Takeover translates into big gain for small cap value investors. Last week Radiant Communications Corp. was officially acquired by Comwave Networks Inc. for $1.43 per share. Investors who purchased shares of Radiant Communications when we first recommended the Company's stock (then trading at $0.51) to our Top Ideas – Small Cap Value Stocks list, gained 180% on this investment in just under 14 months (See: Radiant Communications Corp. shines value for small cap investors).
The takeover acquisition of Radiant Communications comes as no surprise to us. In December 2012 we predicated a "going private" transaction proposal for Radiant Communications could surface in 2013 to uncork a higher stock valuation that this Company deserves (See: Investorfile has a view for 2013 - Predication #6: Our Top Ideas stock, which could be acquired in 2013).
To date, Radiant Communications is not the only company on our Top Ideas list that was acquired in 2013. Galvanic Applied Sciences Inc. was subject to takeover just three months after we first recommended the Company's stock yielding a quick profit for small cap value investors (See: Galvanic Applied Sciences: Not a sexy stock but the fundamentals make it very attractive). Investing in undervalued small cap companies that are fundamentally strong can be very financially rewarding. But, more often than not, a shareholder value–enhancing event like a takeover of such companies can generate significant premiums to the small cap's stock price and just as important, instant liquidity for such investments.
To this point, we feel strongly that any one stock on Investorfile's Top Ideas list could be subject to a takeover offer in the future. But, for it to happen in 2014, you will need to wait for our next set of predictions!
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This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.
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