Amgen Inc. (NDAQ:AMGN)  shares dropped $0.79, or 1.55%, today after the company announced that it is weighing its cost cutting options designed to counteract the declining sales of its best-selling amnesia drug. The biotech company is consider, among other things, slowing its research and development programs, tighten capital projects, and a rumored layoff of 20,000 employees. Shareholders are hoping that such efforts can help the company turn itself around and jump the share price.

Amgen saw sales of its top-selling Aranesp amnesia drug drop 19% to $578 million in the second quarter from $713 million a year earlier. The company said it was taking action, however, to restore Amgen by adjusting their cost basis to be more in line with revenue growth, seeking efficiencies, and making "tough-minded" choices. Through trimming the growth of operating expenses and suspending some of its capital projects, the company hopes to improve.

In the end, if the company is able to reduce its operating expenses and jump its earnings per share enough to compensate for poor sales, it could mean significant share appreciation for shareholders. This makes AMGN a stock worth watching!

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Vonage Holdings' (NYSE:VG) cost cutting efforts may have helped it preserve some money during its intense legal battle, but the company's subscriber growth suffered substantially. The broadband telephone company announced a 55 percent reduction in its quarterly loss but suffered a 66 percent reduction in net subscriber growth. Shares gained over 10 percent on the news, however, as investors applauded the company's cost savings.

Meanwhile, Vonage's patent dispute with telecom giant Verizon Communications (NYSE:VZ) is not showing signs of letting up. Verizon recently received a favorable ruling that barred Vonage from adding new subscribers, which could be a potentially deadly turn of events for the new company. Vonage won a stay, however, while the case is being appealed. Unfortunately, the loss of the appeal could also lead to Vonage being forced to pay heavy fines to Verizon for patent infringement.

Many other investors are concerned about the perception that a legal battle will cast a negative shadow on Vonage's reputation with customers and shareholders. But this appears to be the smallest of the problems facing the company. Through cost savings, the Vonage hopes to stay afloat long enough to save its business and win its appeal against Verizon. Whether or not this happens remains to be seen, but this stock is definitely one to watch in the meantime!

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Countrywide Financial (NYSE:CFC) shares dropped over 20 percent yesterday after the company filed its quarterly 10-Q statement with the SEC containing a modified "risk factors" section. The regulatory filing indicated that the company was facing "unprecedented disruptions" in debt and mortgage-finance operations that could hurt future earnings and the company's financial condition.

The largest U.S. home mortgage lender by volume said that reduced demand from investors for its mortgage securities is causing them to retain more loans instead of selling them. Perhaps most interestingly, the company openly admitted that it has no idea where the situation is headed or how it could affect the company in the future. The reduced demand from investors means that prices are being pressured down despite fundamental valuation. As a result, it is nearly impossible to accurately value the mortgage portfolio.

As a result, Countrywide said that it transferred $1 billion of its subprime mortgages from "held for sale" to "held for investment" while also marking down the value of the loans to $800 million. Meanwhile, evidence is piling up supporting the notion that this market is in trouble. Payments that were 30 days late spiked to 20% from 14% last year while delinquency rates spiked to 3.7% from just 1.5% a year earlier.

In the end, if this credit crunch passes by and people end up continuing to purchase subprime mortgage loans, it could pay off nicely for Countrywide. However, predicting where the market is headed at this point is rather futile as the problems seem to continue to worsen.

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CBRE Realty Finance (NYSE:CBF) shares dropped $1.21, or 19.48%, to $5.00 after the company announced disappointing second quarter results. The commercial real estate specialty finance company has been suffering amid the mortgage crisis, but appears to be substantially undervalued even given the risks that it faces.

CBRE announced that it was forced to write-down $7.8 million on one of two foreclosed assets but insists that the company is still trading more than 50% below its book value. The company's current assets include $211 million in CDOs, $75.8 million in Joint Venture Equity, $54.6 million in foreclosed assets, $72.9 million in warehouse lines, and $42.4 million in cash. If we subtract out $61.5 million in Trust Preferred Securities, we come up with a total net value of $395.7 million.

Based on the current market price, these assets are being priced a more than $205 million below their estimated book value. Even discounting the foreclosed assets division and some of the potentially-risky CDO's the company would still be undervalued! But in reality, the strong fundamentals in the commercial real estate market have many believing that the company is substantially undervalued. This makes CBF a stock worth watching!

Beazer Homes (NYSE:BZH) shares dropped $2.71, or 19.37%, to $11.28 after rumors surfaced that the Atlanta homebuilder was preparing to file for bankruptcy. The speculation comes amid worries about homebuilders being able to pay their bills as subprime and variable rate mortgage worries weigh done on the entire housing sector.

Beazer Homes also announced last week that it was under federal investigation in North Carolina for certain company practices. The homebuilder also swung to a loss in the third quarter after cutting prices to help sales and took on major charges to write down the value of unsold inventory. While the situation looks bleak, the company called the bankruptcy rumors "scurrilous and unfounded", telling investors to refer to its third-quarter financial statements for "an accurate representation of the company's financial condition.

Clearly there are some major problems facing the mortgage and homebuilding markets as delinquencies continue to rise while housing prices fall. However, such speculation can also pave the way for cheap stocks for companies able to weather the storm. After all, who can forget how Equity Office Properties was formed back in the 1980s? On the crash of the commercial real estate market after the S&L bust.

Savvy investors able to see through the smoke and mirrors will surely be able to profit from these similar situations. Whether or not BZH turns out to be one of these situations remains to be seen, but it is definitely a stock worth watching!

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