From tiny acquisitions to massive conglomerate combinations, Wall Street's urge to merge remains strong. How can we tell the deal makers from the deal breakers?

Breaking down the buildup
To help, we'll turn to the 120,000-plus investors in Motley Fool CAPS. Our data suggests that top-rated stocks offer the best oppportunities to capture the best returns. A combination of two companies with high CAPS ratings should bode well for the new firm's future results, while a high-rated company that joins a lower-rated one may benefit one set of investors more than the other.

Despite troubles in the capital markets, the deals won't stop; they simply might involve more stock and less cash. Here are a handful of recently announced deals, and the ratings for each participating company on CAPS' five-star scale:

Acquirer

CAPS Rating (5 max)

Target

CAPS Rating

Deal Price

Assured Guaranty (NYSE:AGO)

*

FSA Holdings

NR

$722 million

IBM (NYSE:IBM)

****

Transitive

NR

undisclosed

ICON (NASDAQ:ICLR)

*****

Prevalere Life Sciences

NR

$35 million

JDS Uniphase (NASDAQ:JDSU)

***

Circadiant

NR

undisclosed

Novafora

NR

TransMeta

**

$255.6 million

Perrigo (NASDAQ:PRGO)

***

Unico Holdings

NR

$90 million

Precision Castparts (NYSE:PCP)

*****

Hackney Ladish

NR

undisclosed

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

A merger of equals?
If you've ever hesitated about investing in airlines, it's probably because Warren Buffett's admonition against doing so resides somewhere in your cerebral cortex and is holding you back. But providing the parts that aircraft builders need doesn't have that same stigma, and Precision Castparts has built a profitable business supplying it and the oil and gas industry with the parts they need to operate. CAPS All-Star member Har1en sees PCP as a way to buy into the airline business without actually having to do so:

Low debt company with the ability to wait out a recession provides a way to bank on aerospace, while not buying an actual airline, which I probably never will.

Outsourcing research and development work has become an effective means of cutting costs for pharmaceuticals like Eli Lilly (NYSE:LLY). It recently signed up ICON to handle its contract services work. The R&D specialist is using its acquisition of Prevalere Life Sciences to expand into the U.S. in hopes of capturing a larger slice of the drug development market. CAPS All-Star elrap finds ICON to all but be a recession-proof stock:

In so far as it can be - this is a recession proof stock. CEO, Peter Gray was quoted as saying - "people don't stop buying medicines when there is a recession".

Providing assurance
As Air Traffic Controller McCroskey, played by Lloyd Bridges in the movie Airplane!, might say, Assured Guaranty picked a bad time to be in the insurance business. When even Berkshire Hathaway's stock is being pummeled, it's difficult to be an insurer. Yet Assured is making lemonade from the lemons it's been handed, taking over FSA Holdings in what it terms a "once in a lifetime opportunity." The merger could double Assured's financial guarantee business at a cost that's only half of FSA's net worth.

CAPS All-Star member guiron, though, is playing the Bridges role in the investor-intelligence community regarding Assured's line of business:

One of the few bears to underperform the rally on late 11/13. Bad sector, lots of blood-letting to come. Not a good time to be insuring mortgages or finance of any kind. Still bearish.

A value-added offer
What's your take on these deals? Let us know on Motley Fool CAPS. And while there, you can start your own research on these or other stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. There's more there than you might think.

Eli Lilly is a Motley Fool Income Investor recommendation. Berkshire Hathaway is an Inside Value selection. Precision Castparts and Berkshire Hathaway are Stock Advisor recommendations. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.

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.