The search for undervalued stocks is always on. Indeed, one corner of the market many investors search for value is among companies that may be an acquisition target in the near term.
Finding such companies isn’t always easy. There are certain characteristics that can make a company more prone to being acquired. However, there’s no cut-and-dried methodology for finding these acquisition target plays.
That said, Opsens (TSX:OPS), a developer, manufacturer, installer, and seller of fibre optic sensors, has been identified by analysts as a potential acquisition target. This company’s focus on fractional flow reserve (FFR), oil and gas, industrial applications, and interventional cardiology makes for a wide range of sectors covered by this company.
This industrial and medical play appears to be well positioned in its core markets. Accordingly, analysts believe this company could be targeted by companies seeking growth.
Let’s dive into why.
Opsens: A natural acquisition target
A Raymond James analyst recently opined that Opsens has the potential to be a natural acquisition target of U.S. behemoth Edwards Lifesciences. This comes after Quebec-based Opsens was approved to commence the first in-vitro study with its SavvyWire transcatheter aortic valve replacement (TAVR) device. The approval came from Health Canada a few days back.
The analyst termed SavvyWire as a disruptive technology. He further said that this appears to be a transformative opportunity for the organization. Because of this, increased interest ahead of potential clearance from the U.S. Food and Drug Administration can be anticipated early in the second half of net year.
Today, maximum valve-placing guidewires used in TAVR processes are sold by Boston Scientific and Medtronic. However, these organizations do not account for the lion’s share of the valves utilized in TAVR. Accordingly, these companies account for roughly one-third of the total 2021 TAVR market.
Edwards Lifesciences owns the remaining 66% of the TAVR market. This market share lead may entice the company to consider Opsens as a potential acquisition to maintain this lead.
Given the potential acquisition value placed on OPS stock, analysts have hiked their valuations on this stock. Currently, one analyst has pegged the price target for Opsens at $6 per share. To put that in perspective, this is a stock that closed last week under $3 per share.
Any stock with the potential for 100% upside over the coming year is worth considering. Indeed, this is an intriguing “special situations” play I think warrants investor attention right now on the basis of this analyst note.