Transmeta Corporation (NDAQ:TMTA) shares rallied today after Riley Investments disclosed a 5.9% stake in the company and demanded that the company review its strategic alternatives. The activist hedge fund also indicated its belief that the stock is undervalued relative to its intrinsic value and peers. Shareholders are hoping that the company will heed the advice and work to unlock shareholder value.

Riley Investments said it believes that the public market valuation reflects a negative enterprise valuation despite strong prospects for positive free cash flow in 2008 and the five years for which it will be paid license fees under its recent agreement with Intel. Moreover, the hedge fund indicated that after Intel's first $150 million payment, Transmeta will have close to $180 million in cash on its balance sheets. This equals out to $13 per share in cash compared to the market value of $12 per share!

Riley Investments demanded that the company review its strategic options to enhance shareholder value. Specifically, the hedge fund recommended that the company sell the intellectual property to a company who can better leverage the costs associated with pursuing the strategy, delist from the NASDAQ, go "dark" to significantly reduce public company costs, or finally, engage in a significant dutch tender offer to unlock value.

In the end, this is all good news for shareholders as it means the company's intrinsic value could be realized. Whether or not the company takes action remains to be seen, but this is definitely a stock worth watching closely!

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Wynn Resorts Ltd. (NDAQ:WYNN) announced today that it would be issuing a $6.00 per share cash dividend for all shareholders of its common stock. The distribution will be payable December 10th for shareholders on record November 30th and will begin to trade ex-dividend on November 28th. Shares moved up over 6 percent on the news after a substantial drop yesterday.

The news comes amid a mass exodus from the casino stocks. Barrons came out yesterday saying that early profits from Macau were strong, but forecasts for this to continue fail to consider the impact of over-building and maturation. Since entering Macau, Wynn has surged more than 140 percent and it is going to slow down. They believe that investors are in for a surprise when they see margins being pressured.

Some analysts disagree, however, saying that forecasts are on-track for a total market size of over $15 billion by the end of 2010. However, one wildcard acknowledged by both parties is the risk of the Chinese government intervening with new rules and regulations that could curb growth. Combined, these factors make WYNN a stock worth watching!

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Target Corporation (NYSE:TGT) shares are down marginally after the retailer announced disappointing third quarter earnings but managed to mask it with a giant share buyback. Shareholders are hoping that the company will be able to turn itself around in a tough sales environment, while many are encouraged by the giant share buyback announced.

"Our third quarter earnings were disappointing due to soft sales in our higher margin categories, leading to lower-than-expected gross margin in our core retail operations," said Chairman and CEO Bob Ulrich. "However, we have not observed any meaningful change in the intensity of the competitive environment and continue to believe that we are well-positioned to operate in a variety of sales environments going forward."

Target also announced a giant $10 billion share buyback program along with an update to credit card receivables unit that is still pending. In September, the company said it was considering selling $7 billion in credit card assets in order to unlock further value for shareholders. The buyback alone would result in nearly a quarter of its shares being repurchased while the $7 billion cash infusion from a sale would also be a windfall.

In the end, Sears is facing a variety of problems. The company is facing a credit downgrade and a tough competitive environment. However, a share buyback combined with the prospects of a $7 billion sale of its credit card division. Combined, these factors make TGT a stock worth watching!

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