CSK Auto Corporation (NYSE:CAO) shares moved up $0.28, or 1.62%, to $17.54 today after Karsch Capital Management disclosed a 9.4% stake along with a letter in the company in a Schedule 13D/A filing with the SEC. The activist hedge fund said in a letter that it believes that the company's shares are undervalued at their current market level and believes that the company should actively pursue a sale once it has completed its pending restatement of certain of its past financial statements and becomes current with its SEC reporting obligations. Karsch had first insisted on hiring an investment banker back in October of last year and later attempted to add its own candidates to the company's upcoming proxy. However, CSK has since informed the SEC that it does not intend to voluntarily include Karsch Capital's stockholder proposal in its proxy materials for the next annual meeting of stockholders and has asked the SEC to confirm that it would take no action against the company if it does so.

Yesterday, the hedge fund sent another letter to the company asking when they would finish restating earnings to satisfy the SEC and asked that the company immediately put itself up for sale after the process was completed. According to their latest letter attached to their most recent Schedule 13D/A filing with the SEC:

Since our last letter to the Board dated October 23, 2006, we have received numerous inquiries about CSK Auto that lead us to believe that there is genuine interest from private equity firms in acquiring the Company and from investment banks in financing a transaction for a prospective buyer.  Now that the company has stated that it expects that it can file its financial statements no later than one month beyond the February 28, 2007 date set by the SEC, we have received numerous indications that potential acquirers would prefer to conduct their due diligence investigation of the Company now and thereby be in a position to make an acquisition proposal at or shortly after the date the Company files its financials.

Further, while we understand that the Board, for business reasons, may not wish to allow competitors and other potential strategic buyers access to sensitive business information, hiring a nationally-recognized investment bank to run an auction process appropriately mitigates such considerations and such considerations are not applicable to financial buyers.

The debt capital markets are very strong right now.  By putting the Company up for sale immediately, we believe the Board would increase the probability of a
transaction given these current robust capital markets.  We strongly feel that this would be the best course of action to maximize shareholder value.

Given the continued strength of the M&A market - particularly by private equity - along with the substantial discount that this company is trading at due to their restatements, a sale of CAO could come at a substantial premium to the current market price. If Karsch is not successful in convincing management to take this step on their own, they may be forced to attempt to take control via a proxy fight. While this process is somewhat uncertain and time consuming, CAO is definitely a stock that is worth watching over the next few months!

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JetBlue Airways Corporation (NDAQ:JBLU) shares moved up $0.43, or 3.33%, to $13.33 today after falling sharply at Tuesday's open. The company remains positive that it will be able to rebound from weather-related troubles that it had earlier this week that caused around 1,000 flights to be delayed. Founder and CEO Dave Neeleman has already estimated the damage at more than $30m in lost revenue and free flights, and unveiled a "passenger bill of rights" plan in an effort to lessen the brand damage. The $30m charge will affect the quarterly earnings - swinging them to a loss - but will have little impact on the full-year earnings forecast. Moreover, Neeleman said that the new compensation scheme – which promises a sliding scale of refunds and free flights depending on the severity of delays – would act as a marketing tool and "pay for itself". The way JetBlue handled this situation and got itself back on track today says a lot about their management ability. Moreover, the impressive growth that the company has experienced along with the recent upgrade make JBLU a stock that is definitely worth watching.

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Natural Health Trends Corp. (NDAQ:BHIP) shares moved down another 5% today after several shareholders expressed their dissatisfaction with the company's current management. The ~4% shareholders filed a Schedule 13D/A with the SEC, and outlined their complaints in the Purpose of Transaction section:

The Reporting Persons no longer have trust or confidence in the Issuer's President, Chief Executive Officer and board member, Ms. Stephanie Hayano, and intend to work towards securing her dismissal or resignation from those positions at the earliest possible moment. The Reporting Persons believe that the Issuer's current difficulties can be attributed, for the most part, to Ms. Hayano's lack of industry experience. The Reporting Persons are of the view that Ms. Hayano does not understand the Japanese and Mexican markets in which the Issuer does business and, therefore, is unable timely to resolve direct selling issues in those markets. These two factors, the Reporting Persons believe, have significantly contributed to the declining revenues in the Japanese and Mexican markets. The Reporting Persons are also of the opinion that Ms. Hayano's failure to provide adequate leadership and management during this critical juncture may lead to a substantial decrease in the number of the Issuer's active distributors. Finally, the Reporting Persons are concerned that Ms. Hayano intends to either pull money out of the Issuer's Chinese subsidiary, which may cause a deficiency in that entity's capitalization and ultimately force it to de-register in China, or sell the Issuer's Greater China business at a fraction of its value. Either move may, in the view of the Reporting Persons, destabilize the Issuer's entire global seamless network of independent distributors. The Reporting Persons fear that, because Ms. Hayano lacks industry experience, she does not understand the possible implications of either action.

Clearly the company is facing problems as it continues to move down and most of these problems can be traced back to the company's Chief Executive Officer. With a stock that is down roughly 80% since 2006 - after the company was subjected to a formal SEC investigation as well as related class action lawsuits - there may be support for their proposal to remove members of management. This makes BHIP a stock worth watching over the next few months.

