WCI Communities, Inc. (NYSE:WCI) moved up $2.59, or 12.32%, to $23.61 in early trading today after Carl Icahn disclosed a 14.57% stake in the company in a Schedule 13D filing with the SEC. Icahn said that he believed the company's shares were undervalued and that he intends to seek the company's views on how to unlock the inherent value of the shares. The news comes after Hotchkis and Wiley Capital Management LLC, a 16% holder of the company, said that they intend on engaging in talks "about its business and affairs which may include discussing the structure of management and the board of directors" earlier this month.

The company is trading well below enterprise value with a PEG of just 0.38, which makes the company appear extremely undervalued on the surface. But in reality, WCI continues to face difficulties with its land and projects; its Oceanside project is dead while the company is still struggling with business in the Miami condo market. And with only 140 orders last quarter, many investors are questioning whether a turnaround is possible, even with one of the best marketing forces in the business. However, Icahn is certainly one of the best in the business, which is evidenced the stock's sharp move today. Whether or not he is successful in turning around the company - or even something more drastic like forcing a sale - depends on many factors; but regardless, this is certainly a stock to keep on the radar as we learn more.

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