A little over one week into the new financial year and it has been a dramatic period for several ASX-listed companies.
Shares in online bookings company Wotif.com Holdings Limited (ASX: WTF) have rocketed 30% in the last five days after a takeover offer from booking giant Expedia. The deal has the support of Wotif.com’s board and looks likely to succeed.
Investors certainly appear confident the deal will go ahead and have pushed shares in Wotif.com up to $3.30; the combined price offered by Expedia of $3.06 per share in cash, plus a special 24 cent per share dividend.
There is certainly little room to profit there, but the same can’t be said for fellow online booking operator Webjet Limited (ASX: WEB). Wotif.com’s news has pushed shares in Webjet up more than 15% in the last three days, compared to the approximate 2% rise of the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), and there could be more to come.
Investors are likely to revalue Webjet now on the prospect of further industry acquisitions and it comes after shares in the company had fallen as much as 30% in the last six months.
Meanwhile, shares in walnut and onion grower Webster Limited (ASX: WBA) have soared almost 35% in the last five days on no apparent company news. Webster was my top stock pick for July because of its falling share price and strong long-term growth prospects. However after the company’s recent run the value factor has been etched away and I would prefer to buy at a lower price than today’s $1.18 per share.
Our #1 stock pick to buy today!
A shift in market sentiment suggests that Webjet is the most likely of the three companies to see further increases to its share price, however we have identified one other company that is even better.
Shares in this fast growing small-cap have a place in every portfolio and can be bought today for a P/E of less than 14! Get The Motley Fool's #1 pick now in our newly updated investment report. It's yours FREE. Simply click here for your copy of "The Motley Fool's Top Stock for 2014."
Motley Fool contributor Regan Pearson owns shares in Webjet Limited.