AECOM Technology Acquisition Lifts Stock Right off the Bat

Shares of AECOM Technology Corporation (ACM) got a lift Monday after the company announced a weekend acquisition. Ellerbe Becket which is an architectural, interiors and engineering firm has been bought by AECOM who continues to build out its portfolio of product offerings by buying out the competition. The ZachStocks Growth Model has a long position in ACM which has taken more time than expected to mature, but it now appears that the company may be building a strong fundamental base which could lead to a sharp rally in the stock.

It is a bit unusual to see the acquiring firm stock rise on the day that the acquisition is made, because usually investors are wary that the acquiring company may have paid a premium in order to take over the target company. However, ACM rose more than 12% on a day when the market was experiencing a significant decline. Volume was roughly double the average number of shares indicating that institutional investors may have been at work building large positions. The initial strength after the transaction is a positive sign and is likely to point to this being an accretive deal for AECOM.