Low capital cost and strong economic growth have created a perfect storm for stock mergers and acquisitions in recent years. The majority of the time, news of bought-out stocks will send share prices soaring immediately, but sometimes they’re not the best stocks to buy.

Typically, a buyer makes a bid for a target at a significant premium to current market price in order to entice management and shareholders to accept the offer. In the first three quarters of 2016, the average buyout premium was between 30% to 35% higher than market price.

Any stock investor would love to see his or her shares jump 30%-plus overnight. However, the buyout process isn’t always so neat and tidy.

Sometimes, buyout offers raise regulatory antitrust concerns. Other times, shareholders of the bidding company may not be as enthusiastic of the proposed deal as the target company is. In these cases, the target company’s stock will trade at a discount to the buyout price until the deal is officially complete.

Risk arbitrage traders find opportunities in these situations, and there are plenty of them out there today. Here are three bought-out stocks to buy due to their significant upsides.

Bought-Out Stocks to Buy: Time Warner Inc (TWX)

Time Warner Inc (NYSE:TWX) and AT&T Inc. (NYSE:T) made…

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