VMWare (NYSE:VMW) shares are a third off of their highs today after the stock hit $84.60. The company managed to lose $15 billion in market cap in only ten trading days amid a steep market downturn - particularly in tech. The move has many investors wondering whether or not this company is really worth the $40 billion market cap that it has now.

VMWare posted revenues last quarter of $357 million, which was up 88% over the same quarter last year. Meanwhile, earnings per share tripled to $0.18 per share. However, does this justify a valuation of $40 billion? Well, assuming that VMWare will raise its earnings 100% for the next five years and then 50% for another 5 years after that, we can discount all this future cash flow to a present value of $31 billion.

VMWare also faces significant competition. Microsoft recently announced its own initiatives to include virtual desktop tools with its operating system. And with billions of dollars at their disposal, Microsoft will likely be able to promote their product substantially more than VMWare.

In the end, it will be interesting to see how fast VMWare is able to grow their revenues and earnings. Whether or not this valuation is justified remains to be seen, but VMW is a stock that is definitely worth watching!

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Omnicare, Inc. (NYSE:OCR) investors are growing increasingly restless with shares trading near their 52-week low but some investors are upping their stake. ValueAct Capital increased their stake in the company despite an investigation by the Department of Justice. It will be interesting to see if this aggressive investment pays off, but there are many investors watching.

The Department of Justice issued a subpoena last week seeking information about Omnicare from the UnitedHealth Group "under its authority to investigate health-care fraud offenses". The subpoena called for UnitedHealth to provide all documents concerning "attempts by Omnicare to steer patients to Medicare prescription-drug plans".

"We do not believe there is anything significant related to this review that has not already been disclosed in our public filings," Omnicare said in a statement. "Our programs related to the implementation of (the Medicare drug benefit) have been carefully reviewed by outside legal counsel, and we firmly believe that we have complied with all applicable laws and regulations with respect to these matters."

In the end, events like this happen all the time without justification. A few years ago, the DOJ investigated online education companies for taking too much state tuition money, but the investigation turned up nothing. These stocks trade near 52-week lows and eventually return to their highs if they are found innocent. Whether this company is innocent or not remains to be seen; however, at least one investor is showing his cards!

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Ford Motor Company (NYSE:F) reported a net loss of 19 cents per share for the third quarter compared to a loss of $2.79 per share a year ago. The news could signal the beginning of a successful turnaround for the troubled automaker and came as a surprise to many investors. Margins are growing, incentives are falling and sales are becoming more profitable.

Ford has traditionally been the weaker of the big three automakers as it does not have hedge fund backing, massive sales outside of the USA, or cost cutting already behind it. However, this earnings announcement indicates that they may be able to pull off a turnaround anyway. The company reported improved overseas sales, increased margins in the United States, and is ahead of its $17 billion cash outflow target for 2007-2009 period.

Ford also said it was close to selling its Jaguar and Land Rover units but its CEO said there are no longer any plans to sell the Volvo market. The company likely decided to hold off because of the lowered cost of a turnaround. The company leveraged its assets to borrow $23.4 billion last year, but now doesn't expect restructuring costs to reach even that level.

In the end, Ford is on track to reach profitability in 2009. This is a remarkable achievement given the short timeframe for their turnaround and the increased competition in the auto market. Combined, these factors make F a stock worth watching closely!

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Unisys Corporation (NYSE:UIS) is starting to feel the pressure from shareholders who believe the company is undervalued. One shareholder, MMI Investments, disclosed a 9.9% stake in the company and indicated that they plan on pushing the company towards pursuing strategic alternatives. Shareholders are hoping that the activist investors will be able to help the company turn itself around and come to value.

Unisys Corporation's poor growth record over the short and long term indicate a troubled and uncertain business model. The company's latest earnings announcement caused a 20% drop in the days surrounding the announcement while the company is averaging a -230% earnings surprise over the last six quarters - not exactly what investors want to see! Many shareholders are skeptical as to whether or not the company will be able to turn itself around.

Management has performed well in the past growing the company's earnings per share; however, recent losses and a lack of top line growth suggest that the company is facing serious problems. This becomes a big problem when you consider Unisys' long term debt that accounts for 98% of its total capital. This makes the balance sheet somewhat unsafe given that the company only has $448 million in cash and total debt amount to $1.04 billion.

