Overlooked and Undervalued: Why Brighthouse Financial Deserves Attention

There are several types of investment situations that fall under the broad term "special situation." One of the most interesting is merger arbitrage. That's what Brighthouse Financial (NASDAQ: BHF) is offering investors, as it has agreed to be acquired at $70 per share. The opportunity lies in the fact that Brighthouse Financial's share price is still well below that figure.When a company agrees to be acquired, there is normally a premium paid above the current stock price. After the transaction is announced, the target company's stock price generally rises toward the agreed-upon price. However, there is often a slight gap between the market price and the agreed-upon price. Those practicing merger arbitrage buy the stock in the hope of making a short-term gain based on that difference.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool