Ford Motor Company (NYSE:F) shares moved up marginally today after the company announced that it would explore the possible sale of two of its luxury brands today. The company reportedly hired Goldman Sachs, HSBC Holdings and Morgan Stanley to explore strategic options for its LandRover and Jaguar segments. Many investors are hoping that the continued divestures will shake up the company's stagnant stock.

The number two auto retailer in the United States has been struggling for some time with its restructuring process aimed at turning around its North America operations. Ford has openly stated that they do not expect to be profitable until at least 2009 with the restructuring process costing the company more than $10 billion. These efforts include recently announced plans to close 16 manufacturing facilities and buyout over38,000 employees.

So, why should investors be looking at Ford? Well, the truth is that most of the bad news is already priced into the stock. The company has openly told investors that it doesn't expect to be profitable for some time and the future beyond that is very uncertain. More importantly, investors are only expecting more bad news from the automaker after its long history of disappointments - this further compounds the discount at which the stock is trading.

The new variable added to the equation is the proposed sale of the company's Jaguar and LandRover segments. We know that Ford already divested its Aston Martin division early this year in a sale to private equity that shocked many analysts - nobody expected the segment to attract so much interest. Therefore, it is not unreasonable to assume that the company's sale of Jaguar and LandRover may attract similar interest.

Some investors are also looking at Ford as a whole. The move to divest many of its assets provides the company with a significant amount of cash while making it substantially cheaper. This trend has fueled speculation that private equity may get involved if shares get too cheap - that is, if they don't rise upon the sale of these assets. This is all potentially good news for shareholders who stand to benefit significantly from these moves!

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Sprint Nextel (NYSE:S) may finally be ready to take the advice of activist investor Ralph Whitworth after a company webcast at a Bear Stearns conference in New York today hinted towards drastic changes in the future. Many investors are hoping that such changes could help turnaround the struggling telecom company.

Whitworth accumulated a $500 million stake in Sprint earlier this year through his hedge fund Relational Investors. Soon after he began pushing for the company to unlock value through a series of strategic transactions, including the sale of its long distance unit. Hints towards such transactions were given when CEO Gary Forsee noted its Embarq spin-off while saying, "It's something very important to continue to look at that structure ... if you look at our company as a sum-of-parts, we have to unlock value".

Buyout rumors have also surrounded the company ever since Alltel's successful auction earlier this year. There has been speculation since the telecoms' decline that the sector may be targeted for leveraged buyouts by private equity funds. Sprint's vast networks and market-leading position would make it an ideal candidate if properly priced. However, with Whitworth's talk of restructuring and the company's now-apparent support, the stock price may remain high enough to thwart any attempts in the near future.

All of this has some shareholders angered, however, as lackluster earnings have cut the stock's value by more than 20%. While some investors may understand the long-term value creation derived from a restructuring, many would likely opt for a quick sale if the opportunity presented itself. Regardless, Sprint is definitely a stock worth keeping an eye on while the company works to unlock value for shareholders.

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Tyco International (NYSE:TYC) gained necessary government approvals yesterday for the spin-off of its healthcare and electronics segments to shareholders. Shares in the manufacturing and service company rose to set a new 52-week high on the news as shareholders look forward to the divesture. Shareholders on record June 18th will be eligble to receive shares in the new companies that are expected to begin trading as early as July 2nd under the symbols COV and TEL.

Many shareholders have been looking forward this spin-off as the two business segments have long been considered undervalued. The spin-off will unlock this value by freeing the segments of an overburdening corporate structure. Many analysts estimate Tyco stock as trading at less than half of its eventual value that will be realized once the three businesses are operated independently. Others peg the value just shy of $40 per share. Regardless, most analysts agree that this spin-off is a long overdue effort to unlock value in Tyco's diversified businesses.

So, what does this mean for investors today? Well, many analysts peg the intrinsic value of Tyco post-breakup at a collective $40 per share. This represents a premium of more than 15% over today's close. We also know that spin-offs in general tend to outperform the overall market due to factors related to the structure of the deals. Often times, existing shareholders that receive shares in the new company will immediately sell them since they never intended on holding them. This causes unjustified selling pressure on the new spin-off companies, which can translate to opportunity for enterprising investors. Combined, these factors make TYC a stock worth watching!

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Northwest Airlines (NYSE:NWA) emerged from bankruptcy in late May after more than 20 months under protection. The domestic carrier is the last of the major airlines to emerge from bankruptcy protection and many analysts believe it is now in a strong competitive position relative to other carriers.

