Chart o’ the Day: Still Corporate Cash Everywhere

Steven DeSanctis who heads up Bank of America Merrill Lynch’s Equity Strategy/High Yield Strategy group makes the case for why M&A should pick up beyond the slightly better environment we saw in 2013.

He notes that the cost of borrowing is still historically low, that companies who’ve been the acquirer in a deal have seen gains in market value and, lastly, there’s still a ton of cash everywhere. These trends take a long time to play out and could act as a buffer beneath the market – it’s rare to see a bear market begin just as the M&A cycle first gets cooking.

Here’s BAML on corporate cash positions:

Overall valuations have been on the rise with much better equity performance but
we still see cash as a percentage of market cap above historical averages for
large and small caps (Chart 9). For the large cap Non-Financials, cash currently
represents about 10% of market cap, which remains well above the 30-year
average of 7%. As for small caps, 12% of the size segment’s market cap sits in
cash versus an average going back to 1988 of about 11%. The decline in these
ratios is attributable to a function of market caps rising and not an indication of
companies drawing down their cash levels.

Screen Shot 2014-03-07 at 6.18.31 PM



M&A activity should pick up as markets make new highs
Bank of America Merrill Lynch – March 6th 2014

What's been said:

Discussions found on the web
  1. math help websites commented on Sep 20

    … [Trackback]

    […] There you can find 26876 additional Information on that Topic: […]

  2. Immediate Edge Review commented on Sep 22

    … [Trackback]

    […] Read More on that Topic: […]

  3. commented on Sep 28

    … [Trackback]

    […] Find More to that Topic: […]

  4. retro sweets commented on Sep 29

    … [Trackback]

    […] Find More here on that Topic: […]

  5. bitcoin loophole commented on Sep 30

    … [Trackback]

    […] Read More on on that Topic: […]

  6. bitcoin blazing trader commented on Sep 30

    … [Trackback]

    […] Find More Information here to that Topic: […]

  7. Buy gun optics online commented on Oct 14

    … [Trackback]

    […] Info to that Topic: […]

  8. Electricity Plans commented on Nov 15

    … [Trackback]

    […] Read More on to that Topic: […]

  9. best swiss replica watches commented on Jan 06

    … [Trackback]

    […] Find More on on that Topic: […]

  10. commented on Jan 12

    … [Trackback]

    […] Find More on to that Topic: […]

  11. commented on Jan 14

    … [Trackback]

    […] Read More to that Topic: […]

  12. view publisher site commented on Jan 14

    … [Trackback]

    […] There you will find 59643 additional Information to that Topic: […]