As an observer of markets, I'm a huge fan of hostile takeovers. Like accounting frauds, activist campaigns and battles with short-sellers, they add some drama and conflict to a world that can sometimes seem a little too clubbish.

Thomson Financial's Richard Peterson told the USA Today that there have been 13 hostile and unsolicited takeover bids so far this year -- double last year and the most hostile bids this early in a year since the 19 in 1991. Hurrah!

You have to admit that watching Take-Two Interactive (NASDAQ: TTWO) and Electronic Arts (NASDAQ: ERTS) trade barbs in the media is a lot more fun than a press releas announcing that two companies are "thrilled" to have combined their businesses after a few weeks of boardroom negotiations. Where's the fun in that?

Matt Krantz writes that there are three factors that should lead to a continued increase in the number of hostile takeovers: beaten down stock prices make target companies more attractive, an increase in the number of 13-D filings shareholder activists pushing for changes at companies, and the difficulty many small/poorly-capitalized companies will likely face in raising capital in a tough debt market.

How can investors capitalize? There's probably no good shortcut for predicting which stocks are about to receive takeover bids -- corporate espionage aside -- but buying undervalued companies with reasonable certainty of future profitability is probably a good place to start. Good companies at good prices are the most likely takeover candidates.