Morgan Stanley picks 11 stocks set to pop on deal-making this year

The volume of mergers, acquisitions and IPOs in Europe have been rising sharply, and Morgan Stanley has identified 11 stocks that could capitalize.

In a note Wednesday, European equity strategists Matthew Garman and Graham Secker highlighted that M&A volumes have risen to their highest levels since 2008 in the last six months, while the number of initial public offerings is near post-financial crisis highs.

Drawing on historical comparisons, they pointed out that companies announcing spin-offs of business units typically perform strongly up until the spin-off is completed, but the spun-off entity will then outperform its parent over the next 12 months.

They picked out 11 companies that are either already restructuring or disposing of businesses, or where such a move is under consideration, but whose stock is cheap considering the potential value added by upcoming corporate activity.

Here’s the list: