Integrating something you purchased is quite hard. I read a study once and it said that 70% of all acquisitions are unsuccessful. Part of the problem is that what makes this niche players successful is their cultures and that is the first thing ABB gets rid of. I used to work at Bailey Controls. What made it successful was its lean managment structure and tightly couple R&D with applications. ABB came in and put in multiple layers of management and moved R&D to Europe. They pretty much discontinued the US developed products and R&D staff. The result? Lost sales, lost growth. What made Bailey attractive was the very thing that ABB got rid of. Pretty typical in buyouts.
When BP hit $40 I bought. I thought, with Oil at $100/bbl, how can this company longterm loose? Well, for a couple of years, the American legal system kept it down. Now, I think $100/bbl oil has finally overpowered the legal system. I think this goes to $60/share.
As I indicated in October, I thought TAL was getting pricey. I sold half my position at $46 and the other half at $49. Today, the stock is back to $45. I am trying to think when it is time to get back in. I am thinking about $40 to $42.
CVX was hit by a $19 billion judgement from a third world court. They hired the lawyers and went to war. In the words of one of their lawyers, "we will fight until Hell freezes over. And then, we will fight on the ice."
CVX realizes that the legal system is legalized extortion and there is little difference between a Louisana court and a third world court. Fight! Fight! Fight!