The Zacks Analyst Blog Highlights: Citrix Systems, Alaska Air Group, Delta Air Lines, Devon Energy and Chevron

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Jul 08, 2014, 09:30 ET

CHICAGO, July 8, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Citrix Systems, Inc. (Nasdaq:CTXS-Free Report), Alaska Air Group, Inc. (NYSE:ALK-Free Report), Delta Air Lines Inc. (NYSE:DAL-Free Report), Devon Energy Corporation (NYSE:DVN-Free Report) and Chevron Corp. (NYSE:CVX-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

M&A Activity Hits 7-Year Peak: 3 New Takeover Targets

Global mergers and acquisitions (M&A) activity has heated up considerably in 2014. Consolidated deal value as of Jun 26, 2014 has increased 75% year over year to $1.75 trillion, as per Thomson Reuters data. This marks the highest level since deal value reaching $2.28 trillion in 2007.

Have you been able to cash in on the strong trend by investing in any of the companies that got acquired? If not, you still have the opportunity to earn a huge acquisition premium by betting on stocks that are the next takeover targets.

3 Potential Takeover Targets

Analysts remain confident of continued strong M&A activity in the second half of the year. So investing in the prospective takeover targets could offer you a handsome return.

Based on market rumors, we have zeroed in on 3 stocks that stand a chance of receiving at least one tender offer in the upcoming days. Moreover, we have selected those that have a solid earnings run over the trailing four quarters and a favorable Zacks Rank. Even if these stocks do not offer a takeover gain, their earrings strength and favorable Zacks Rank should translate into decent price appreciation.

Citrix Systems, Inc. (Nasdaq:CTXS-Free Report): This Zacks Rank #1 (Strong Buy) stock is a business software and services company based in Fort Lauderdale, FL. The company is working on three broad fast growing markets namely Desktop virtualization, Cloud infrastructure and networking, and Collaboration and sharing. The company reported revenues of nearly $3 billion in 2013 and is confident of another 8%-10% increase in revenues in 2014. The company has beaten the Zacks Consensus Estimate in the last four quarters by an average of 13.6%.

Market speculates Citrix as an attractive acquisition target for any tech company that is looking for opportunities to expand its operations in the lucrative arena of Desktop virtualization and Cloud computing.

Alaska Air Group, Inc. (NYSE:ALK-Free Report): Based in Seattle, WA, this regional airlines company boasts a good West Coast route network and has a fuel efficient fleet. Moreover, this Zacks Rank #2 (Buy) stock has displayed high returns and profitability for some time now. The company has beaten the Zacks Consensus Estimate in the trailing four quarters by an average of 4.3%.

All these positive factors make it an interesting acquisition target forDelta Air Lines Inc. (NYSE:DAL-Free Report), which is trying to increase its presence on the West Coast. Speculations about a deal between the two airline companies having been doing the rounds for a sustained period.

Devon Energy Corporation (NYSE:DVN-Free Report): Recently, markets have started buzzing with the rumor of Devon Energy being acquired by Chevron Corp. (NYSE:CVX-Free Report). We believe that this is seemingly huge but definitely not impossible, with widespread consolidations taking place in the oil and natural gas sector. We have to wait and see how credible these rumors prove to be in the coming days.

Nevertheless, Devon Energy -- with its diversified portfolio, mostly including unconventional sources -- has significant long-term growth potential. The company has shown capital discipline by rationally allocating resources to projects that are vital for its future growth and trying to live within generated cash flows. Devon's near-term focus is on the oil and liquids-rich opportunities that exist within its balanced portfolio of properties. The company's focus on E&P activities will help boost liquid production in the future.

This was well reflected in the company's strong financial performance. This Zacks Rank #3 (Hold) stock has beaten the Zacks Consensus Estimate in the trailing four quarters by an average of 11.3%.

It's a Safe Play

Don't wait to pull the trigger -- these stocks should not disappoint even if they don't get takeover bids. Actually, their favorable Zacks Rank is an indicator of their decent performance in the near term, and the takeover potential may add a handsome bonus to your return.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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