Pirate Capital LLC recently released a 13F filing showing its holdings, which have been significantly decreased since the hedge fund's shakeup back in October when it failed to disclose its sale of OSI Restaurants in a timely matter. More recently, the fund announced that it sold its 4.8 million share stake in Mirant Corporation (NYSE:MIR). A list of Pirate Capital's holdings as of September 30, 2006 can be viewed in their latest 13F filing with the SEC.

Here are some of their largest holdings:

1. Intrawest Corp - This is a company in which Pirate has over $300 million invested, and it is finally paying off. Intrawest's board agreed to sell the company to Fortress Investment Group for $35 per share in cash. Mr. Hudson said, "We commend the Board of Directors and the Executive Management for conducting the broad and thorough strategic review that resulted in the sale of Intrawest. We would like to congratulate the Board and Management for delivering value to their shareholders." Pirate was a buyer between $26 and $30 per share, making them a significant winner on this play.
2. The Brink's Company (NYSE:BCO) - This is a company in which Pirate has over $209 million invested. Recently, on November 11th, Pirate encouraged the company to explore a sale, start a large Dutch tender offer for its shares, and immediately appoint Pirate founder Thomas Hudson to its board; however, the company still appears to be ingoring their requests and pursuing an acquisition instead. It was after this that the hedge fund angrily noted, "We are concerned that shareholder propositions are falling upon deaf ears" and submitted proxy materials in a recent 13D/A filing in a move to bring the issue to shareholder attention.
3. Walter Industries (NYSE:WLT) - This is a company in which Pirate has over $135 million invested. The company moved up today after it resolved a lawsuit involving CC Arbitrage Ltd. and CNH CA Master Account L.P., who agreed to dismiss all claims, and immediately convert their convertible senior subordinated notes to the company's common stock. In this case, Pirate successfully convinced the company to spin-off its whole-owned Mueller subsidiary back in May of 2006. Meanwhile, the hedge fund recently cut its stake and remained silent. Other objectives it had on the table since its last filing in October of 2005, included the sale of its other Finance and Homebuilding subsidiaries. However, the multiples for these sectors are not high enough at this time to justify a sale.

As you can see, the process of unlocking shareholder value can take a lot of time and has no certain outcome. However, when it does work - as in the case of Intrawest - handsome profits can be made. And with over $1.4 billion invested, Pirate Capital is one of the best activist hedge funds to keep an eye on!

Home Depot (NYSE:HD) may be seeing some private equity interest according to reports on CNBC. There is speculation that the company could go for as much as $100 billion, although many analysts remain skeptical. Charlie Gasparino reported that KKR has already crunched the numbers for a potential bid to take the company private, while there is also talk of other potential HD bidders on the floor. The interest comes after the stock has fallen from a high of nearly $45 in early 2006 to its current levels around $35 per share, down over 8% on the year.

Many attribute this drop to poor performance by the company's CEO Nardelli along with declining market conditions. Meanwhile, their main competitor - Lowes - has beat the company on almost every metric. Lowe's revenues grew 130% compared to HD's 78%; Lowe's ROA increased 52% while HD's hardly increased at all; and finally, Lowe's customer service rating rose to 78 from 75, while HD's decreased to 67 from 75 during the same time period. Combined, market conditions and poor management may have made this stock cheap enough for private equity to seriously consider. This makes Home Depot a stock to keep an eye on over the next few months.

Related Companies
Lowes Companies, Inc. (LOW)
Conn's Inc. (CONN)
Building Materials Holding Corporation (BMHC)

Tribune Company (NYSE:TRB) announced yesterday that it would be extending its strategic review process, saying the committee would be prepared to make a final recommendation to the board in the first quarter of 2007. Reuters is reporting that three private equity groups have made a bid for the company, including a group consisting of Texas Pacific Group and Thomas H. Lee Partners and another that includes Madison Dearborn Partners, Providence Equity Partners and Apollo Management, and Bain Capital. Other interested parties include: the Carlyle Group, billionaires Eli Broad and Ron Burkle, Maurice Greenberg of AIG, and several others.

The company said that it is seeking a single buyer for its television and newspaper units. With all of this interest, the company is in a great position to sell off its company at a substantial premium to the current prices. To date, the company has sold approximately $450 million of non-core assets. This is definitely a company to watch closely as this situation unfolds.

Related Companies
Washington Post Co. (WPO)
Gannett Co., Inc. (GCI)
CBS Corporation (CBS)

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NDAQ:OMAB)
S-1 Filing with the SEC
Mexican airport operator Grupo Aeroportuario del Centro Norte, commonly known by its trade name OMA, began trading today. The stock opened higher than predicted, at $22.08 after pricing at $18.00, above the expected $14.50 to $16.50 range. Grupo Aeroportuario del Centro Norte operates thirteen international airports in nine states of central and northern Mexico. OMA's airports also serve Monterrey, Mexico's third largest metropolitan area, a few tourist destinations, and nine other regional centers and border cities.

