The results of the quarterly "CFO Outlook Survey" are in, and generally speaking, these execs are looking on the bright side. Overall CFO optimism about the state of the economy is up. And the forecast for their own companies is positively sunny -- more than half are planning to hire additional employees, a good sign that these companies are meeting or exceeding their goals.

With their balance sheets relatively healthy, many companies seem to have gotten the urge to merge. Over a third of CFOs polled indicated rising company interest in mergers and acquisitions, and nearly a quarter saw an increase in their company's interest as a takeover target, up substantially from Q2 2009.

So how can you, the investor, capitalize on M&A activity? You may want to see what's happening over in the options market. When a stock's equity calls start getting snapped up way faster than puts, this could be a signal that it's ripe for the picking -- a sudden surge in calls, whereby investors buy the future rights to shares at a fixed price, often occurs just before a takeover.

That said, it's looking like M&A doesn't seem to be picking up steam at the pace that was initially expected -- so there's a significant chance that many takeover targets won't actually be acquired after all is said and done.

But regardless of the M&A outcome, potential takeover targets with strong financials still make sound investments. Think of it this way: If these companies are perceived to be adding value, there's a good chance that they're worth a lot more than their current price, even if no takeover is announced.

To compile this list, we started with a universe of takeover targets identified by sources like CNBC, UBS, Merrill Lynch, Barrons, Morningstar, and Street Insider, just to name a few. We then narrowed down the list by only focusing on those stocks in the starting universe that have a large number of open call option positions relative to put option positions. (Click here to access free interactive tools to analyze these ideas.)

Here's our list of the top nine M&A targets in the options market. Options data sourced from Schaeffer's. The list has been sorted by the Put/Call ratio.

Company

Publication / Analyst That Identified Company as a Takeover Target

Call Open Interest (# Contracts)

Put Open Interest (# Contracts)

Put/Call Ratio

Phoenix Companies (NYSE: PNX)

UBS

1,670

92

0.06

Harvest Natural Resources (NYSE: HNR)

Street Insider

26,087

1,556

0.06

Build-A-Bear Workshop (NYSE: BBW)

Wall Street Journal

1,953

122

0.06

Cal Dive International (NYSE: DVR)

Wall Street Journal

6,202

539

0.09

Limelight Networks (Nasdaq: LLNW)

Street Insider

12,742

1,691

0.13

Huntsman (NYSE: HUN)

Globe and Mail

76,098

11,182

0.15

The Hain Celestial Group (Nasdaq: HAIN)

UBS

5,687

981

0.17

Brocade Communications Systems (Nasdaq: BRCD)

Barrons

448,613

80,245

0.18

Cott Corporation (NYSE: COT)

Wall Street Journal

1,188

225

0.19

Interactive Chart: Press Play to see how market cap has changed for all the stocks mentioned above.


Disclosure: Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

The Fool owns shares of Harvest Natural Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.