In the end, there are a few good things about this company. First, the company's price to sales ratio sits at just 0.4x, making it one of the most undervalued in the sector. Meanwhile, the company did report strong cash flows during the last quarter, which is a good sign. However, there are many negative aspects of this company as well. Ideally, an activist shareholder would be able to seek strategic alternatives and turn thing around. This makes UIS a stock worth watching!

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TheStreet.com (NDAQ:TSCM) announced record traffic of over 6 million unique visitors to its recently-redesigned website each month. The company is benefiting from its acquisition of Corsis and other acquisitions that it has made recently in the financial sector. TheStreet.com reported record revenue of $16.1 million for the quarter - a 24% increase over the same time last year.

"We had a record quarter where our total revenue grew 24% from the same period last year," said Thomas J. Clarke Jr., chairman and chief executive officer of TheStreet.com. "With our recent acquisitions and the many other initiatives we have undertaken, TheStreet.com has dramatically altered and broadened the landscape of opportunities for the Company. I look forward to cohesively and profitably integrating these opportunities as we strive toward becoming the premier online destination for money."

TheStreet.com's acquisition of Corsis, a leading provider of custom solutions for advertisers, enabled it to shift into higher-margin advertising. The acquisition included the internet property Promotions.com, which is known for working with some of the largest brands in the world. The company's subsidiary, StockPickr, also become the first financial social networking website to surpass 100,000 user-generated portfolios.

These acquisitions, combined with a series of new partnerships, has propelled TheStreet.com's earnings and future outlook as it diversifies its revenue base and expands into other markets. All in all, TheStreet.com is definitely a high-growth stock that is worth watching!

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Yahoo Inc. (NDAQ:YHOO) has taken a lot of heat from shareholders lately, but it got a break today with the stellar performance of Alibaba.com in which it owns a 40 percent stake. The recent initial offering of Alibaba.com has propelled Yahoo's stake to a valuate of $7.8 billion - or about 20 percent of Yahoo's current market capitalization! Shareholders are banking on growth in these foreign markets to drive Yahoo's earnings in the future.

Yahoo shares are sharply off of their recent 52-week highs, however, as many believe the good news is already priced into the stock. Many are also concerned that the stake may really not be worth that much to Yahoo shareholders since it cannot be easily sold at market value. More, the Chinese stock markets appear to be overextended and will likely face a retracement over the coming years.

Yahoo has faced a lot of criticism from shareholders lately. Many are concerned about their struggle to keep ahead of Google along with their failure to land a stake in Facebook. Many more are outraged that the company turned over information to the Chinese authorities that led to the arrest of a journalist - an event that the company must now explain in front of a congressional committee. Meanwhile, the stock has remained somewhat stagnant before these developments.

Yahoo is banking on its involvement in foreign markets to boost its share price in the future. The company has a significant presence in China now with Alibaba.com and may have plans to expand with other acquisitions. Since the Chinese web marketplace is not as established as in the United States, these companies can be acquired on the cheap. Yahoo also has stakes in other countries like Japan where it owns an auction site that ousted eBay.

Whether or not this new strategy pays off remains to be seen, but many believe the move overseas is a good one because the anticipated growth rates - especially in China - are far greater than those domestically. Combined, these factors make YHOO a stock worth watching!

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Beazer Homes USA Inc. (NYSE:BZH) may face some opposition soon after CtW Investment Group - a large union affiliate - called for the head of CEO Ian McCarthy after a series of problems with the company. Shareholders are hoping that this type of change can help unlock value in the company and take it out of its current streak of bad luck and mismanagement.

"Taken together, the combination of improper practices, compliance failures and poor corporate governance detailed above constitute a stinging indictment of Beazer’s leadership in general and of Mr. McCarthy in particular," said CtW in a letter to the board. "By swiftly replacing Mr. McCarthy with a qualified CEO and naming an independent director to assume Mr. Beazer’s role as chairman, the board can begin to restore the credibility Beazer desperately needs."

Beazer's stock is down nearly 80% so far this year with cancellations reaching an astounding 68% last quarter. Clearly, there are issues that need to be addressed immediately with this company. CtW proposed that hte company (1) replace CEO McCarthy, (2) name an independent board chairman, and (3) establish a legal and regulatory compliance committee to prevent future problems.

