Converge Technology (TSE:CTS) Exploring Strategic Alternatives. Stock Soars 22.5%

Converge Technology Solutions (TSE:CTS) soared 22.56% today following the news that the company is looking for alternative ways to unlock shareholder value after receiving “expressions of interest.” It created a special committee of independent directors to achieve this. These alternatives include either a “sale, merger, divestiture, recapitalization, other strategic transaction, or continuing to operate as a public company.”

Perhaps another company is interested in buying out CTS due to its high revenue and profitability growth. The news release was very brief, but investors are clearly happy about it. Nonetheless, there’s no guarantee that anything will come from this.

Is CTS Stock a Good Buy, According to Analysts?

Analysts think that Converge Technology can more than double from here. CTS stock earns a Strong Buy consensus rating based on nine Buys and one Hold rating assigned in the past three months. The average CTS stock forecast of C$10.02 implies 104.9% upside potential.

Conclusion: CTS Has Potential, but be Careful

The latest development from CTS is definitely interesting, and if the company finds a way to unlock value, then the stock can move significantly higher from here. Analysts are clearly bullish on the stock as well. However, it may be risky to buy after a 22.56% move higher in one day, considering that there’s no certainty that anything will come from the special committee. Still, it’s a step in the right direction.

Disclosure

Comments are closed.