), (BAC), (EEM), (FITB), (INTC), (RIMM), (RIG), (SBUX); Seymour's Firm is Short (PBR); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (RIG); Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And Owns (BAC); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC); Finerman Owns (WFC) Preferred Shares; Finerman's Firm Owns (MSFT), (NOK), (PBR), (WMT), (RIG), (TGT), (PLCE), (HPQ); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Terranova Owns (FCX) Puts; Terranova Owns (CAT) Puts; Terranova Is Short (WFC); Terranova Is Short (AA); Terranova Is Short (WYNN); Terranova Is Short (JWN)
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