Whether it's small "tuck-in" acquisitions, megamergers between industry giants, or even taking significant stakes in another company, the urge to merge remains strong.

We can't always tell the good deals from the bad. While we might get "synergy," we can just as easily get what investing legend Peter Lynch called "de-worsi-fication": weakening an existing business' core competency by grafting on wildly unrelated subsidiaries.

Breaking down the buildup
We're going to take a shortcut to decipher the good deals from the deal breakers. We'll see how the 31,000 ranked investors in the Motley Fool CAPS universe rate these companies that are hooking up. If two highly rated companies seek a better life together, we figure they might also do better down the road. Conversely, if one company is highly rated and the other low, we might expect one set of investors to come out ahead, because those ratings forecast investor sentiment of future prospects.

Merger activity remains high this week. Here's a handful of some of the recently announced deals, and the CAPS community's ratings for the players involved on its scale of one to five stars (with five stars being the best):

Target

CAPS Rating

Acquirer

CAPS Rating

Deal Price

GlobalSanteFe (NYSE:GSF)

*****

Transocean (NYSE:RIG)

*****

$17 billion

Opsware (NASDAQ:OPSW)

****

Hewlett-Packard (NYSE:HPQ)

***

$1.65 billion

Neoware (NASDAQ:NWRE)

***

Hewlett-Packard (NYSE:HPQ)

***

$334 million

Sterling Financial (NASDAQ:SLFI)

*

PNC Financial Services (NYSE:PNC)

**

$565 million

Despite the thought that mergers may slow, there's still plenty of action, including private equity. In fact, private equity has invested more than $900 billion in mergers and acquisitions over the first six months of the year.

While the boom continues, public company cash hoards also are fueling the M&A boom. According to a representative from the Cullen High Yield Value Equity fund, the companies on the S&P 500 had $1.2 trillion in cash on their balance sheets, accounting for 21% of their market value and apparently burning a hole in their collective pocket.

Getting the information flow
So what do CAPS investors think about these targets and acquirers? Well, Hewlett-Packard was on the prowl, apparently for any company with "ware" in its name. The larger of the two deals, for Opsware for $1.7 billion, looks like a tight fit with HP's recent purchases of similar enterprise software companies Mercury Interactive and Peregrine Systems.

Companies with a range of software from a variety of vendors are able to use Opsware's technology to have them work together seamlessly. Even with HP seeking to expand its leadership in the personal computer field -- despite what was generally viewed as a bungle, Carly Fiorina's purchase of Compaq may very well have set the stage for Hewlett's computer resurgence -- it's also looking to unseat IBM from its perch atop business software solutions.

More than 1,100 investors have rated the company, and 90% see it as outperforming the market. One-quarter of those investors are considered All-Stars, meaning they regularly outperform their peers over time, and they too endorse HP's prospects.

New CAPS investor gardnersf agrees that investments in enterprise software solutions are the growth drivers for this company.

HP is making significant investments in their enterprise software market. This is an area of large potential that will add to the company bottom line. In addition, the investment in management software can drive results in the outsourcing management business as well as the enterprise server market. I expect consumer sales to remain flat, with the largest growth coming from medium to large enterprises, and capital improvements can no longer be delayed.

Many investors give credit to new CEO Mark Hurd for doing what's necessary to position the company for the future.

For example, RobMACDaddy says, "Mark Hurd is still cutting costs. Reducing restate holdings. Printing, computers, and consulting are hitting on all cylinders."

And kenketchup says:

Mark Hurd seems to be the "fitness instructor" that HP has needed for a long time. He is doing a great job in paring down costs and improving profitability in the businesses HP engages in. HP appears to be eating Dell's lunch in the PC side, imaging and printing is still stable growth, and more effort is being made to improve services profitability.

Whether it's personality, style, or a combination of both, Hurd gets the points that Fiorina could not, even if she set the stage for Hurd's chance to shine.

A Foolish offer
Will the merger announcement be a prescription for growth or a new source of investor headache? What's your take on these deals? Should investors accept the cash or take stock in the new company if offered? Tell the CAPS community whether the urge to merge is good, or if it would be better to fight for independence.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.