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Are these stocks hot buys following today’s news?

Corporate jet colossus BBA Aviation (LSE: BBA) strode to fresh 15-month peaks in Tuesday business after announcing game-changing merger news.

The company announced plans to tie-up its aircraft management and charter business with the US aircraft management operations of Gama Aviation. BBA Aviation will own 24.5% of the new entity.

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With around 200 airplanes under management, the combined entity, Gama Aviation Signature Aircraft Management, will be one of the world’s largest aircraft management and charter businesses,” BBA said.

The deal is clearly a big step in BBA’s ongoing growth story, the acquisition of Landmark Aviation in 2015 already transforming its position in the flight support market. And these measures leave the business in line to enjoy explosive revenues growth as US corporate jet activity picks up — latest data from Argus International showed business-related traffic shoot 4.9% higher year-on-year in November.

BBA Aviation is clearly a company on the up, so to speak, yet remains chronically undervalued in my opinion.

For 2017 earnings at the flying ace are predicted to soar 16%. And while a subsequent P/E ratio of 15.6 times may not indicate knockout value, a PEG readout of 0.9 — below the value yardstick of one — illustrates BBA’s dirt-cheap price relative to its predicted growth prospects.

On top of this, an anticipated 12.5-US-cent-per-share dividend creates a 3.6% yield, nipping above the FTSE 100 average of 3.5%. I believe BBA Aviation is a steal at these prices.

Latin leviathan

But it isn’t the only London stock to furnish the market with exciting M&A news on Tuesday.

Indeed, beverages play Britvic (LSE: BVIC) announced plans to bulk up its exposure to lucrative emerging markets after inking an agreement in principle for Brazilian concentrates and juice manufacturer Bela Ischia for £54.5m.

It commented that the deal “both strengthens Britvic’s brand portfolio in Brazil and creates a broader regional footprint by complementing the existing ebba strengths in Sao Paulo and the north east.

The company snapped up ebba in 2015 to latch onto the fast-growing Brazilian marketplace, and is ploughing vast sums into marketing and product launches like that of Fruit Shoot to maximise revenue growth. But Latin America is not the only cause for optimism, with Britvic’s sales in the gigantic US market also heading through the roof.

The City expects Britvic to endure its share of earnings trouble in the near term, the firm anticipated to break its long streak of annual rises with a 3% decline in the 12 months to September 2017.

Still, this figure results in a P/E ratio of just 12 times, some distance below the forward average of 15 times for the FTSE 100. And a projected 24.8p per share dividend leaves Britvic with a yield of 4.3%.

While performance in its UK markets may be poised for some turbulence, I reckon the drinks leviathan’s growing geographical footprint should deliver robust long-term returns.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended BBA Aviation. The Motley Fool UK has recommended Britvic. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.