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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