Ultra Petroleum Corp. (AMEX:UPL) -- UPL is down from a high of over $70 per share ealier this year to its current levels of around $48. Despite this drop, the company is still currently trading above enterprise value with a PEG of 1.21, which is slightly below the industry average.

CNX Gas Corporation (NYSE:CXG) -- CXG is a new public company trading nearly even since its IPO, currently sitting around $25 per share. The company is trading above its enterprise value, but has a PEG of around 0.98 - lower than the industry average.

XTO Energy Inc. (NYSE:XTO) -- XTO has been rangebound throughout this year, currently trading around $47 per share. The company currently trading well below enterprise value with a PEG of just 0.66 - substantially lower than the industry average. This makes XTO one of the cheapest companies in the oil and gas sector.

EOG Resources, Inc. (NYSE:EOG) -- EOG is off its 2006 highs of around $80 per share, currently standing at $63 per share. The company is trading just about at enterprise value with a PEG of 1.33.

Range Resources Corp. (NYSE:RRC) -- RRC is currently trading above the major moving averages at around $27 per share. The company is trading below enterprise value with a PEG of right around 1.15, making it a relatively attractive company from a value perspective.

Occidental Petroleum Corp. (NYSE:OXY) -- OXY is currently trading above its yearly lows of around $40 per share, currently sitting at close to $60 per share. The company is trading slightly below enterprise value with a PEG of 1.09.

China Netcom (NYSE:CN) moved up more than 14% today on rumors that the company could be bought out by China Unicom (NYSE:CHU), even though both companies immediately dismissed claims of negotiations between the two companies. Meanwhile, the broader Hong Kong market also continued its rally, moving to record highs today. Many attribute these moves to recent rallies in the Chinese domestic market combined with new favorable tax policy that would institute a unified flat tax rate of 25% for foreign and domestic companies.

Other stocks experiencing a rise in recent weeks include China Life (NYSE:LFC), Ping, The Industrial and Commercial Bank of China, and many others on the HK exchanges. Overall, Chinese companies (and their ADR counterparts trading on the NYSE) continue to perform extremely well.

ProQuest Company (NYSE:PQE) may get some much needed turnaround help after the Shamrock Activist Value Fund disclosed a 6.6% stake in the company. The activist hedge fund gave few details as to its plans in its intial 13D filing with the SEC; however, the fund has traditionally taken an active stance in its investments when appropriate. This event is significant because it is an initial sign of buying by a knowledgeable hedge fund while the company its near its 52-week low.

ProQuest Company is a publisher of information solutions for the education, automotive and power equipment markets. The Company provides products and services to its customers through two business segments: ProQuest Information and Learning (PQIL) and ProQuest Business Solutions (PQBS). PQIL is a provider of content to schools, academic institutions and public libraries while PQBS develops and deploys parts and service information products, and dealer performance applications for the automotive market. The company has suffered through 2006, dropping from a high over $30 per share to its current levels of around $10 per share. This comes after the company has experienced heavy losses and an ongoing accounting investigation, which could result in restatements from fiscal years 2001 to 2004. While these restatements have yet to be published, the company said that it expects earnings to be substantially lower.

So, is PQE a buy at these levels? Well, the company did recently sell off its business solutions division for over $500 million, which will give the company a boost in cash and allow it to focus on its core competencies. Moreover, Shamrock's involvement with the company will likely result in a faster turnaround and better returns for investors. And many argue that the drop from $30 to $10 is a deep enough discount to justify the risks associated with the retracement; however, without specific numbers, it is impossible to come up with a solid valuation. Consequently, it may be best for investors to wait on the sidelines for the retracement numbers before investing.

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Sempra Energy (NYSE:SRE) increases their 2006 EPS guidance, to exceed $4 per share. The increase from the previous per share estimate of $3.50 to $3.70 is due primarily to increased profitability at its commodities business. The consensus stands at $3.66.

