Why Lincare's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of home-health-care services provider Lincare Holdings (Nasdaq: LNCR  ) were puffed up today, gaining as much as 31% in intraday trading after reports surfaced that Germany's Linde AG may acquire the company.

So what: As reported on Financial Times' Alphaville blog, Linde may be ready to pay $3.4 billion for Lincare, which would be a significant premium even over today's post-jump price. Obviously, that'd be a great outcome for investors. And if Alphaville's report is on point, Linde may be pushed by other bidders, as France's Air Liquide and a private equity firm may also be ready to pounce.

Now what: If there's an event that can provide investors with a big, quick windfall, it's an acquisition. But if there's an event that can provide investors with swift and painful disappointment, it's a rumored acquisition that doesn't pan out. There may be very good reason for investors to jump in on Lincare -- if Linde is really ready to pay $3.4 billion, then there may be really compelling value here. However, investors with an itchy trigger finger may want to make sure they really want to invest in Lincare and aren't just taking a gamble on rumors (unless, of course, gambling on rumors is your stated investment strategy).

Want to keep up to date on Lincare Holdings? Add it to your Watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1926617, ~/Articles/ArticleHandler.aspx, 11/29/2014 5:14:05 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement