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Analysts and investors closely follow takeover/leveraged buyout (LBO) targets because when a company announces that it is being taken over, it usually jumps in price to reflect the takeover premium being paid for the company - this is a very profitable event for shareholders.

We compiled a list of rumored potential takeover/LBO targets from various sources including CNN Money and Minyanville. We then screened these names for those with strong trends in revenue compared to inventory: increases in revenue outpacing increases in inventory year-over-year, as well as inventory making up a smaller portion of current assets year-over-year.

To understand why these trends are positive, think why the opposite trends would appear negative. If a company were seeing faster growth in inventory than revenue, it may indicate that the company is having trouble selling its inventory.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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 attractive takeover targets? Use this list as a starting point for your own analysis.

1. Best Buy Co. Inc. (NYSE:BBY): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Takeover/LBO rumor sourced from CNN Money. Revenue grew by 1.76% during the most recent quarter ($12,099M vs. $11,890M y/y). Inventory grew by -8.39% during the same time period ($9,220M vs. $10,064M y/y). Inventory, as a percentage of current assets, decreased from 67.87% to 57.95% during the most recent quarter (comparing 13 weeks ending 2011-11-26 to 13 weeks ending 2010-11-27).

2. Genesco Inc. (NYSE:GCO): Operates Journeys, Journeys Kidz, and Shi by Journeys stores that offer footwear for young men, women, and children. Takeover/LBO rumor sourced from Seeking Alpha. Revenue grew by 32.63% during the most recent quarter ($616.52M vs. $464.84M y/y). Inventory grew by 20.67% during the same time period ($544.1M vs. $450.9M y/y). Inventory, as a percentage of current assets, decreased from 78.34% to 76.85% during the most recent quarter (comparing 13 weeks ending 2011-10-29 to 13 weeks ending 2010-10-30).

3. Oshkosh Corporation (NYSE:OSK): Designs, manufactures, and markets a range of access equipment, specialty vehicles, and vehicle bodies worldwide. Takeover/LBO rumor sourced from Bloomberg Businessweek. Revenue grew by 10.45% during the most recent quarter ($1,878.6M vs. $1,700.8M y/y). Inventory grew by -3.05% during the same time period ($763.6M vs. $787.6M y/y). Inventory, as a percentage of current assets, decreased from 39.% to 33.68% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

4. Pentair, Inc. (NYSE:PNR): Operates as a diversified industrial manufacturing company worldwide. Takeover/LBO rumor sourced from CNBC. Revenue grew by 14.83% during the most recent quarter ($865.69M vs. $753.86M y/y). Inventory grew by 10.98% during the same time period ($449.86M vs. $405.36M y/y). Inventory, as a percentage of current assets, decreased from 37.91% to 36.34% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

5. Tech Data Corp. (NASDAQ:TECD): Distributes information technology products, as well as offers logistics management and other value-added services in North America, South America, and Europe. Takeover/LBO rumor sourced from Seeking Alpha. Revenue grew by 6.98% during the most recent quarter ($6,593.98M vs. $6,163.76M y/y). Inventory grew by -9.43% during the same time period ($1,961.3M vs. $2,165.47M y/y). Inventory, as a percentage of current assets, decreased from 35.85% to 32.67% during the most recent quarter (comparing 3 months ending 2011-10-31 to 3 months ending 2010-10-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 5 Takeover/LBO Targets With Encouraging Inventory Trends