3 Stocks in the M&A Crosshairs

Norfolk Southern Corp. (NYSE:NSC), Yahoo! Inc. (NASDAQ:YHOO), and Jarden Corp (NYSE:JAH) are buzzing on Wall Street amid M&A talk

by Alex Eppstein

Published on Dec 8, 2015 at 2:17 PM
Updated on Jun 24, 2020 at 10:16 AM

A lot is percolating on the corporate front today. Earlier, news broke of a major buyout bid in the semiconductor space, and the headlines won't stop coming. In particular, three names attracting attention this afternoon are Norfolk Southern Corp. (NYSE:NSC), Yahoo! Inc. (NASDAQ:YHOO), and Jarden Corp (NYSE:JAH).

This morning, rail transportation firm NSC rejected an upwardly revised buyout bid from Canada Pacific, citing regulatory concerns -- not unlike those faced by this pair of office supply retailers -- and a "decrease in the cash consideration." The deal would've paid Norfolk Southern stock owners $32.86 in cash, plus 0.451 of a share in a combined company, for each NSC share.

Norfolk Southern Corp. has fallen 4.6% this afternoon to trade at $87.35, but has rallied 21% since touching a two-year low of $72.10 in late August. Option bulls have been intrigued. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 8.41 NSC calls for every put -- a ratio higher than any other from the last year.

YHOO is fractionally higher at $34.70, following a statement from Verizon Communicatons Inc. (NYSE:VZ) Chief Financial Officer Fran Shammo. Specifically, the exec said the wireless carrier may consider purchasing Yahoo's core business if "there is a strategic fit and it makes sense for our shareholders and we can return value." Meanwhile, YHOO could be pondering big changes to its media unit, including possible restructuring efforts and job cuts, according to a Re/code report.

While Yahoo! Inc. is doing little on the charts today, it's a long-term disaster. In 2015, the shares have shed 31%, while a recent breakout attempt was stopped cold by the stock's 150-day moving average. With more than two-thirds of analysts handing out "buy" or better endorsements on YHOO, further losses could bring on an avalanche of downgrades.

Finally, Yankee Candle parent JAH is surging on rumors it could merge with Newell Rubermaid Inc. (NYSE:NWL). At last check, the former stock has tacked on 4.6% to trade at $52.41, and has extended its month-to-date gains north of 12%.

Meanwhile, the brokerage crowd has been piling on Jarden Corp's bullish bandwagon. Of the 15 analysts tracking the stock, 14 have handed out a "strong buy" recommendation, with not a single "sell" in sight. If that's not enough, the equity's consensus 12-month price target of $59.88 stands in record-high territory, and at a healthy 14.2% premium to current levels.

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