The New York Times Company (NYSE:NYT)
SEC Filing Watchlist
The New York Post reported today that Greenberg has made an effort to buy a controlling stake in the New York Times, in order to break the Sulzberger family's control of the company. Later, Greenberg's spokesman said he has no intentions of increasing his stake beyond his 100k shares; nevertheless, CNBC's Charlie Gasparino's follow-up reports on the story moved NYT up 7.5% in today's trading.

Wireless Ronin Technologies, Inc. (NDAQ:RNIN)
SB2-A Filing with the SEC
Shares of Wireless Ronin Technologies, a digital signage company, soared 57% today on its second day of trading with a volume of 5.5 million shares. Strangely, this move comes after the stock IPO'd yesterday at $4 per share, where it closed at $4.58 on volume of 1.6 million shares.

Cyberonics, Inc. (NDAQ:CYBX) holder Metropolitan Capital Advisors demanded today that director Kevin Moore immediately be removed from the company's board, calling his position a "glaring violation of law and appropriate corporate governance practices". The move was backed by the Coalition of Concerned Cyberonics Shareholders, who collectively own 7.33% of the company. According to a letter filed with the SEC:

"'Given Mr. Moore’s longstanding close friendship with Robert Cummins — dating back to their days at Dartmouth together in the 1970’s —we are particularly disturbed that Mr. Moore, who we believe was not lawfully a Member of the Board, served on the Board’s Compensation and Nominating and Governance committees and participated in the decision to not only approve the new compensation package for Mr. Cummins in 2005, despite the existing contract having nearly three more years left to run, but his severance package as well,' Karen Finerman and Jeffrey Schwarz of MCA said.

According to the Company’s public filings, Cyberonics entered into a March 28, 1997 letter agreement (the "Letter Agreement") with the Clark Estates that, upon closing of its pending investment in the common stock of Cyberonics, entitled the Clark Estates to designate one member to the Cyberonics Board to serve for as long as the Clark Estates retained at least 600,000 of the 901,408 shares of the Company that it purchased on that date. Purportedly pursuant to this provision, approximately seven years later Mr. Moore was appointed to the Company’s Board on January 13, 2004 and has remained on the Board since then, despite not standing for election at the Company’s 2004 or 2005 annual meetings of shareholders. Mr. Moore’s purported status as a perpetual director of the Company, however, violates the Letter Agreement, the Company’s bylaws and the Delaware General Corporation Law.

Given that the Company is not, and could not be, contractually bound to allow Mr. Moore to serve as a director despite not being elected by the Company’s shareholders, MCA demands that the Company immediately relieve Mr. Moore of his position as director and that he return the fees and stock options he was awarded during the period when he was improperly serving as a director. If the Company fails to take such action within 10 business days, Metropolitan Capital Advisors, Inc. and The Committee for Concerned Cyberonics Inc. Shareholders will bring an action in the Delaware Court of Chancery to compel it to do so." (Read More)

Just recently, the coalition succeeded in ousting ex-CEO Robert Cummins; however, he was awarded a generous severance package due to Moore and others close to him that serve on the compensation committee. After the removal of the director, the coalition plans to locate a new CEO which it hopes will help turn the company around. This stock is definitely one worth watching as corporate governance is improved and changes are made to help the company turn itself around.

Related Companies
Medtronics, Inc. (MDT)
Biomet, Inc. (BMET)
Steris Corporation (STE)

The Pep Boys - Manny, Moe & Jack (NYSE:PBY) is seeing increasing interest from activist hedge funds Pirate Capital and Barington Capital, who both disclosed transactions as recently as November 21 in 13D/A filings with the SEC. Pirate disclosed that it now owns 11.7% of the company and has succeeded in installing Mr. Hudson on the company's board of directors. Meanwhile, Barington has amassed a 9% stake in the company, but gave no further details. Although their most recent 13D/A filings do not disclose any specific plans, both of these hedge funds are well known for unlocking shareholder value in the short-term through changes made to capital structure, special dividends, and outright sale of the companies they take over. This makes Pep Boys a stock to keep a close eye on in the coming months.

Related Companies
Advance Auto Parts, Inc. (AAP)
AutoZone, Inc. (AZO)
CSK Auto Corporation (CAO)

Dollar General Corp. (NYSE:DG)
SEC Filings Watchlist
Merger Market analyst Josh Kosman told CNBC that the private equity firms Cerberus Capital and Bain Capital are both pursuing Dollar General Corp. However, it is unclear whether the Fortune 500 discount retailer is interested in selling to either of the two firms. Dollar General has over 8,000 stores nationwide.    
   
Harrah's Entertainment Inc. (NYSE:HET)
SEC Filings Watchlist
David Faber of CNBC stated that there is an additional bid out for Harrah's Entertainment Inc. by the Penn National Gaming Inc. (NDAQ:PENN) group, including DE Shaw, Lehman Brothers, and Wachovia. Harrah's is already mulling over a bid from Apollo Management Group and the Texas Pacific Group, which stands at $83-$84 per share. It is uncertain whether or not this additional bid is being considered.

