‘It’s a takeover candidate’
Odds are that you’ll never successfully step into a stock right in front of an acquisition for any reason other than luck. Suitors make a point of keeping the lid on M&A plans specifically to avoid front-running a buyout and driving up a price. And, in the rare case where news of an impending buyout is leaked, there’s always someone with closer ties that can act on the information sooner than you can (assuming you’re not in those particular board meetings).
And just for the record, theme-based buyout speculation doesn’t improve your chances of picking an acquisition target. Back in 2012 after Bristol-Myers Squibb (BMY) bought Amylin for control of its diabetes pipeline following the purchase of Neighborhood Diabetes by Insulet (PODD), pundits were sure it would spark a wave of other diabetes-driven acquisitions. Those other M&A candidates began getting bid up, but as it turns out, no more meaningful buyouts materialized in the diabetes space.
Ditto for the gene-mapping mania that was sparked by the Roche (RHHBY) acquisition of Illumina and the GlaxoSmithKline (GSK) purchase of Human Genome Sciences. By the time the gene-mapping M&A trend became obviously hot, the trend was over.