LMP Real Estate Income Fund Inc. (NYSE:RIT) is a non-diversified, closed-end management investment company that invests in securities related to the real estate industry. The company has recently come under fire from investors concerned with the share price's discount to the company's net asset value (NAV). Spearheading the shareholder revolt is Stevenson Capital Management, who first expressed concern back in May 2006. The 9.6% holder renewed its threats in a Schedule 13D/A filing today, where it said that if the company did not take immediate action to correct the discount they would seek to replace members of the Board of Directors with a proxy fight.

What steps does Stevenson want the company to take to unlock this value? Well, the fund outlined three key solutions in their filing:

1. Within the next sixty days, the company urged the fund to sell sufficient assets to eliminate the company's leverage, which, in turn, will generate realizable net capital gains of approximately $5.00 per share to the shareholders.
2. Secondly, they demanded that the company commence a tender offer or a series of tender offers (or a reasonably structured open-market share repurchase program) to repurchase at least 400,000 shares of the company's common stock. Moreover, they noted that the transaction may need to be financed by selling assets, as mentioned above.
   
3. Finally, they demanded that the company commit to file with the SEC within a reasonable period of time, not to exceed 90 days, an application for an exemptive order that would allow the implementation of a managed distribution plan under Section 19(b) of the Investment Company Act of 1940 which will pay a dividend to the shareholders at an annual rate of 8% of NAV.

Stevenson then continued by outlining what would happen if the company did not comply with shareholder demands:

We realize that our approach presents a direct course of action. Our underlying proposition is that not enough of the value locked within the Fund is benefiting the shareholders. The value of the Fund belongs to the shareholders and we want management of the Fund to affirmatively take action to return a portion of that value to the shareholders. While your lack of response to our prior overtures have prevented us from having a meaningful dialog, I would again extend a sincere offer to you and your board to discuss the Fund’s future with us. If necessary, we are fully prepared to move forward to propose a slate of directors for election at the upcoming annual meeting of shareholders with individuals committed to realizing shareholder value and responding to shareholders concerns and to further propose for the consideration of the Fund’s shareholders that the Fund be converted from a closed-end to an open-end fund.

As the time to submit nominations and proposals under the Fund’s advance notice bylaws rapidly approaches, we hope that you realize that it would better serve the Fund and its shareholders if we could discuss our options rather than resort to a proxy fight. It is our hope that this letter serves as a catalyst to a meaningful dialogue.

Given the threat of a proxy fight at the upcoming annual meeting, it is likely that the company will at least respond to these demands. And clearly there is opportunity here if the company decides to positively respond to shareholder concerns. A return to NAV would mean significant share appreciation while a Section 19(b) distribution plan would unlock this value by distributing more to shareholders in the form of dividends. Combined, these factors make RIT a stock worth watching!

Synta Pharmaceuticals Corp. (NDAQ:SNTA) shares continued their decline today despite strong insider buying since its initial public offering earlier this month. Synta is an early-stage drug development company with a rich portfolio of chemical compounds, small molecules and plant extracts that it mines for drugs that the company hopes will be able to battle skin cancer or inflammation ailments like rheumatoid arthritis. Interestingly, the company's shares are down over 15% from their highs while several members of management and the Board of Directors have disclosed large purchases in a series of Form 4 filings with the SEC. Moreover, Luxor Capital Group also disclosed a 6% stake in the company in a Schedule 13G - indicating institutional interest in the company. Typically when a company IPOs, management uses the opportunity to divest their shares in order to diversify their portfolio. Therefore, this combination of events is certainly worth a second look...

Who is buying up these shares and could they have any information that normal investors do not? Well, there are several company officers that reported purchases, including:

• Eric Jacobson - Sr. VP, Research, and CMO - disclosed a 300 share purchase at $10/share on February 9th.
• Martin Williams - Sr. VP, Business Dev., and CBO - disclosed a 200 share purchase at $10/share on February 9th.
• Keith Gollust - Director - disclosed a 180,000 share purchase at $10/share on February 9th.
• Robert Wilson - Director - disclosed a 100,000 share purchase at $10/share on February 9th.
• Bruce Kovner - Director - disclosed a 720,000 share purchase at $10/share on February 9th.

Now, these numbers are not employee stock options, restricted stock grants, or stock awards - these are open market purchases of common stock using their own cash! One of the more interesting members of this group is Bruce Kovner, who readers of this blog may recognize as the manager of Caxton Associates - one of the more successful hedge funds on Wall Street. Currently, he alone holds around a million shares that he purchased for close to $10 million. Combined, this open market purchasing by company officers, directors, and a successful hedge fund manager make this stock one definitely worth watching!

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Shuffle Master, Inc. (NDAQ:SHFL) shares dropped more than 15% on yesterday after the company said it expects fiscal first quarter earnings to fall "significantly" below last years results due to lower revenues and higher costs associated with their February 1st Stargames acquisition. Other factors contributing to the windfall included the short-term impact from ending its Asia representative deal with Elixir Group Ltd. on February 4th, a $1.7 million revenue deferral related to a shipment to a Macau customer, and slower-than-expected rollout of multiplayer electronic table games.

Why are we concerned with a company that is under performing? Well, according to the company: "As a result of the near-term uncertainty associated with the factors discussed above, including, but not limited to, operational improvements in the company’s multi-player electronic table game business, including the evaluation of broader distribution relationships and the evaluation of various strategic alternatives for certain business segments, management has decided to temporarily suspend guidance for fiscal 2007." Shuffle Master CEO Mark Yoseloff said that the company would be evaluating all of their business segments in an effort to maximize long-term revenue growth, improve gross margins, and reduce operating costs. Restructurings can often provide opportunities to investors - particularly if they end up spinning off one of these segments. With shares near their 52-week low on what could be "short-term" windfalls, this is certainly a stock to keep an eye on!

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