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 125,000-plus investors in Motley Fool CAPS. Our data suggests that top-rated stocks offer the best opportunity to capture the best returns. Therefore, 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

Target

CAPS Rating

Deal Price

FMC Technologies (NYSE:FTI)

****

Schilling Robotics

NR

$116 million

CORE Projects & Technology

NR

K-12 Services unit of Princeton Review (NASDAQ:REVU)

***

$9.5 million

Liberty Healthcare Group

NR

Diabetes Supply unit of Owens & Minor (NYSE:OMI)

****

$63 million

Allis-Chalmers Energy (NYSE:ALY)

****

BCH

NR

$5 million

American Greetings (NYSE:AM)

*

Recycled Paper Greetings

NR

$73.1 million

Adventure Exploration Partners

NR

Southwestern assets of Rex Energy (NASDAQ:REXX)

****

$18 million

Teledyne Technologies (NYSE:TDY)

****

Demo Systems

NR

undisclosed

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

There were no blockbuster deals to end the year, though a few of the major ones announced earlier in 2008 completed their transactions. What we see instead are companies apparently using the depressed markets to tuck in some small acquisitions that diversify or expand their current offerings.

Deep in the blue
With FMC Technologies generating some $3 billion in revenue annually from subsea operations, its purchase of Schilling Robotics gives it a niche opportunity to expand services for deep-sea oil and gas customers. Schilling specializes in making remotely operated vehicles and manipulator arms used in underwater oil and gas production.

Investors think the deep-sea drilling arena will continue to be an important area for oil and gas exploration. CAPS member RaginSteve sees the technology allowing for greater recovery per well, while All-Star member mrsudbury sees demand for oil being just as strong in the future as it is now and deepwater drilling being the way to pursue it. "[O]ffshore drilling will be required to make up for oil supply shortages in the next decade."

Playing in the margins
While the CEO was selling, the company itself was buying. Allis-Chalmers' CEO was yet another executive forced to sell his company stock because of a margin call. You'd think they'd learn by now. Yet like FMC, the oil services firm was out in the marketplace buying up opportunities for the future. It purchased the remaining stake in BMC that it didn't already own, and that will allow it to diversify its revenue base by expanding its presence in Brazil. Earlier this summer, CAPS member Jac7656 pointed out that Allis-Chalmers had been engaging in a growth-by-acquisition strategy for some time:

If states repeal drilling moratoriums and domestic exploration and extraction increases, this company should stand to profit handsomley. Has been on an acquisition buying spree in 2007 when prices were high and likely overpaid, and has continued to purchase companies since then. This growth-by-acquisition strategy is a little scary, but they might as well try to capitalize on high oil prices driving expansion while this oil boom period lasts.

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.

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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. Princeton Review is a Motley Fool Hidden Gems pick. The Motley Fool's disclosure policy can charm the birds from the trees.