Flamel Technologies (NDAQ:FLML) shares have more than halved since the beginning of the year but OSS Capital believes there is still hope. The activist hedge fund raised its stake in the company by 1 percent today, jumping the share price more than 6 percent as investors banked on a bottom.

The pharmaceutical company dropped substantially earlier this year after a study showed that its proprietary dosing of Coreg CR is no more effective than the original dosing. Given that this is the only drug that the company receives royalties from, it comes as no surprise that the stock was significantly damaged. However, one failure doesn't necessarily spell doom.

Flamel is obviously struggling with operating margins being new pharmaceutical company; however, it does have strong price to sales and price to book ratios. If the company could overcome this one roadblock and sign one or more deals in the near term, there is potential for the stock to return to its prior levels almost 300 percent above its current trading price. This makes FLML a stock worth watching!

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Banks like Citigroup Inc. (NYSE:C) and J.P. Morgan (NYSE:JPM) are reportedly offering financing packages for private equity firms and hedge funds in order to purchase debt held by the banks themselves. The hope is that this will help generate some activity in what has become a relatively illiquid credit market.

Many investment banks have reportedly offered up to 4:1 leverage for private equity firms to purchase discounted debt issues. Others have thrown around rates of LIBOR + 60 and LIBER + 85 basis points. These types of leverage could boost returns to the double digits for hedge funds and private equity interested in entering the market.

More than $250 billion in bank debt is due this year alone and many are expecting the majority of it to be sold at a discount to third parties. Ideally, this will help boost the liquidity in the market and restore access to capital that has kept the M&A industry so active the last year.

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Tyson Foods (NYSE:TSN) shares moved down over ten percent today after the company lowered its FY2007 guidance amid increasing grain prices. Further declines were curbed after the largest food producer in the world announced that it would outline a turnaround plan later this year. Shareholders are hoping that this plan will help unlock value and keep the company on track.

So, what improvements might this plan contain? Well, Tyson Foods has shown moderate top and bottom line growth but trades at a hefty premium to other companies in its sector. The company is now trading at 37x earnings when it should be trading at around 13x based on its historical 5 percent growth rate.

Tyson Foods has also failed to meet analyst expectations, surprising to the downside more than 30 percent on average. The problem seems to lie in the company's poor operating margins and operating efficiencies. Analysts and shareholders are hoping that management can work to improve these margins in order to weather the rising cost of grain and other goods.

Unfortunately, the company already has a leveraged balance sheet so any recapitalizations to fund a turnaround are out of the question. In fact, the company already has nearly 40 percent of its total capital tied up in long-term debt, which could spell trouble if its equity continues to tumble. Analysts and shareholders are hoping that these questions will be answered in the company's turnaround plan.

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Macrovision Corp. (NDAQ:MVSN) shares moved up marginally after Blum Capital disclosed a 5 percent stake in the company last Friday, according to a Schedule 13D/A filing with the SEC. Shareholders are hoping that the activist hedge fund will work with management to unlock value in the company.

What is in the cards for the software company? Well, Macrovision's balance sheet is extremely solid with $413 million in cash with only $240 million in total debt. Often times, hedge funds will look to distribute this spare cash to shareholders via a share buyback or special dividend.

The problem is that Macrovision is showing negative year-over-year cash flow growth of -80 percent with an EBITDA margin of 18.4 percent. This has many speculating that Blum Capital will step in to reduce the company's capital spending and distribute the spare cash to shareholders via a share buyback or special dividend.

Whether or not the hedge fund will be successful in implementing this strategy remains to be seen; however, with a growing 5 percent stake in the company they may have enough say to make it happen. Combined, these factors make MVSN a stock worth watching!

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Lehman Brothers (NYSE:LEH) may have greater exposure in the debt market than its peers but many analysts believe the bank's 1.4x book value is too pessimistic, especially considering the bank's move to diversify away from its bond holdings. Many others believe, however, that brokerages and banks have yet to hit their lows as the credit and mortgage crisis continues.

Lehman Brothers shares are down more than 30 percent this year in a situation that reminds many of the Russian default that caused major concerns for the bank back in 1998. While this situation isn't nearly as critical, the lesson rings true that shareholders willing to weather the storm may be rewarded handsomely. The recent move down has made LEH the second cheapest major investment bank behind Bear Stearns.

Lehman Brothers continues to have one of the best balance sheets in the industry. While the company's cap structure may have some room for improvement, its price/cash flow, price/book, and price/sales ratios are all extremely strong. The stock also trades at 6x cash flows, which indicates that investors are assigning relatively little value to the company's non-cash assets and earnings potential. Combined, these factors make LEH a stock worth watching!

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Accredited Home Lenders Corp. (NDAQ:LEND) shares continued their rise today after receiving a renewed buyout bid on Friday that jumped shares more than 50 percent. The company announced a dividend today which was an indicator to some that the company wants more in a potential sale that it is keen on completing.

Lone Star announced late last week that a deal would still be possible at $8.50 per share in a deal worth $214 million. Many analysts and shareholders had questioned the previous $15.10/share bid amid concerns about the credit and mortgage markets - and for good reason! The new bid comes at a 44 percent discount.