InfoSonics (NDAQ:IFON) shares are trading higher, almost 44% today, after announcing the company will be distributing handsets for LG Electronics in the Caribbean and select countries in Latin America. InfoSonics has already received approval, certification and purchase orders from carriers in the region and will be delivering its first shipments in the coming weeks.

Inverness Medical Innovations, Inc. (Amex:IMA) and The Procter & Gamble Company (NYSE:PG) have signed a definitive agreement to form a 50/50 joint venture for the development, manufacturing, marketing and sale of existing and to-be-developed consumer diagnostic products outside of the fields of cardiology and diabetes. Both stocks were up today.  

Cadmus Communications Corporation (NDAQ:CDMS) and Cenveo, Inc. (NYSE:CVO) have entered into a definitive merger agreement for Cenveo to acquire Cadmus in an all-cash merger at a price of $24.75 per share. The total value of the transaction, including Cenveo's assumption of Cadmus' debt, is expected to be approximately $430 million at closing.

BigBand Networks, Inc. (NDAQ:BBND) filed a registration statement with the Securities and Exchange Commission today for a $140 million initial public offering. Given the strong IPO market recently, this stock is definitely one worth tracking into 2007. While the company still hasn't provided a pricing range or other related information, we did get a history of the company as well as an overview of the market in which they operate.

According to the S-1 filing:

"We develop, market and sell network-based platforms that enable cable operators and telephone companies, collectively called service providers, to offer video, voice and data services across coaxial, fiber and copper networks. We have significant expertise in rich media processing, communications networking and bandwidth management. We have delivered what we believe to be the only successful commercial deployments of switched broadcast, an application that substantially increases the volume of content that a service provider can offer. In addition, we were the first to implement what we believe has become the industry’s de facto network architecture for digital simulcast, an application that facilitates the insertion of advertising and the transmission of video in a digital format across a network while still providing service to analog subscribers. Our product applications of Digital Simulcast, TelcoTV, Switched Broadcast, and High-Speed Data and Voice-over-IP are a combination of our modular software and programmable video and data hardware platforms.

Our software and hardware product applications are used by leading service providers worldwide to offer video, voice and data services to tens of millions of subscribers, 24 hours a day, seven days a week. We have sold our product applications to more than 100 customers globally, including Cablevision, Charter, Comcast, Cox, Time Warner Cable and Verizon, which are six of the ten largest service providers in the United States. Our net revenues increased 59.6% to $113.6 million for the nine month period ended September 30, 2006 from $71.2 million in the same period in 2005. We achieved our first quarter of profitability in the three months ended September 30, 2006.

Service providers derive most of their revenue from consumer subscriptions and advertising. Service providers are increasingly bundling disparate video, voice and data services into integrated offerings, also known as “triple-play” services. Video is the most technically demanding, provides the richest user experience and currently offers the greatest revenue per subscriber of the triple-play services. As of December 2006, Yankee Group Research estimates that, on average, consumers spend per month $68 for digital video services compared to $47 for voice and $33 for data services.

Competition to deliver video, voice and data services has fueled recurring cycles of network investment as service providers seek to capture increasing revenues by offering additional services. Regulatory, technological and competitive factors are leading service providers to increasingly compete against one another for consumer subscription and advertising revenues. For example, cable operators have added approximately eight million voice-over-IP subscribers, while telephone companies are investing in video, such as Verizon’s announced plan to upgrade its fiber-optic network for video and data services at a cost of $18 billion. In addition to competing among themselves, service providers are facing competition from Internet and media companies, such as ABC.com, Apple Computer, Google and Yahoo, which use the Internet to deliver video content and advertising directly to consumers.

