Morgan Stanley ALERT

2019: Morgan Stanley called 11 large IT companies which will be precisely purchased in the next 12 months

At the beginning of August, 2019 submitted to Morgan Stanley the list of the large IT companies which "will precisely purchase" within the next 12 months.

According to analysts, in the second quarter 2019 in the sector of technologies the largest growth of activity in the field of merge and a company takeover was observed. To the middle of year the agiotage fell down as heads prefer to return to shareholders the capital in process of approach of the end of a business cycle, but if any companies decide on the conclusion of transactions, analysts are ready to predict them.

At the beginning of August, 2019 submitted to Morgan Stanley the list of the large IT companies which "will precisely purchase" within the next 12 months

Morgan Stanley updated the report for assessment of probability of acquisition of the companies (Acquisition Likelihood Estimate Rankings Tool, ALERT) which ranges probable transactions by consideration of such factors as market capitalization, the relation of borrowed funds to assets and dividend yield. For example, the companies in relation to assets reckon as more inclined to obtaining offers on the transaction with higher debt and as a result come under the spotlight.

Investors can use the ALERT model as the instrument of check at basic researches of the market for the purpose of search of potential candidates on merge and absorption, analysts said. The ALERT system is capable to reveal risky transactions and to announce them to managers and also can find the companies with higher probability of obtaining offers.

11 IT companies with the highest market capitalization (by the beginning of August, 2019) which, according to experts of Morgan Stanley, will be absorbed within 12 months are given below:

• DXC Technology — $15.02 billion
• Western Digital — $14.16 billion
• Leidos Holding — $11.54 billion
• Zebra Technologies — $11.42 billion
• PTC — $10.74 billion
• Zendesk — $9.93 billion
• Juniper Networks — $9.49 billion
• RingCentral — $9.41 billion
• Black Knight — $9.17 billion
• Docusign — $8.91 billion
• ON Semiconductor — $8.23 billion^[1]

Notes