MENU

Nextdc Ltd share price rockets on takeover rumours

The Nextdc Ltd (ASX: NXT) share price has been one of the best performers on the market this morning.

The data centre operator’s shares are up 9% to an all-time high of $6.26 at the time of writing. This means NEXTDC’s shares have more than doubled in value since this time last year.

Why are they storming higher today?

Although there was no news out of the company this morning, there appears to be a couple of catalysts for today’s sizeable gain.

The first is a broker note out of RBC Capital. That note reveals that the broker has retained its conviction buy rating and increased the price target on NEXTDC’s shares to $7.50. Even after today’s move higher this price target implies potential upside of almost 20% for its shares.

The other catalyst for today’s move could be speculation that it could be a takeover target.

According to the News Corp press, US private equity giant Blackstone is rumoured to be one of up to six parties that are interested in buying Asia Pacific Data Centre Group (ASX: AJD), which was spun-off from NEXTDC a few years ago. But the spending won’t stop there for at least one of these parties according to the report.

Blackstone, which missed out on buying rival data centre operator Metronode in November, is believed to interested in buying both Asia Pacific Data Centre Group and NEXTDC in what would be a blockbuster double purchase.

Should you invest?

While I think that NEXTDC is one of the best buy and hold investment options on the market at the moment, I would hold off an investment for the time being.

If a takeover bid does not materialise in the near future, I think there’s a danger that these recent gains could be reversed. If that happens then I would suggest investors snap up shares on the weakness with a view for holding them for the long term.

In the meantime these explosive growth shares could be worth buying in my opinion.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!