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Wilshire Enterprises (AMEX:WOC) shares remained even in early trading today after Bulldog Investors disclosed a 14.87% stake in the company and announced their intent to nominate two of their own candidates to the company's board of directors. The activist hedge fund also said that it plans to propose that WOC's investment banker immediately conduct an auction to sell the company to the highest bidder. Bulldog believes that the company's shares are undervalued and hopes to unlock shareholder value through a sale process. The only major obstacle is a poison pill that the company has in place to prevent a takeover; however, Bulldog is likely hoping to get this removed by shareholder vote. Given their nearly 15% stake in the company, this might be possible.

The other major obstacle may be finding a buyer for the company. Wilshire owns and invests in multi-family, office rentals, and retail space real estate properties in Arizona, Texas, Florida, Georgia and New Jersey. The company also maintains investments in marketable securities, which are classified as available for sale. Given the strength of the commercial real estate market recently, this company could be in a good position to sell itself to unlock value. Whether or not this actually happens depends on whether or not the hedge fund can remove the company's poison pill and whether or not the investment bank is successful in locating a buyer. Either way, this is definitely a stock that is worth keeping an eye on!

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Oil prices settled above $60 a barrel for the first time this year after a pipeline and oil field shut down and threatened to cut into supply. Increasing tensions over Iran's uranium enrichment program also helped to boost prices.

JetBlue Airways Corp. (NYSE:JBLU) said it expects a wider Q1 loss and lower full-year profit, as it absorbs the effect of more than 1,000 cancellations caused by last week's winter blast in the Northeast. JetBlue expects to report a full-year profit of $0.44 a share, down from a prior projection of $0.64. Analysts overall are looking for $0.52 a share. Despite the lower guidance, JetBlue shares rose $0.29, or 2.3$, to close at $13.19 on the Nasdaq Stock Market, after earlier climbing as high as $13.56. The stock has traded between $8.93 and $17.02 over the past year.

Medco Health Solutions Inc. (NYSE:MHS), the biggest U.S. prescription-benefit manager, said its Q4 earnings soared 29% on higher overall revenue and improved results in its key specialty pharmacy business. The results beat Wall Street expectations, the company raised its profit forecast, its board authorized a bigger share buyback and shares set a new 52-week high. They rose $6.21, or just over 10%, to close at $67.80 on the NYSE.

General Motors (NYSE:GM) gave AT&T (NYSE:T) an award of a five-year, $1 billion global networking contract that will prepare the world's largest automaker for whatever electronic breakthroughs lie ahead. AT&T shares fell $0.15, or 0.4%, to close at $37.21 on the NYSE. GM shares fell $0.58, or 1.6%, to close at $35.37 on the NYSE.

Abercrombie & Fitch (NYSE:ANF) said that its Q4 earnings jumped 20%, powered by strong sales as the teen retailer continues to expand its Hollister line of stores. Analysts expect earnings of $2.14 a share on revenue of $1.1 billion. Abercrombie shares ended the day at $82, down $0.64. Shares fell $2.30 to $79.70 in trading after hours. Abercrombie shares have been trading near their record high of $83.82. The shares have been as low as $49.98 in the past year.

Analog Devices (NYSE:ADI) posted a higher quarterly profit as the maker of analog and digital signal processors benefited from strong sales of consumer products like flat-screen televisions and video game controllers. The company's profit jumped 27%, along with shares of Analog Devices that jumped more than 5% in after-hours trading. Analog Devices also forecast that profit for its current quarter would be $0.37 to $0.42 a share on revenue of between $640 million to $670 million.

Best Buy (NYSE:BBY) plans to open about 130 stores in the United States, Canada and China during its fiscal year beginning March 4. The top U.S. consumer electronics retail chain said it expects global retail square footage of about 46 million square feet, representing growth of around 10%, by the end of the year. In the United States, the company expects to open about 90 stores and to operate more than 900 by the end of the year.

Temple-Inland, Inc. (NYSE:TIN) shares moved up $1.71, or 3.32%, to $53.16 today after Carl Icahn announced plans to nominate his own slate of directors at the company's next annual meeting. We first began covering this story back in January, when the activist shareholder stated that shareholders could benefit from a spin-off or divesture of some of the company's business units. According to Icahn's past Schedule 13D filing with the SEC:

"The Reporting Persons acquired their positions in the Shares in the belief that they were undervalued due to, among other things, the conglomerate structure of the Issuer in which various disparate and non-complementary businesses are combined under one corporate umbrella. The Reporting Persons believe that this structure obfuscates the true value of the Issuer's assets and note that various analysts have issued sum of the parts analyses that imply a value for the Shares that is significantly higher than their current market price. The Reporting Persons intend to seek to have conversations with members of the Issuer's management to discuss ideas that management and the Reporting Persons may have to enhance shareholder value, which may include, among other things, the divestiture or spin-off of one or more of the Issuer's component businesses (which may include Guaranty Bank, the corrugated packaging business, timberland holdings, the building products business and/or the real estate division). The Reporting Persons may consider engaging in a proxy contest to attempt to replace one or more members of the Issuer's staggered board of directors with persons nominated by the Reporting Persons, but have as yet made no definite decision to do so."