To differentiate their video, voice and data services from the competition, service providers are beginning to develop differentiated video offerings that more directly respond to consumer demand for more personalized and richer content, a higher quality experience and greater ease of access to this content. For example, subscribers are demanding more high definition television, or HDTV, and gaining more control over their consumption of video content through video-on-demand, or VOD, technologies. At the same time, advertisers are increasingly demanding that video-based advertising deliver more relevant ads with the interactivity to measure return on ad spending comparable to ads placed on the Internet. The need to respond to consumer demands for richer, more accessible and more relevant content, and advertisers’ demands for increased interactivity, is forcing service providers to improve their networks.

Current service provider networks are not well suited to deliver the entire triple-play bundle of services and relevant advertising. In particular, these networks lack sufficient bandwidth necessary to deliver rich video services such as HD programming and lack the interactivity and ability to tailor programming and advertising to subscribers. As a result, a simple expansion of network capacity is not likely to meet these challenges, and there is a need for platforms designed primarily for reliable and cost-effective video delivery, which in turn will enable the entire triple-play offering. The rapidly changing trends in consumer demands and advertiser requirements, coupled with the competitive environment, are forcing service providers to develop more intelligent, extensible networks to provide these advanced services, enable increasingly relevant advertising and make more efficient use of available network capacity." (Read More)

It is worth noting that the cable industry (this company's customers) have been performing well during the past few quarters, and are expected to outperform the general market into 2007. These companies have also reported record amounts of cash, enabling them to strategically purchase companies that interest them. While this company wouldn't make a core acquisition for any of these companies, it does remain a possibility. Combined, these factors make BBND a stock worth watching in 2007.

Shanda Interactive (NDAQ:SNDA) moved higher today as rumors surfaced that Google, Inc. (NDAQ:GOOG) was interested in acquiring Chinese literature site, Qidian (www.cmfu.com), owned by SNDA for between $400 and $600 million. This news comes after several tech acquisitions by search and media giants Yahoo, Google, and eBay in 2006. While both companies declined to comment, this is certain a story worth watching closely as a $400M+ acquisition would account for around a quarter of the company's current market cap. The stock is currently trading up 6.5% on the news.

Shanda Interactive Entertainment Limited (Shanda Interactive) is an interactive entertainment company and an operator of online games in China. In addition to the Company's portfolio of online games that users play over the Internet, it provides users with access to additional content and services through Shanda Interactive's EZ Center platform, including literature, music, movies, radio, finance, e-commerce, travel, news and educational programs.

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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.

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Parlux Fragrances Inc. (NDAQ:PARL) may soon find itself in trouble as 12.2% holder Glenn H. Nussdorf disclosed he filed a preliminary consent statement in a 13D/A filing with the SEC today. This move comes after several attempts by the activist investor to institute changes within the company. While no additional details were provided in this filing, Nussdorf did outline his plans in past filings with the SEC. According to his initial 13D filing with the SEC:

"As the beneficial owner of a substantial percentage of the outstanding shares of Parlux, I believe that much can be done to increase shareholder value and that it is time for immediate change at both the Board and management levels. The decline in the Company's share price from a high closing price of $18.96 earlier this year (after adjusting for a 2-for-1 split in June 2006) to the current $6.26 level (a decrease in shareholder value of 67%), the Company's recent disclosure of decreased sales and earnings for the quarter ended September 30, 2006, and the allegations in the recently amended class action lawsuit that the Company improperly recognized revenues on sales to related parties, have led me to conclude that the Board of Directors is failing to act in the best interests of the Company's shareholders and is not exercising appropriate oversight of management. I am convinced that a continuation of the status quo risks a further destruction of shareholder value and, accordingly, I intend to protect the value of my significant investment in the Company through a consent solicitation to replace members of the Board of Directors.

