Many More Mergers and Acquisitions in 2018, Says Jeff Yastine

As a highly experienced financial journalist, Jeff Yastine knows how to watch out for the latest economic, investing and business trends. That is how he is able to help the readers of his newsletter from Banyan Hill Publishing, Total Wealth Insider.

All the signs point to greatly increased merger and acquisition activity in 2018. In recent years, companies have largely chosen to grow through organic growth. That is, by using their cash flow to expand their marketing to sell more products and to bring out new products. However, that trend has peaked. The company that tracks M&A data, Dealogic, already reports November 2018 was the second busiest M&A month since they started recording it in 1995. And that was before the new tax law was passed. Deloitte surveyed the executives of 1,000 private equity firms and major corporations. 40% of them identified M&A as the most important activity of the coming year. Two-thirds of respondents are sitting on cash that’s already ear-marked for M&A deals. And two-thirds expect the buyouts or mergers they carry out in 2018 to be larger than ones closed in 2017. Read more about Jeff Yastine at for more info.

Jeff Yastine says the safest way to profit from this increased M&A activity is to buy shares in the exchange traded fund that specializes in buying the shares of companies that have already announced mergers and acuisitions. That IQ Merger Arbitrage ETF. It was developed by New York Life Investment Management LLC. IndexIQ Advisors LLC actually runs it. This ETF’s share price has gone up 24% in the past five years. And it’s up 5% just this year, indicating the volume of M&A activity the year promises to bring to Wall Street.

However, Jeff Yastine writes, the most profitable way to profit from M&A is to buy the stock of companies that are likely targets, then hold on until the deals are announced. As speculator interest in these companies increasses, the market price goes up. And when it is bought up, the acquiring company usually winds up paying more than the stock market price. That’s because they’re decided the company as a whole is valuable to them because its operations will in some way enhance or make their business more profitable.

This M&A activity is already underway, Jeff Yastine tweets. Look for it in aerospace, chip manufacturing and the pharmaceuticals industries. The stock of Akamai Technologies has already gone up in anticipation of a buyout.

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