The decision to conduct a proxy contest to replace members of the company's board came in Friday's Schedule 13D filing with the SEC:

"On February  16,  2007,  the  Reporting  Persons  delivered a letter to the Issuer (the  "Notification  Letter"),  notifying  the Issuer that the  Reporting Persons   intend  to  appear  at  the  2007  annual   meeting  of  the  Issuer's stockholders,  in person or by proxy, to nominate and seek to elect  individuals as members of the board of directors of the Issuer.  A copy of the  Notification Letter is filed herewith as an exhibit and incorporated herein by reference, and any  descriptions  herein of the  Notification  Letter  are  qualified  in their entirety by reference to the Notification Letter."

Carl Icahn has an impressive track record with companies that he is involved with and many shareholders are betting that he can unlock million in value from Temple-Inland. This makes TIN a stock that is definitely worth watching over the next few months!

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Pogo Producing Company (NYSE:PPP) moved up $0.62, or 1.23%, to $51.20 in early trading today after Daniel Loeb's Third Point announced Friday that it would be seeking a seat on the company's board at the next annual shareholder's meeting. According to the Schedule 13D/A filing, the activist hedge fund said that while the company had hired Goldman Sachs and TD Securities to explore strategic alternatives, they have no faith in the current management to follow through with a sale process. Consequently, the 7.9% holder said that it would continue to seek the majority of the seats on the company's board.

The news comes after many investors, including Third Point, had expressed concerns about the company's valuation and mismanagement. The company announced its earnings on Friday, which included lower boepd (barrel of oil equivalent per day) output than expected along with steep increases in capital expenditures. Third Point insisted that while these numbers were sad, they still believe that the company's assets are undervalued and under-utilized. If the hedge fund is successful in taking over seats on the board, it would greatly increase the likelihood of a sale. Combined, these factors make PPP a stock that is definitely worth watching.

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Sirius Satellite Radio, Inc. (NDAQ:SIRI) and XM Satellite Radio Holdings, Inc. (NDAQ:XMSR) shares rose today after the companies announced plans to merge on Monday. The proposed $13 billion merger would include approximately $1.6 billion in debt and have a combined 14 million customers. Under the terms of the agreement, XM Radio investors would receive four shares of SIRI for each share of XM Radio that they own. The new company, which has yet to be named, would be run by Sirius CEO Mel Karmazin.

Despite the optimism seen in the stocks today, the merger is likely to face several hurdles including approvals from the U.S. Department of Justice's antitrust division and the Federal Communications Commission. In January, the FCC chairman said that the agency's rules would not permit such an action. Currently, shares of SIRI are trading up around 2.5%, while shares of XMSR are trading up around 8%. This is definitely a stock to watch as the proposal seeks to gain approvals.

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Electronic Arts (NDAQ:ERTS) CEO Larry Probst said that the company was "at the very beginning of the next significant growth cycle" after receiving sales boosts from the new PlayStation 3 and XBox 360 systems.

AOL Time Warner's (NYSE:TWX) chief executive Steve Swad left the company last week to join a private equity firm, a move that follows many others in the company as they attempt to convert from an internet provider to advertising giant.

Dell Computers (NDAQ:DELL) said it has hired Ron Garriques, Motorola handset chief, to lead the company's consumer group. This move follows a series of other new executives filling in the ranks of Dell as the company attempts to turn itself around after several disappointing quarters.

DaimlerChrysler (NYSE:DCX) reportedly is in talks to sell slumping U.S. division to General Motors. This move would generate significant cash for the automaker to assist in its efforts to further focus on its core competencies.

Morningstar (NYSE:MORN) moved up on Friday after analysts predicted strong growth for the fast-moving financial company. Elliott Schlang of Great Lakes Review, the institutional research arm of Soleil Securities Corp., is predicting Morningstar's fourth-quarter net income will jump 31.5% to $13.3 million, or 28 cents a share. The company generated profits of $10.1 million, or 22 cents per share, in a record-setting 2005 fourth quarter.

Simon Property Group and its partner won a brief bidding war for the Mills Corp. (NYSE:MLS) and its 38 shopping malls after sweetening their initial offer by $80 million.

The Brinks Company (NYSE:BCO) shares moved up $0.48, or 0.77%, to $62.90 during Friday's trading after Bloomberg released an article about Pirate Capital's intentions with the company. According to the article, Pirate manager Hudson said, "At this point the only question in my mind is whether the company should be sold in its entirety or split into two pieces and each piece sold to a separate buyer." Word of this question comes after Hudson was able to obtain a seat on the company's board after agreeing to withdraw their proxy contest. Meanwhile, Pirate is still maintaining their 8.5% stake in the company with the additional support of MMI Investments. Combined, these factors make BCO a stock that is definitely worth keeping an eye on!

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