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The following is a list of companies that have been identified as potential takeover or leveraged buyout (LBO) candidates by various publications, including Barron's, UBS, Morningstar, Wall Street Journal, Marketwatch, TheStreet.com and StreetInsider.

In addition, all of these stocks have, on average, seen more insider buying than insider selling over the last two years (excluding exercised options). For each company we'll list the average number of shares purchased by insiders on the open market over the last two years, and its percentage of shares outstanding.

Based on the enthusiasm of insiders, this list might offer an interesting starting point for your own analysis. (Click here to access the complete universe of takeover targets, along with the sources that identified them)

Insider data sourced from Fidelity, short float and performance data from Finviz.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


List sorted by avg. insider purchases as a percentage of shares outstanding.

1. Quicksilver Resources Inc. (NYSE:KWK): Independent Oil and Gas Industry. Market cap of $2.49B.

Street Insider identified the company as a takeover/LBO target. Insiders bought an average of 886,499 shares over the last two years (0.52% of 170.32M shares outstanding). Short float at 6.47%, which implies a short ratio of 4.63 days. The stock has gained 4.28% over the last year.

Other Highlights:

- The company has demonstrated rapid cash flow growth over the last five years, which may lower its risk going forward. Five year average cash flow growth at 37.69%, much higher than the industry average at 8.57%.

2. Dell Inc. (NASDAQ:DELL): Personal Computers Industry. Market cap of $26.85B.

Barron's identified the company as a takeover/LBO target. Insiders bought an average of 3,289,932 shares over the last two years (0.17% of 1.93B shares outstanding). Short float at 3.52%, which implies a short ratio of 3.05 days. The stock has gained 1.16% over the last year.

Other Highlights:

- The company outperformed analyst earnings estimates during the most recent quarter, suggesting that the analyst community is underestimating the stock. The company reported earnings per share of $0.45 per share, and exceeded the First Call Consensus of $0.33 (Q3 Earnings on 11/18/10). The company also outperformed analyst estimates over the last year, reporting earnings per share at $1.05, beating the consensus view at $1.03 (based on the estimates of 18 analysts).

3. American Eagle Outfitters, Inc. (NYSE:AEO): Apparel Stores Industry. Market cap of $2.87B.

TheStreet identified the company as a takeover/LBO target. Insiders bought an average of 258,163 shares over the last two years (0.13% of 195.69M shares outstanding). Short float at 6.63%, which implies a short ratio of 1.99 days. The stock has lost -2.59% over the last year.

Other Highlights:

- The company's capital spending accelerated by 5.54% over the last five years, much faster than the industry average of -8.49%. At least theoretically, this makes the company more competitive over the coming years, since its operational assets are more up-to-date.

4. Akamai Technologies Inc. (NASDAQ:AKAM): Internet Information Providers Industry. Market cap of $8.75B.

Street Insider and Business Insider both identified the company as a takeover/LBO target. Insiders bought an average of 147,458 shares over the last two years (0.08% of 182.34M shares outstanding). Short float at 3.63%, which implies a short ratio of 1.66 days. The stock has gained 92.27% over the last year.

5. Plains Exploration & Production Company (NYSE:PXP): Independent Oil and Gas Industry. Market cap of $5.23B.

UBS identified the company as a takeover/LBO target. Insiders bought an average of 84,769 shares over the last two years (0.06% of 140.10M shares outstanding). Short float at 6.86%, which implies a short ratio of 4.19 days. The stock has gained 18.21% over the last year.

Other Highlights:

- The company appears to be undervalued relative to book value. Price/Book ratio at 1.58, much lower than the industry average of 3.49.

- Over the last year, the company has proven itself to be more profitable than its industry competitors. Trailing 12-month (NYSE:TTM) gross margin at 67.25%, higher than the industry average at 36.42%. TTM EBITD margin at 58.25% vs. industry average at 30.52%, while TTM operating margin came in at 23.48%, higher than the industry average at 16.38%. The company also outperformed with its pretax margin, reporting a ratio of 20.93%, higher than the industry average at 15.92%.

6. Zions Bancorp. (NASDAQ:ZION): Regional Bank. Market cap of $4.5B.

Banking analyst Dick Bove identified the company as a takeover/LBO target. Insiders bought an average of 77,526 shares over the last two years (0.04% of 177.96M shares outstanding). Short float at 10.67%, which implies a short ratio of 5.09 days. The stock has gained 36.65% over the last year.

Other Highlights:

- Institutional and mutual fund investors have been net purchasers of the company's shares over the last two quarters, suggesting that the smart money thinks there's more upside to the stock. Institutional investors have been net buyers of 5.8M shares during the most recent quarter, vs. 1.7M net shares purchased in the previous quarter. Mutual fund investors have also been optimistic on the stock. They were net buyers of 4.2M shares during the most recent quarter, vs. 6.0M net shares purchased in the previous quarter.

Source: Top Six Takeover Targets Backed by Insider Buying