From small "tuck in" acquisitions, to large megamergers, to companies buying significant stakes of other firms, 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-worse-ification": weakening an existing business's 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 dealbreakers. We'll see how the 65,000 investors in the Motley Fool CAPS universe rate the companies 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, since those ratings forecast investor sentiment of future prospects.

Could troubles in the capital markets finally be taking their toll in the M&A arena? While deals won't stop, with the loss of easy credit expect to see more stock swaps play a role in financing transactions. 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 the maximum five stars:

Target

CAPS Rating

Acquirer

CAPS Rating

Deal Price

Offermatica

NR

Omniture (NASDAQ:OMTR)

****

$65 million

Agroeste Sementes

NR

Monsanto (NYSE:MON)

****

$100 million

Mandate Pictures

NR

Lions Gate (NYSE:LGF)

***

$56.3 million

Official Pillowtex

NR

Iconix Brand (NASDAQ:ICON)

*****

$231 million

Applix (NASDAQ:APLX)

*****

Cognos (NASDAQ:COGN)

****

$339 million

CAPS ratings courtesy of Motley Fool CAPS; NR = not rated

Despite the much-anticipated merger slowdown, there's still enough action. Private equity has invested more than $900 billion in mergers and acquisitions over the first six months of the year. According to Dealogic, more than $13.3 trillion worth of deals have been made since 2004, making this the richest three-year run since the tech boom at the turn of the century.

Getting the information flow
So what do CAPS investors think about these targets and acquirers? Most of these deals are small ones, all less than a half billion dollars, and most for small, privately held businesses. In fact, other than a $1.5 billion buyout of a rival announced by Canadian Pacific Railway (NYSE:CP), the Cognos merger is one of the bigger deals being made in the past week.

Branding iron on brands
The second-biggest deal highlighted this week is also the most interesting. Iconix has had a voracious appetite lately, gobbling up a number of brand names to license in its bid to venture outside of fashion. Along with Joe Boxer, Ocean Pacific, and Roca Wear, Iconix also brands Candie's shoes, Mudd, London Fog, and Mossimo. It also just settled a lawsuit with Burberry. Revenue at the brand-management company more than doubled to $80.7 million, from $30.2 million the year before.

Iconix is an investor favorite at CAPS, with 97% of raters believing that it will outperform the market. It's equally interesting that 23 of the 24 CAPS All-Stars -- investors who regularly outperform their peers over time -- think the company is a winner. CAPS player mrsharaf19 says he has worked with Iconix in the past and can attest to its potential:

I used to work very closely with this company as an investment banker and have personally met Neil Cole and the entire management team.

Iconix has the potential to engage in huge blockbuster deals. Given their business model of brand ownership with guaranteed royalty payments they have the potential to secure large amounts of debt very cheaply. An SPV gets the guaranteed portion paying down debt with the [remainder] flowing to ICONIX's bottom line. The beautiful thing is these deals are immediately accretive.

They have a diversified portfolio of brands, no COGS risk, and lots of international growth potential. They always have deals in the pipeline... don't be surprised to see big names in the near future. You want to be long this stock now.

The Pillowtex deal certainly seems to fit mrsharaf19's prescient call of more name deals. It probably doesn't hurt that the company has also aligned itself with the world's largest retailer, as drphilkav notes:

Teaming with Walmart is a great boon for the name and, I predict, sales.

A value-added offer
What's your take on these deals? Should investors accept the cash or take stock in the new company if offered? Only at Motley Fool CAPS is your opinion as valuable as the pros'. Tell the CAPS community whether the urge to merge is good to go, or whether it would be better to fight for independence.

Omniture is a recommendation of Motley Fool Stock Advisor. A 30-day risk-free trial is available by clicking here, giving you full access to see why the business optimization software maker is an investor favorite.

Fool contributor Rich Duprey owns shares of Wal-Mart but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. Applix is a Rule Breakers newsletter recommendation.  The Motley Fool's disclosure policy is good on its own, thanks.