NCR Corporation (NYSE:NCR) announced earlier this week that its proposed spin-off of Teradata Corporation is on track for the end of the third quarter. The trading itself is scheduled to begin on October 1st when NCR shareholders will receive one share of Teradata for each share they own.

The data-warehousing solutions division (to be Teradata) continues to grow as well, reporting a revenue increase of 9% to $433 million. There have also been rumors circulating that the company could become an immediate buyout target for IBM (NYSE:IBM) or Oracle (NDAQ:ORCL). The spin-off is also expected to result in significant cost savings for both companies as well as allow each to focus on their core competencies.

Investors should also note that spin-offs in general tend to outperform the overall market by a substantial margin. This is for two reasons: (1) shareholders of the parent company may receive shares they do not want and sell for no reason, which can push down the share price without warrant, and (2) most companies that undergo spin-offs do so for very good reasons - the two companies share few synergies and can reduce costs and increase focus apart.

Clearly this situation is one worth watching for shareholders and investors alike. For existing shareholders, it is a sign that the company is committed to unlocking shareholder value and also gives a "free" stake in a great new company. For potential investors, spin-offs represent great opportunities to invest in the time after the spin-off occurs as their is undue selling. Combined, these factors make NCR a stock worth watching!

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Ceridian Corporation (NYSE:CEN) urged shareholders on Thursday to vote in favor of a $36 per share takeover offer from buyout firm Thomas Lee and Fidelity National Financial. Meanwhile, Pershing Square's Bill Ackman is speaking out against the merger saying on Tuesday that it would vote its 15% stake against the merger and propose to firing the board.

The September 12th board meeting promises to be an interesting one with a plethora of proposals on the table and a hostile hedge fund. Pershing Square has been pushing for the company to spin-off its Comdata division in order to unlock significant value in the company. The hedge fund also proposed a recapitalization of the company that would enable it to either offer a cash dividend or buyback its stock.

Interestingly, shareholders recent won a lawsuit against the company that will enable the buyer to back out of the transaction if the incumbent board loses the next election on September 12th. And with nearly 15% of the company's shares in Bill Ackman's hands, there is a good chance that the company's merger could be at risk. This is further confirmed by the differential between the share price and the buyout price. In the end, CEN is definitely a stock to keep an eye on while this situation unfolds!

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Metromedia International Group (OTC:MTRM) shares jumped $0.10, or 5.88%, to $1.80 today after Fursa Alternative Strategies' Mickey Harley expressed concerns over the company's proposed $1.80/share buyout offer and made his own $2.05/share proposal on the same terms. Shareholders applauded the move today but shares are currently at the original buyout price, leaving 14% on the table.

The planned merger is between Metromedia and an investor consortium called CaucusCom Mergerco, funded by Capital Management & Investment and others. Unfortunately for Fursa, these investors also have a $7.5 million breakup fee along with 20% of the net fees if the merger deal falls through and a third party acquires the company. This may cause some problems; however, it is likely that the board will at least consider the alternative proposal.

Metromedia is a diversified holding company that focuses on the Georgian telecom market. The interest in the companies lies predominantly in its 50.1% stake in MagtiCom - a mobile phone operator in the Republic of Georgia.
However, the company also has a large stake in PeterCom - a mobile phone operator in Russia. It also owns interests in Telecom Georgia and Telenet - two other Georgian companies.

In the end, this is good news for shareholders as it cannot hurt them. The current buyout offer stands at $1.80/share, so risky investors may find it worthwhile to purchase shares that are currently trading at that price in hopes for a chance at $2.05/share - a 14% premium. And this makes MTRM a stock worth watching!

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Beazer Homes (NYSE:BZH) shares dropped $2.71, or 19.37%, to $11.28 after rumors surfaced that the Atlanta homebuilder was preparing to file for bankruptcy. The speculation comes amid worries about homebuilders being able to pay their bills as subprime and variable rate mortgage worries weigh done on the entire housing sector.

Beazer Homes also announced last week that it was under federal investigation in North Carolina for certain company practices. The homebuilder also swung to a loss in the third quarter after cutting prices to help sales and took on major charges to write down the value of unsold inventory. While the situation looks bleak, the company called the bankruptcy rumors "scurrilous and unfounded", telling investors to refer to its third-quarter financial statements for "an accurate representation of the company's financial condition.

