One of the most reliable indicators of a market peak is M&A. When profits near a cyclical peak, sales growth stagnates and the risk of missing earnings targets grows, managements chasing growth at any price, push takeover premiums to extremes.
Ultimately shareholders are the ones who have to pay the price when the wheels come off several years later so naturally, investors become wary when M&A volumes spike.
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And now is the time for investors to start taking a more cautious stance according to a new report from Moody’s...
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