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When a company announces that it's being taken over, its stock often jumps in price to reflect the takeover premium being paid for the company. This is great for investors holding the stock, so analysts try to predict takeover/leveraged buyout (LBO) targets before they're taken over.

We compiled a universe of rumored potential takeover/leveraged buyout (LBO) targets from various sources including Bloomberg Businessweek and iStockAnalyst and screened the list for stocks that are being favored by the "smart money," seeing significant net institutional purchases over the current quarter.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies are likely to be taken over? Use this list as a starting point for your own analysis.

List sorted by net institutional purchases as a percent of share float. To access the complete list of takeover targets, click here.

1. E-Commerce China Dangdang Inc. (NYSE:DANG): Operates as a business-to-consumer e-commerce company in the People's Republic of China. Market cap of $387.63M. Takeover/LBO rumor sourced from Seeking Alpha. Net institutional shares purchased over the current quarter at 5.5M, which is 19.75% of the company's 27.85M share float. The stock has had a couple of great days, gaining 5.84% over the last week.

2. InterMune Inc. (NASDAQ:ITMN): Focuses on developing and commercializing therapies in pulmonology and hepatology. Market cap of $820.19M. Takeover/LBO rumor sourced from Minyanville. Net institutional shares purchased over the current quarter at 7.9M, which is 14.97% of the company's 52.77M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.32). The stock has performed poorly over the last month, losing 31.96%.

3. Savient Pharmaceuticals, Inc. (SVNT): Focuses on developing KRYSTEXXA, a biologic PEGylated uricase in the United States. Market cap of $165.10M. Takeover/LBO rumor sourced from Minyanville. Net institutional shares purchased over the current quarter at 5.1M, which is 9.20% of the company's 55.46M share float. The stock is a short squeeze candidate, with a short float at 38.96% (equivalent to 16.89 days of average volume). The stock has lost 79.98% over the last year.

4. Oshkosh Corporation (NYSE:OSK): Designs, manufactures and markets a range of access equipment, specialty vehicles and vehicle bodies worldwide. Market cap of $2.05B. Takeover/LBO rumor sourced from Bloomberg Businessweek. Net institutional shares purchased over the current quarter at 5.2M, which is 6.35% of the company's 81.86M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.64). The stock has lost 37.67% over the last year.

5. Seattle Genetics Inc. (NASDAQ:SGEN): Focuses on the development and commercialization of monoclonal antibody-based therapies for the treatment of cancer and autoimmune diseases in the United States. Market cap of $1.89B. Takeover/LBO rumor sourced from Minyanville. Net institutional shares purchased over the current quarter at 7.1M, which is 6.26% of the company's 113.40M share float. The stock is a short squeeze candidate, with a short float at 22.38% (equivalent to 12.87 days of average volume). The stock has gained 5.2% over the last year.

6. Infinera Corporation (NASDAQ:INFN): Provides optical networking systems based on photonic integration technology in the United States. Market cap of $696.87M. Takeover/LBO rumor sourced from CNBC. Net institutional shares purchased over the current quarter at 6.2M, which is 6.03% of the company's 102.81M share float. The stock is a short squeeze candidate, with a short float at 9.27% (equivalent to 8.78 days of average volume). The stock has lost 38.33% over the last year.

7. Leap Wireless International Inc. (LEAP): Provides digital wireless services under the "Cricket" brand name in the United States. Market cap of $780.02M. Takeover/LBO rumor sourced from CNBC. Net institutional shares purchased over the current quarter at 2.7M, which is 5.53% of the company's 48.80M share float. The stock is a short squeeze candidate, with a short float at 16.12% (equivalent to 6.18 days of average volume). The stock has had a couple of great days, gaining 16.45% over the last week.

8. Telephone & Data Systems Inc. (NYSE:TDS): Provides wireless and wireline telecommunications services in the United States. Market cap of $2.71B. Takeover/LBO rumor sourced from Bloomberg Businessweek. Net institutional shares purchased over the current quarter at 3.9M, which is 4.85% of the company's 80.34M share float. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 7.55. The stock is a short squeeze candidate, with a short float at 8.87% (equivalent to 12.49 days of average volume). The stock has lost 27.82% over the last year.

9. Arris Group Inc. (NASDAQ:ARRS): Develops, manufactures and supplies telephony, data, video, construction, rebuild and maintenance equipment for the broadband communications industry worldwide. Market cap of $1.28B. Takeover/LBO rumor sourced from Seeking Alpha. Net institutional shares purchased over the current quarter at 5.0M, which is 4.55% of the company's 110.01M share float. The stock is a short squeeze candidate, with a short float at 9.51% (equivalent to 9.6 days of average volume). The stock has lost 5.99% over the last year.

10. GameStop Corp. (NYSE:GME): Operates as a retailer of video game products and personal computer (PC) entertainment software. Market cap of $3.25B. Takeover/LBO rumor sourced from Seeking Alpha. Net institutional shares purchased over the current quarter at 4.5M, which is 3.33% of the company's 134.98M share float. Might be undervalued at current levels, with a PEG ratio at 0.91, and P/FCF ratio at 4.62. The stock is a short squeeze candidate, with a short float at 29.91% (equivalent to 11.73 days of average volume). The stock has gained 3.84% over the last year.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 10 Takeover / LBO Targets Being Snapped Up By Hedge Funds