Notably, the company failed to respond to the hedge fund's first letter in early September. However, the hedge fund is continuing to press on with its demands by making them public. Shares in the company were up over 10% on news of these new demands. If changes do take place, BZH could quickly become a stock to watch!

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Capstone Turbine Corporation (NDAQ:CPST) shares rallied nearly four percent today after Lazard analyst Sanjay Shrestha initiated coverage with a $2.50 price target. The analyst noted that the company is making a turnaround and represents a great way to invest in the anticipated growth of the distributed generation market. Shareholders are clearly betting on the same conclusion that the company's turnaround will lead to substantially improved operating results in the future.

Some investors are concerned that top and bottom line growth in the company has been slowing down considerably in the short-term. Compared to fully year results published three years before, the company's annual revenue grew 66.7% durings its fiscal year while year to year quarterly sales decreased 14.5% in its most recent quarterly report. Similarly, the company's most recent full year loss was reduced by 23.1%; however, the most recent quarterly loss showed an increase of 11.5%.

Sanjay insists, however, that the company is in the process of a turnaround that should start yielding significant results going through 2012. "Our 2.50 price target reflects a 25x multiple on our 2012 EPS estimate of $0.20 discounted back at 25% for three years. We believe it is important to look at a 2012 earnings scenario given the company's growth trajectory and market penetration." So, it comes down to a question of the company's future earnings - is the company really on track to turn itself around?

The distributed generation market definitely seems to be growing as an alternative energy source. DG works be generating electricity from many small energy sources in a process that results in low maintenance, low pollution and high efficiencies. The problem is that they can occasionally have high costs; however, as we know, there are several markets that are willing to pay. Alternative energy sources are only going to grow in popularity as oil prices increase. Combined, these factors make CPST a stock worth watching!

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IAC/InterActiveCorp (NDAQ:IACI) shares rallied over six percent today after the diversified internet company announced that it would split up into five separate entities. Shareholders are hoping that the move will enable them to better capitalize on web media and services. The deal also included a deal with Google to provide sponsored search listings, which is expected to yield in excess of $3.5 billion in advertising revenue for the company.

The new IAC, led by Barry Diller, will be comprised of Ask.com, Citysearch, CursorMania, IAC Advertising Solutions, Evite, Excite, InsiderPages, iWon, My Fun Cards, My Way, Popular Screensavers, Smiley Central, Webfetti, Zwinky, Match.com, ServiceMagic, Shoebuy.com, Entertainment Publications, Reserve America, Black Web Enterprises, BustedTees, CollegeHumor, GarageGames, Gifts.com, Green.com, InstantAction, Primal Ventures, Pronto, Very Short List, Vimeo , and 23/6 along with its investments in Active.com, Brightcove, FiLife, Medem, MerchantCircle, OpenTable, Points.com and SHOP Channel.

The four new operations will include HSN for retailing, Ticketmaster, Interval International and LendingTree. Upon completion of the transaction, IAC's shareholders will own 100% of the equity in all five companies in a transaction that is expected to be tax-free. Shareholders are hoping that this transaction will help unlock value in the company that has been somewhat depressed despite its strong holdings of internet properties. This makes IACI a stock worth watching!

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Entergy Corporation (NYSE:ETR) shares rose four percent today after the company announced that it would be spinning off its non-utility nuclear business from its regulated utility business through a tax-free spin off. Shareholders are hoping that the spin off will provide them with an opportunity to profit in an increasingly difficult marketplace.

The new spin off is expected to consist of the non-utility nuclear assets, including the Pilgrim Nuclear Station, the James A. FitzPatrick plant, Indian Point Energy Center, the Palisades plan, and the Vermont Yankee plant along with a power marketing operation. The new company would be 50 percent owned by Entergy and would generate about 5,000 megawatts in a market that has some of the highest energy prices in the USA.

Interestingly, the new spin off is expected to have $4.5 billion in debt, which Fitch considered too high to give it an investment grade level rating. This means that the new company could have trouble raising money through debt offerings and may have to resort to more-costly equity if it needs funding at any point. However, the parent company will definitely have a large burden off its shoulders, which has many shareholders excited.

The parent company also noted that shareholders should expect a share buyback plan as soon as the deal is completed. Combined, this news has many shareholders excited as shares continue to rally this afternoon. This makes ETR a stock worth watching!

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