Northwest managed to reduce its cost structure by $2.4 billion annually, solve its pension problems, properly size its fleet and reduce its debt load by over $4 billion during its many months of bankruptcy protection. The carrier's operating statistics reported to the Department of Transportation are also promising: The company reduced its operating costs by nearly 11%, increased its yield (fare per mile) by 7% and increased its revenue per available seat mile by nearly 10%.

The turnaround isn't the only reason that investors should be looking at Northwest either. There also exists the potential for more deal-making in the industry. Just today Airtrans extended its takeover offer for Midwest Air while there are still rumors floating around that Northwest could become an eventual target. While Northwest certainly isn't the smallest airline anymore, it could still be considered the smallest of the larger airlines. And with less debt, improved operating margins and eventually a larger footprint, it could easily become a takeover target.

There is no free lunch, however, and many analysts are quick to point out that Northwest continues to face many challenges - the biggest being labor relations. The carrier has had widely publicized labor disputes in the past and just last week it had payment with its attendents. Also of concern is the carrier's plan to spend more than $6 billion to increase its fleet size and expand its footprint. While this is a plan to ultimately increase revenues, there is an inherent execution risk that could hurt shareholders.

So, should investors be looking to take a slice of Northwest for their portfolio? Well, post-bankrupt companies are often undervalued as investors are quick to remember the not-too-distant past. Other major domestic carriers that emerged from bankruptcy have also performed fairly well relative to the market as a whole. Overall, Northwest certainly makes for an interesting investment for investors looking to add a riskier stock to their portfolio.

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Meadow Valley Corporation (NDAQ:MVCO) may face increased shareholder scrutiny over its recent shareholder proposal. CD Capital Management LLC disclosed a 5.7% stake in the company and demanded in a letter to the Board of Directors that the company rethink the terms of the proposal, sell it's Ready Mix subsidiary, and explore a possible sale of the company as a whole.

CD Capital Management said that although the company's shareholder proposal would unlock value, it is flawed in its requirement to return the cash upon sale to shareholders without considering whether the cash could be more effectively reinvested in the business. Moreover, Meadow Valley's small market capitalization and "two asset" existance only complicates the situation.

The hedge fund also noted that it was pleased with the recovery in the company's stock price and management's progress towards improving operating margins while growing revenues. However, they noted, there is also a very strong market right now for construction and material assets. Consequently, the hedge fund said that they would support a sale of the company for a price higher than $18 per share when the Board of Directors is ready to explore that option.

So, what does all of this mean for shareholders? Well, the company has already announced a proposal to unlock shareholder value through a series of strategic transactions, including the sale of Ready Mix. Given that the Board of Directors is already supportive of such initiatives, it would not be far fetched to assume that they would be open to a potential sale of the company - which CD Capital's prior analysis pegs at about $18 per share or more. Combined, these factors make MVCO a stock worth watching!

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Infinera Corp (NYSE:INFN) shares soared more than 50% on their first day of trading as many early stage investors enjoyed a quick flashback to the dotcom days. The company's IPO raised more than $182 million for the company, giving it an initial valuation of $108 billion. However, whether or not the company deserves such a high valuation remains a subject of great debate.

Investors are watching the company carefully as it aims to disrupt an established market: optical networks. Specifically, the company said that it could produce chips containing optics technology to greatly simplify the translation of analog optical signals that travel over fiber optic networks into digital signals. This would eliminate the need for all-optical networks.

Infinera was founded in December of 2000 and began shipping its products in November of 2004. The company posted a loss of $66.5 million in 2004, $64.8 million in 2005 and $89.9 million in 2006. However, the company has experienced a surge in revenues which have climbed from $4.1 million in 2005 to nearly $53 million in 2006. Interestingly, the company also has an accumulated deficit of $333.9 million.

So, is the company worth the price? Well, by comparing the revenue and costs trends we can expect the company to become profitable around 2009 with a high growth rate. However, in the dynamic telecommunications network, it is difficult to say whether or not they will be able to sustain their revenue growth rates. Moreover, any competing technology could greatly impair the company's growth. Combined, the stock may not be the best investment at this point, but it is certainly a stock worth watching over the next few years!

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Netflix (NDAQ:NFLX) shares added over 5% during yesterday's session after rumors surfaced that Amazon.com (NDAQ:AMZN) may be interested in acquiring the company. Traders active in the options market fueled speculation by purchasing Netflix call options and Amazon.com put options, hoping to gain from a leveraged spread.

Is there any merit to these rumors? Well, Several analysts immediately dispelled them while noting that similar rumors tend to surface ever six months or so. Analysts also question whether or not Amazon would even desire a presence in the online video rental business. After all, there is a growing trend towards the downloading of many videos which will eventually cut into Netflix's margins. Consequently, a merger between these two companies isn't too likely.

