Back to top

Image: Shutterstock

Zacks Value Trader Highlights: AbbVie, Allergan, Occidental, Chevron and CVS

Read MoreHide Full Article

For Immediate Release

Chicago, IL – February 21, 2020 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:

One of Your Stock Investments Is Being Acquired: Now What?

Welcome to Episode #178 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

Recently, she got a question from a listener about what to do when a company they are invested in is about to be acquired.

It’s not as straight forward as you might think.

Many times, the shares will soar on the news. Only, it can then stall out near the acquisition price, sometimes for over a year, waiting for the deal to go through.

Are You a Trader or an Investor?

The response to an acquisition announcement could be different depending on whether or not you are a trader or an investor.

For a trader, the stock usually rises near the deal price and then doesn’t do much after that.

Last June, AbbVie (ABBV - Free Report) announced it was buying Allergan in a $63 billion deal. It was paying $188 a share.

Allergan soared on the news and has mostly stayed near that price, although recently it has traded as high as $198.

The deal is expected to close in 2020.

Traders would have moved on from the stock months ago. But investors have other things to think about.

Sometimes They Get Multiple Offers

Occasionally, the first offer isn’t the final offer.

Last year Occidental (OXY - Free Report) got into a bidding war with Chevron (CVX - Free Report) over Anadarko. Occidental ended up winning, but the price paid to Anadarko shareholders rose.

It paid to be patient if you were an Anadarko shareholder and wait to see how everything played out.

Are Mergers Always Successful?

In November 2018, CVS (CVS - Free Report) closed on its acquisition of health insurance giant Aetna.

But over the last 2 years, shares are up just 5.3% versus 22.7% for the S&P 500.

If Aetna shareholders remained loyal to CVS, they’re not faring very well so far.

What else do you need to know about what happens when one of your companies is acquired?

Listen to this week’s podcast to find out.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

Published in