Ihr Takeover Sends Stock Up 73 Percent - Find the Next Takeover Target

On Dec 18 2009 IHR or Interstate Hotels was bought out by a joint venture between Thayer Lodging Group and Jin Jiang Hotels. The stock jumped from $1.30 to $2.22, about a 73 percent gain. Sure is good to see buyouts starting to pick up as the economy gets on it's collective feet again so to speak.

Interesting story, but how can you benefit from it now that it has already happened? You can't go back in time and buy IHR stock on December 17th can you? (If you happen to have a time machine that has this capability let me know and I will buy you lunch at my favorite pizzeria)

Don't just look at this story and the stock chart of IHR and kick yourself because you missed out. See it for the opportunity that it is. This takeover is an opportunity to find the next stock buyout or takeover. All you need to do is use the following strategy:

1. Plug the stock ticker (IHR) into finance.google.com

2. Scroll down the page a little and look at the section entitled "related companies".

3. Now look at the column at the far right, which is "Market Cap". This details the market capitalization for each similar company. Pick 2 or 3 stocks that have the market caps that are closest to the stock that has been bought out, in this case it would be IHR. I just did this scan and I came up with the stock tickers of LGN and RLH.

That's it! You can choose to buy these stocks and simply wait a little while for takeover offers to send them up. Even if they do not get takeover offers, often times they will rise significantly over the course of a few weeks due to the sympathy from the recent buyout.

This strategy has worked for me fairly recently. When I saw news about PER being bought out, and the subsequent huge one day jump in their share prices, I used this tactic. I came up with ACS as a potential buyout target. A couple weeks later Xerox offered up a nice deal to buy out ACS. Pretty cool right?

I alert my subscribers of my penny stock newsletter to any potential buyout target stocks, and you can get 3 penny stock recommendations for free just by signing up.

Written By Matt Morris, Editor of Microcapmillionaires.com the best penny stock newsletter in existence. I am one of the few penny-newsletter-guys that do not accept compensation to "pump" penny stocks. Sign up for 3 hot penny stocks here.