5 Tech Stocks That Could Double Later This Year

With many of the tech giants (Apple(NASDAQ:AAPL), Cisco (NASDAQ:CSCO), Google (NASDAQ:GOOGL), International Business Machines (NYSE:IBM), Microsoft (NASDAQ:MSFT) and Qualcomm (NASDAQ:QCOM)) sitting on record amounts of cash, and with many viable technology stocks selling at multi-year lows and at distressed valuations, we expect a frenzy of M&A to take hold in tech over the second half of the year.

We identify stocks that could be potential takeover candidates by looking at the most undervalued, yet commercially viable technology stocks. But that is merely a first screen to narrow the universe. What makes one of these stocks a potential takeover candidate is highly dependent upon finding the presence of a billionaire investor, influential private equity investor or powerful hedge fund firm.

Many times these investors will take a controlling interest in companies. When they do, they may write a letter to company management, asking the company to seek a buyer.

Using this criteria we have found a list of five technology stocks that have the potential to be acquired for a 100% premium or more, and each are heavily owned by a top hedge fund, private equity firm or billionaire investor.

1) Jive Software (NASDAQ:JIVE) – Jive is controlled by some of the top venture capital firms and hedge funds in the world, and has also seen recent insider buying. Jive’s CEO, Anthony Zingale purchased almost $800,000 worth of the stock last week. Furthermore, two of the most prestigious venture capital firms own Jive. Sequoia Capital owns almost 20% of the company. And Kleiner Perkins Caulfield owns 6.9%. Plus the technology focused hedge fund, Raging Capital, just purchased a nearly 6% stake in Jive.

2) Emulex (NYSE:ELX) – ELX is selling near its 52-week low and is owned by three top hedge funds. Billionaire Paul Singer of the activist hedge fund Elliot Management, owns almost 8%. Activist hedge fund Altai Capital, owns 4.3%. And George Soros through his hedge fund Soros Fund Management owns almost 4%. This company is already in play, as Elliot and Altai have asked the company in writing to sell itself to the highest bidder. In 2009 Broadcom (NASDAQ:BRCM) offered to buy Emulex for $11, which Emulex management turned down. If that bid were accepted today, it would deliver a 100% premium for shareholders.

3) Spark Networks (AMEX:LOV) – Spark Networks, the company that ownd the dating websites, JDate and Christian Mingle is another potential acquisition candidate. This company offers a perfect strategic fit for the likes of Match.com or eHarmony. Activist hedge fund Osmium Partners, owns almost 15% of LOV. This investor is currently trying to win control of the company through a proxy contest, seeking a majority of board seats.

4) Compuware (NASDAQ:CPWR) - CPWR is literally a hedge fund hotel. This stock is owned by three top billion dollar hedge funds for a combined 20% stake. The ownership trio include: Billionaire John Paulson’s hedge fund Paulson & Company; Billionaire Paul Singer’s activist hedge fund Elliot Management; and Sandell Asset Management another billion dollar plus activist hedge fund.

5) Dynavax Technologies (NASDAQ:DVAX)- DVAX is owned by one of the top performing hedge funds RA Capital Management. RA Capital has averaged a 38% annualized return over the past 13 years. The fund owns almost 7% of DVAX.