Goodrich Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Goodrich (NYS: GR) flew 12% in early Monday trading on rumors that United Technologies (NYS: UTX) is considering buying the aerospace manufacturer.

So what: Citing sources close to the matter, Bloomberg reported that Goodrich could fetch $122 per share, representing about a 30% premium to its Friday closing price. According to analyst estimates, acquiring Goodrich could boost United Tech's earnings by as much as 10% in each of the next two years.

Now what: Don't read too much into the takeover talk. While Goodrich might be a decent fit for United Tech, there just isn't enough evidence right now -- both companies have yet to comment on the rumors -- to make a confident short-term buyout bet. After all, United Tech has been unsuccessful in several of its past takeover attempts, so unless you're willing to hold onto Goodrich for the long haul, staying on the sidelines seems like the smart move.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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