Clearly there are some major problems facing the mortgage and homebuilding markets as delinquencies continue to rise while housing prices fall. However, such speculation can also pave the way for cheap stocks for companies able to weather the storm. After all, who can forget how Equity Office Properties was formed back in the 1980s? On the crash of the commercial real estate market after the S&L bust.

Savvy investors able to see through the smoke and mirrors will surely be able to profit from these similar situations. Whether or not BZH turns out to be one of these situations remains to be seen, but it is definitely a stock worth watching!

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Trico Marine Services (NDAQ:TRMA) shares rose $0.82, or 2.31%, to $36.27 today after the company announced a $100 million share buyback program in which it will repurchase around 20% of its outstanding shares during the next 12 to 18 months in privately negotiated and open market transactions. Shareholders have been pushing for the overcapitalized company to return some of its $16/share in cash to its owners and this buyback is a great step forward.

Share buyback programs are one of the most popular ways for companies to return extra cash to shareholders. Repurchasing shares off of the open market both increases the stock price and improves financial ratios. Stock prices tend to increase since demand presumably remains the same while supply is shortened which causes price to rise. Meanwhile, the company's EPS is typically increased since there are less shares in the equation which improves ratios like P/E, ROE and ROA.

Shareholders also recently voiced concerns over the company's future direction. Sources in Norway told one investor that the company received an offer to sell their North Sea fleet at very attractive prices but the company failed to explore the opportunity. The same shareholder also said they had reason to believe that the company failed to exercise an option associated with a newbuilding contract despite the fact that the option itself could have been resold for a profit of $5-6 million. Clearly, the company has missed opportunities to invest and missed opportunities to divest - where is the company headed?

In the end, Trico is a healthy company with a large amount of cash on its books that failed to take advantage of some great opportunities at the expense of shareholders. Now the company appears to be turning itself around, however, with the introduction of a substantial share buyback program. TRMA is definitely a stock to watch going forward given their strong industry and new actions to unlock shareholder value!

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Wendy's International (NYSE:WEN) shares jumped more than 7 percent yesterday after Nelson Peltz disclosed that Triarc would be willing to pay between $37 and $41 per share for the third largest fast food chain in the U.S. and the bid could go even higher if he was allowed to see confidential information. Shareholders have been waiting for such a buyout since April 24th, when the company first began exploring strategic alternatives.

The problem Peltz has been facing deals with the way financing on the deal is structured. Certain conditions in staple financing created a disadvantage for Triarc and other strategic buyers. Peltz wants to explore other means of financing, but is facing problems with the way the terms are structured. Meanwhile, he is also concerned about the confidentiality agreement that Wendy's is seeking to have signed as part of the sale process. The activist investor threatened to take more hostile actions against the company if they do not revamp the agreement to more reasonable terms.

Peltz's Triarc Cos (NYSE:TRY) is the parent company of competing chain Arby's and has long been considered a strategic buyer for the Wendy's chain. The activist investor also runs Trian Fund Management, which owns a 9.8 percent stake in the company and has been pushing the company to maximize shareholder value, including the spin-off of Tim Horton and the sale of Baja Fresh. The company is also considering the sale of Cafe Express.

In the end, the idea of a $41 per share or possibly higher buyout is great news for shareholders. And luckily, with Nelson Peltz behind the company, it will not likely give up in pursuing an acquisition despite difficult financing terms and an unreasonable confidentiality agreement. Combined, these factors make WEN a stock worth watching!

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American Home Mortgage Investment Corporation (NYSE:AHM) shares fell $9.32, or 89.02%, to $1.15 after its shares resumed trading after a day and a half of being halted. The company announced that it was facing serious liquidity issues amid a flood of margin calls from lenders and has hired advisors to evaluate its options, which could include a liquidation of its assets.

The mortgage lender confirmed that it had already received and paid "very significant" margin calls during the past three weeks and has "substantial" unpaid margin calls pending. To compound the problems, AHM also said it was unable to borrow on its credit facilities at present and is unable to fund its lending obligations. Investors pushed the stock down today on concerns that the company will be unable to meet its obligations and be forced to liquidate. In fact, the company revealed just today that it has hired Milestone Advisors and Lazard to help it in evaluating its strategic options and to obtain additional funds.

The news comes after widespread troubles in the mortgage sector lasting upwards of six months. Subprime lenders that lend to people with poor credit were the first to suffer a rise in delinquencies and defaults with more than a dozen brokers declaring bankruptcy. Many are hoping that this three year problem will be resolved eventually as lending requirements are tightened and subprime lenders undergo some consolidation and recapitalization.

