One of the big games on the Street these days is spotting stocks likely to be takeover targets in anticipation of the demise of the Glass-Steagall Act. This law bars banks from underwriting securities or owning insurance companies. And brokers are banned from commercial banking.

The manager of a large New York hedge fund thinks he has found one: Security-Connecticut Life Insurance (SRC), whose principal products are term and universal life-insurance policies--with about $30 billion in force---and annuities, where it has $600 million in assets.

He believes Security-Connecticut's mix of business will be tempting to a bank because the markets for annuities and universal life insurance are growing much faster than bank deposits. "In a merger or takeover, Security-Connecticut would be worth 40 to 50 a share," says this pro. A takeover wouldn't be new to Security-Connecticut: It was acquired by Lincoln National in 1979. In January, 1994, Lincoln took it public at 22 a share. It's now trading at 24.

Even with no takeover, Security-Connecticut is "a very attractive stock," says Ed Wachenheim III, chairman of Greenhaven Associates in Purchase, N.Y. "It's a well-managed and high-quality company whose stock remains undervalued." He sees the company making $3.35 a share this year and $3.75 next, up from 1994's $3.

A year out, he's betting the stock will sell at 11 to 12 times his projected 1966 earnings, or 41 to 45 a share.

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