Meanwhile, many investors insist that Amazon's recent rise of more than 70% has provided it with increased buying power. In order to sustain this momentum, the online retailer may need to look into other markets. While some see Netflix as a competitor doomed to declining margins as Amazon's own downloading services increase, others maintain that the company could simply be purchasing the customer lists and temporary cash flows if nothing else.

Clearly Amazon is in need of an acquisition or other means to spend its new-found cash. Whether or not this will result in an acquisition of Netflix remains to be seen; however, given the substantial interest by active traders, it's definitely a stock worth watching!

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Vodafone Group plc (NYSE:VOD) is headed for turbulent waters with activist investors despite moving up over 40% off of its 52-week lows. ECS Assets is pushing the telecommunications company to unlock as much as $76 billion in a restructuring effort aimed at returning value to shareholders.

The activist hedge fund is the latest in a growing trend of investor activism aimed at unlocking value through the exploration of strategic alternatives. ECS argues that the company's inefficient structure has prevented the stock from trading at its intrinsic value. The battle is predominantly centered around Vodafone's 45% joint venture stake in Verizon Wireless, which is valued at around $50 billion.

ECS wants the Verizon Wireless stake to be spun off into its own publicly traded entity, which would become one of the ten largest stocks traded on the London Stock Exchange. If the process is successful, the hedge fund insists that the stock could rise nearly 50%. The idea may be an uphill battle for ECS, however, given the fact that the company has refused to sell the stake several times in the past. Regardless, this is definitely a stock worth watching!

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CSK Auto Corporation (NYSE:CAO) is a specialty retailer of automotive parts and accessories that has performed extremely well during the last year despite difficulties in the sector. The stock currently sits about 70% above its 52-week low and only cents away from making new highs. Some investors are convinced, however, that the stock is trading well below its intrinsic value...

Karsch Capital Management currently holds a 9.32% stake and is one of these investors. The activist hedge fund demanded this morning that the company's board of directors immediately conduct a review of strategic alternatives in which it would weigh the relative merits of selling the company versus giving a new management team time to turn around the company.

Karsch acknowledges that both options would be viable alternatives for the company. A sale of the company would be successful because (1) the company is highly attractive to other auto-parts retailers given its past success with mergers, strong potential synergies and unique real estate on the West Coast, and (2) the company is highly attractive to private equity firms because of the strong cash flows and recent strength of the auto M&A market. The hedge fund also noted that it had received several inquiries from private equity firms showing interest in the company and believes any sale would come at a substantial premium even to today's price.

Interestingly, Karsch is not only interested in a quick sale of the company. The hedge fund admitted that with the leadership and vision of an above-average CEO, they believe CSK Auto could execute an easily achievable operating margin of 9% in 2009 and retain its current 8x forward multiple on their EBITDA projections, which would result in a share price well above $30/share over the next 18 months. CSK Auto will also be able to eliminate a number of one-time expenses that hit the stock last year. And finally, the auto industry is one in which turnarounds have historically seen a higher rate of success.

These days hedge funds and private equity firms are pulling in billions of dollars each year, earnings enormous rates of return for their clients. These returns are not made by overpaying for companies; rather, many investors opt for a quick sale instead of a long-term turnaround that would yield far more value. Karsch has outlined both options today in its letter to the board. A sale of CSK Auto may still be the best options, but it would depend on the bids and various execution risk factors associated with a new management team.

In the end, CSK Auto is a great potential investment given the involvement of a hedge fund that understands how to unlock shareholder value. Unfortunately, the company's board of directors doesn't have the best track record after two accounting probes, a near bankruptcy and chronic underperformance relative to competition. Consequently, Karsch has demanded to be an active part of any turnaround process and threatened a proxy fight if they are cut out. Great news for investors.

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Though News Corp.´s (NYSE: NWS) Rupert Murdoch called his meeting with Bancroft family members, who through a dual-class share structure control Dow Jones & Co. (NYSE: DJ), ¨constructive,¨ critics of the deal within the company are looking harder for ways to keep editorial control of holdings such as the Wall Street Journal away from Murdoch.

The Independent Association of Publishers' Employees, which represents some 2,000 Dow Jones employees, has reached out to billionaires Warren Buffet, of Berkshire Hathaway fame, and Ron Burkle to get involved in buyout talks.

The Union President, Steven Yount, said "our union remains hopeful that the Bancroft family will conclude that a sale of Dow Jones is not necessary...but if the Bancroft family is to be persuaded that a sale must take place, we believe that there are alternatives to Mr. Murdoch."

Though Buffet nor Burkle have officially become involved in the discussions, the Union hopes that with their combined wealth and interest in the news has brought realistic contenders into the picture.