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Stamps.com Inc. (NDAQ:STMP) shares hit a two year low recently prompting at least one investor to speak out against the company. LaGrange Capital disclosed a 6 percent stake in the company and demanded that the company immediately institute a share buyback program and work on improving its financial condition or put the company in the hands of someone who can!

La Grange said that it feels Stamps.com offers a highly competitive product and below market prices while maintaining key barriers to entry. The company also has a subscriber-based model capable of generating substantial recurring cash flows. In fact, management has stated that the lifetime value of each customer is 2x the subscriber acquisition cost - a great ROI for any industry! However, the hedge fund is disappointed with the disconnect between potential and actual performance.

Stamps.com needs to revive its earnings and subscriber growth rates in order to regain the confidence of shareholders. Backing out interest income and fully taxing earnings, the company generated a mere $0.07 in non-GAAP EPS - a decline from last year. Moreover, the new direct marketing campaign generated only 2,000 net paying subscriber adds with the total number of subscribers below the prior year's quarter and only marginally higher than the last quarter.

One of the key suggestions made by LaGrange was a share buyback program that would repurchase 1/3 of the company's outstanding shares. The hedge fund insists that such a program would involve minimal financial risk given the fact that the company has no debt and a substantial pile of cash. LaGrange also recommended that the company pursue strategic partnerships and alliances to drive subscriber growth, which is key to profitability. If the company isn't capable of delivering on results, it should consider a sale of the company to a more capable group.

In the end, Stamps.com is an extremely undervalued business with poor management that is unable to deliver results. And with the company trading at a two year low, many shareholders are ready for change. Obviously, any share buyback or sale of the company should dramatically help unlock shareholder value, which makes STMP a stock worth watching!

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Cache Inc. (NDAQ:CACH) shares rose $1.94, or 12.62%, to $17.31 today after the company announced a 6 percent rise in same-store sales along with a one million share buyback. The news comes just one day after Vardon Capital Management noted that the company was trading at 2/3 its private market value with $4 per share in cash and therefore should implement a share buyback program. Shareholders are extremely satisfied with the jump in same-store sales and clearly applauded the buyback announcement.

Cache is a specialty retailer of social occasion sportswear and dresses targeting style-conscious women. This month, the company acquired Adrienne Victoria Designs in a move that many applauded. There is some speculation that it was this acquisition that has provided the boost to sales and may help boost the company's operating margins and net profit going forward.

Meanwhile, Vardon Capital, which owns 9.1 percent of the company, said that the share buyback should help close the gap between the current market pries and its intrinsic value. The move will also help boost the company's earnings per share and ROA/ROE ratios. Finally, the company's mid-single digit operating margin has the potential to reach double digit levels through such initiatives as well.

So, why are shares up today? Well, the company's acquisition of Adrienne Victoria turned out to be a great decision while the company's share buyback announcement helps ensure that the company has confidence in itself going forward and is dedicated to closing the discount gap in its valuation. Combined, these factors make CACH a stock worth watching!

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Packeteer Inc. (NDAQ:PKTR) shares moved up marginally today after Chapman Capital disclosed a 9.9 percent stake in the company and demanded that the company immediately hire an investment bank to maximize shareholder value. The wireless application provider has been facing widespread criticism since posting a wide loss during the second quarter of this year. Shareholders are hoping that Chapman can help unlock value through a sale of the company.

Activist investor Robert Chapman is well known for actively seeking to turn around or force the sale of the companies in which he is involved. He is also known for not being especially patient - and Packeteer's board may have pushed the envelope. In his letter to the company, Chapman noted that both the CEO and CFO failed to return his calls or respond to his inquiries and demanded that both be immediately fired. After all, Chapman is one of the largest owners of the company with a 9.9% stake!

Any investment bank will likely recommend one of several actions. The most anticipated action is a sale of the company to a strategic or financial buyer. Another possibility would be a leveraged recapitalization of the company that would enable shareholders to seek immediate returns in the form of one-time dividends or share buybacks. Either way, these actions would result in a windfall for shareholders. And given Chapman's reputation and large stake in this company, we think there is a decent chance that the company will eventually take action and hire and investment banker to explore its options. This makes PKTR a stock worth watching!

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