Artes Medical (NDAQ:ARTE)
S-1 Filing by the Company
In a S-1/A filing with the SEC, Artes Medical said it is predicting an IPO price of $12-$14 per share on 4.6 million shares. The medical technology company plans to list on the Nasdaq under the symbol "ARTE".  Artes Medical develops, manufactures, and commercializes a new category of injectable aesthetic products for the dermatology and plastic surgery markets.

Interactive Brokers Group, Inc. (NDAQ:IBKR) will be the next major financial IPO to watch, as it filed its S-1 registration statement with the SEC today. This latest IPO comes amid heavy M&A activity, a great IPO market, and strong performance by many players in the financial sector - particularly exchanges and investment banks.

Their S-1 filing with the SEC gives more details about the company:

"We are an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures and foreign exchange instruments as a member of more than 60 electronic exchanges and trading venues around the world. Since our inception in 1977, we have focused on developing proprietary software to automate broker-dealer functions. The advent of electronic exchanges in the last 16 years has provided us with the opportunity to integrate our software with an increasing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.

Our high degree of automation enables us to process approximately 500,000 trades per day with approximately 500 employees. During 2005 and for the nine months ended September 30, 2006, we generated pretax income in each period at a rate of more than $1 million per employee. Publicly available data regarding other companies in the securities and commodities industry indicate that this level of productivity is unparalleled for our industry. Automation has allowed us to become one of the lowest cost providers of broker-dealer services and to increase significantly the volume of trades we handle. According to data compiled by the Futures Industry Association (FIA) based on data received from exchanges worldwide, during the nine months ended September 30, 2006, we accounted for approximately 16.0% of exchange-listed equity options volume traded worldwide and approximately 18.8% of exchange-listed equity options volume traded on those markets in which we actively trade. We were the number one or number two liquidity provider on each of the three largest U.S. options exchanges (the Chicago Board Options Exchange, the International Securities Exchange and the Philadelphia Stock Exchange) during the nine months ended September 30, 2006, according to rankings provided by these exchanges. We serve sophisticated and active customers worldwide, including institutional investors, financial advisors, brokers and individuals." (Read More)

Given the M&A activity in the overall market (and especially the financial sector), this IPO may see significant interest and upside. Moreover, as such a prominent player in providing liquidity, it may be a takeover target for either another broker or even an exchange interested in diversifying its revenues. The high degree of automation in this company also makes it extremely capital efficient and profitable on its own. Combined, this company is definitely worth watching as a takeover target as well as a strong independent company.

The recent wave of M&A activity by private equity has caused a lot of speculation on the street as to who's next. A Barrons article over the weekend listed several LBO targets that analysts are currently watching. Here's a list of the companies mentioned:

Oil/Energy Companies

• Apache Corporation (NYSE:APA)
• Valero Energy (NYSE:VLO)
• Hess Corporation (NYSE:HES)
• Transocean, Inc. (NYSE:RIG)

Consumer Product Companies

• Kimberly Clark Corporation (NYSE:KMB)
• Estee Lauder Companies Inc. (NYSE:EL)

Homebuilder Companies

• KB Home (NYSE:KBH)
• DR Horton, Inc. (NYSE:DHI)
• Lennar Corporation (NYSE:LEN)
• Toll Brothers, Inc. (NYSE:TOL)
• MDC Holdings, Inc. (NYSE:MDC)
• Hovnanian Enterprises, Inc. (NYSE:HOV)

Technology Companies

• Linear Technology Corporation (NDAQ:LLTC)
• Maxim Integrated Products, Inc. (NDAQ:MXIM)
• Analog Devices, Inc. (NYSE:ADI)
  
• Altera Corporation (NDAQ:ALTR)
• Xilinx, Inc. (NDAQ:XLNX)

With a record $350 billion in deals this year alone by private equityy, many more acquisitions may lie ahead. These are some stocks to watch in the event of future leveraged buyouts; any such acquisitions would likely come at significant premiums to the current market price.

Here are some of the takeover targets mentioned in the media today:

• Allstate (NYSE:ALL) was mentioned by the Chicago Tribune - quoting a Morgan Stanley report - as a potential financial-services consolidation play.
• Armor Holdings (NYSE:AH) was mentioned in BusinessWeek's Inside Wall Street column as a potential takeover target for Lockheed Martin (NYSE:LMT).
• Boyd Gaming (NYSE:BYD) was also mentioned in BusinessWeek's Inside Wall Street column as a possible gaming consolidation play after Harrah's and Aztar recently closed such transactions.
• Sangamo (NDAQ:SGMO) was also mentioned in BusinessWeek's Inside Wall Street column as the next biotech takeover, with partnerships already in place with Pfizer and Dow Chemical.
• Technip (NYSE:TKP) was mentioned in La Tribune (a French newspaper), which stated Italian oil company Eni SpA may make a bid for the company.

Strong corporate performance and favorable economic conditions have spurred record M&A numbers this year. Until conditions change this trend is likely to continue, particularly in financial services and gaming. As a result, these stocks are definitely ones worth watching as any buyout would come at a significant premium to the current market price.