As I have publicly disclosed in my Schedule 13D filing, I am exploring the possibility of making an acquisition proposal to acquire the Company in a business combination transaction. While I have not made a decision at this time whether to pursue such a proposal, I strongly urge the Board not to take any action (such as the previously announced and subsequently abandoned sale of the Perry Ellis brand) which would materially modify or impact the Company's business, products or assets and could adversely effect the Company's value. In addition, the consent solicitation will present Parlux shareholders with a unique opportunity to express their views on the future direction of the Company." (Read More)

Clearly, Nussdorf's most recent move indicates his continued conviction as to the company's intrinsic value. While he failed to give additional details as to his recent plans, he did indicate in the past that he would be seeking to replace the board (which is happening now) and would consider placing a bid to take over the company. Given the strong M&A market and the continued depressed PARL prices, this remains a possibility. This makes PARL a stock worth watching over the next few months.

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InFocus Corporation (NDAQ:INFS) shareholder Caxton Associates revealed that they increased their stake in the company from 8.9% to 9.9% in a 13D/A filing with the SEC. The activist hedge fund has long maintained that the company's intrinsic value and buyout prices are substancially higher than the current market prices. Although this filing gave no additional details, the fund did outline its argument in their intial October 13D filing:

"The Reporting Persons believe that the intrinsic value of the Company, and the amount a strategic or financial buyer would pay to acquire the Company, is significantly greater than the current market value of the Common Stock.  The Reporting Persons believe that this gap in value has resulted from the implementation by the Company's Board of Directors (the "Board") of a flawed business plan that has been detrimental to shareholder value. The Reporting Persons accordingly believe that the following steps should be taken promptly in order to preserve and maximize shareholder value:

1. The Reporting Persons believe that the Company's poor performance is the result of mistakes made by management and the Board's failure to grasp the strategic realities of the environment in which the Company operates.  At this time, we believe that the Company's operating management is capable of effectively executing the Board's strategic vision should it be given adequate guidance and oversight.  We do not, however, believe that the Board, as currently constituted, is providing the necessary strategic thinking.  Therefore, we believe that, unless significant changes are made promptly, changes in the Board are in the best interests of all shareholders.

2. The Board should include individuals with strong ties to large shareholders, as well as industry, legal and/or financial markets expertise, which have a firm grasp of the realities of the markets in which the Company operates.  Unless significant changes are made, the Board should be restructured to consist of Mr. Ranson, at least two individuals drawn from among the Company's largest shareholders, and other independent directors with relevant industry backgrounds.

3. As part of the Company's announced exploration of strategic alternatives, the Board should develop an operating strategy that not only protects and enhances the hard asset value of the Company, but also will allow the Company to be cash flow positive under any foreseeable circumstances.  The Board should immediately work with management to develop a business plan that, among other things, permits revenue growth only at a reasonable cost, fixes or exits money-losing operations, and leverages the Company's valuable brand name franchise and considerable intellectual property assets.  This new business plan should be assessed against other available alternatives, including the possibilities of a sale or restructuring of the Company.

The Reporting Persons continue to examine all of their options with respect to the possibility of taking actions that they believe will enhance shareholder value, including the option of actively seeking to replace members of the Board." (Read More)

While Caxton did not issue any additional comments, the fund's buying does indicate that it is still committed to unlocking shareholder value. Since their intial involvement with the company's the stock has been nearly flat, while the board's reponse to the fund's demands have been limited. Consequently, the possibility remains that the company could seek to replace members of the board. This makes INFS a stock worth watching over the next few months.

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TLC Vision Corp. (NDAQ:TLCV) may find itself in hot water soon after one of its largest holders changed its filing status from 13G to 13D, indicating a more activist stance. Sowood Capital Management, an 8.1% holder in the company, filed a 13D today stating that they are "filing this Schedule 13D because Sowood anticipates seeking to engage in discussions with management of the Issuer." This news comes as the company's stock has moved down from $7 per share in early 2006 to a low of $4 per share just a few weeks ago. Clearly, changes are needed in this company and shareholders are betting that Sowood has the answers, as the stock moved up over 5% in early morning trading today. While we do not know any details, this is definitely a stock worth watching in the next few months.

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