Pirate Capital revealed a 5.6% stake in Mueller Water Products (NYSE:MWA) in a 13D filing today after it received shares as part of the company's spin-off from parent company Walter Industries (NYSE:WLT). While Pirate Capital did not disclose any plans with regards to its spin-off shares, they are likely to hold onto them as spin-offs statistically tend to outperform the market in general. Meanshile, Walter Industries has been nearly flatlined through most of this year; however, many argue that the stock remains undervalued. Pirate, it appears, would agree, as they continue to hold their $135 million stake in the company, although they did cut their stake slightly in October. Regardless, these are definitely two stocks to keep an eye on into 2007.

Related Companies
Lennar Corporation (LEN)
KB Homes (KBH)
NVR, Inc. (NVR)