Tough mortgage markets and credit markets prompted Lone Star attempting to back out of the bid several times. Accredited countered by suing the hedge fund in an attempt to force the sale to go through. The latest offer was extended to September 12th and the company has yet to respond.

"Under current conditions, the company may suffer further declines in value and have a difficult time serving as a going concern," Lone Star said in a letter. "It is patently clear that swift action by the board of directors is needed to preserve the company's existing enterprise value."

Many analysts and shareholders believe that the company will be forced to go through with this deal as it has already publicly stated that bankruptcy is in the cards in the event that it decides to go it alone. However, many are now guessing its motives after the company's recent decision to issue a dividend and cut its workforce. Combined, these factors make LEND a stock worth watching!

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Arm Holdings plc (NDAQ:ARMHY) shares rose $0.37, or 4.32%, to $8.94 today after the company announced that it repurchased a substantial amount of its own stock during the past few days. Shareholders took this as a sign that the company feels its shares are undervalued.

The microprocessor manufacturer announced that it had repurchased 750,000 shares three times during August on the 28th, 29th and 30th. The total number of shares repurchased amounted to 2,250,000 shares at a price of roughly 315,000,000 pence. The new stake amounts to roughly a 10 percent increase in its treasury holdings.

Analysts are also bullish on Arm, which holds a leadership position in the mobile processing market. The company receives royalties on its designs that let it achieve margins of 100% and provide investors with a rapidly expanding stream of profits over the long-term. Meanwhile, the market for the company's products appears to be expanding rapidly at least in the medium term. Combined, these factors make ARMHY a company worth watching!

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Dell Inc. (NDAQ:DELL) posted earnings today showing signs of a successful turnaround after the company exceeded Wall Street estimates. Shareholders have been hoping that Michael Dell's return to the company would spark a turnaround that would help the company exit its current rut and regain its position as one of the top computer makers.

Dell reported a 46 percent jump in profit and a 4.8 percent increase in revenues for the second quarter, beating analyst expectations. Server sales were also up 14 percent along with a 20 percent increase in storage sales. Dell shares added over 2 percent today on the news.

Despite the great earnings, the computer maker still faces a number of hurdles. Analysts are predicting a slower decline in component costs for the second quarter, which could hurt earnings. The company is also continuing its internal investigation into its finances that has left many guessing. And finally, the company has had problems meeting demand for notebooks in certain colors.

In the end, Michael Dell's return to the company seems to be helping. Dell's operating results have definitely improved and the company is making progress towards resolving its other problems. Combined, these factors make DELL a stock worth watching!

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Angelica Corporation (NYSE:AGL) board members and executives may be in trouble soon after a major shareholder said it would nominate its own slate of directors during the company's next annual meeting, according to a Schedule 3D/A filing with the SEC.

Pirate Capital, which owns a 9.8 percent stake in the company, said today that it intends to nominate Thomas R. Hudson Jr. and Christopher Kelly to the board of directors at the company's upcoming 2007 annual meeting. The move follows a long history of trying to force the company to undergo changes that would unlock value for shareholders.

Interestingly, Pirate Capital has began to unwind its position in the company since April of this year. June and July showed sales amounting to 937,257 shares, which is a 15 percent reduction in its stake. Some investors are questioning why the hedge fund would cut its stake ahead of a signature battle to replace directors and implement its plans for the company.

Pirate Capital has a long history on Wall Street as being the premier activist hedge fund. Last year, the hedge fund ran into problems, however, after it reported a steep loss and several of its limited partners pulled their money forcing the fund to sell off many of its stakes at further losses. Now, Pirate appears to be back on track with a new set of activist targets.

Combined, these factors make AGL a stock worth watching!

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A large Sun-Times Media Group (NYSE:SVN) shareholder asked the company to consider a range of strategic alternatives aimed at unlocking value for shareholders, according to a Schedule 13D/A filing with the SEC.

K Capital Partners, which owns a 9.9 percent stake in the company, said the company is trading at a discount to its intrinsic value and demanded that the company take immediate action to unlock shareholder value. The activist hedge fund demanded that:

1. The Company should hire a strategic advisor and put the Company up for sale.

2. Raymond Seitz should step down as Chairman of the Board. While the reporting Persons have great respect for Mr. Seitz as an individual, his personal travel schedule and other interests do not allow him to provide present and active leadership.

3. Gordon Paris should step down as a member of the Board. Mr. Paris was CEO of the Company during its deterioration and during its costly decision to invest in Canadian commercial paper; given these facts, there is no justification for allowing Mr. Paris to remain on the Board.

4. The Company should appoint two institutional shareholders to the Board, so that the Board has greater shareholder representation. The current Board has minimal ownership, as has been evident in its decisions and actions.

5. The Company should execute a share buyback with the remaining unused capacity under the existing buyback program, which the Reporting Persons believe to be in excess of twenty million dollars. The Reporting Persons believe a twenty million dollar buyback is very conservative and prudent given the Company's potential financial liabilities and operational requirements.

Shareholders are hoping that the company will consider these alternatives and take some measures to unlock value for shareholders. Whether or not this will happen depends on the company's response, but this is definitely a stock to watch in the meantime!

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