Top 10 Potential Takeover Targets

The King of Prussia, Pa., company has an enterprise value of $880 million, and I wouldn't be surprised if a company such as Qualcomm(QCOM Quote) swept down on InterDigital and bought it for just nine to 10 times cash flows (it currently trades for seven times cash flows).

Super-value mutual fund Heartland Value owns shares of InterDigital. Heartland is one of my favorite value mutual funds to piggyback. It has returned an average of 15.7% over its 22-year history by focusing primarily on value-based micro-caps.

More notably, one of the best hedge funds out there is also a very large holder of the stock. Caxton Associates, the $16 billion New York-based firm founded in 1983 by legendary billionaire macro trader Bruce Kovner, owns nearly 600,000 shares. Other of Kovner's holdings include Goodyear Tire & Rubber(GT Quote), Alcoa(AA Quote) and Lowe's(LOW Quote).

Pioneer Drilling(PDC Quote) is the second name we have been following on our takeover list. The company provides drilling services to oil and gas exploration companies. As long as people need oil, and as long as oil prices remain above $40 a barrel, oil companies will be willing to spend more money to drill in places where it's harder to extract the oil.