Atmel Corporation (NDAQ:ATML) shares rose marginally yesterday after Daniel Loeb’s Third Point LLC disclosed a reduced stake in the company. The activist investor disclosed in a regulatory filing that it had sold large blocks of shares between 10/11/07 and 11/30/07 at prices ranging from $5.80 and $4.39. The move will likely mean a loss for Loeb, who had been purchasing shares at around $5.45 a piece.

The integrated circuit manufacturer recently announced in-line earnings of $16.6 million or 4 cents per share, compared to a gain of 3 cents per share a year earlier (excluding a one-time gain of $120 million). This drop, combined with other news, has led to a drop in the company’s stock of around 30% since the beginning of the year. This may have been one issue that led to the activist liquidating its stake in the company – to cover the losses from the position or others in its portfolio.

So, how does the Atmel’s future look? Well, the company’s top and bottom line growth in recent years seems to be slowing considerably. The company currently trades at a negative PE ratio (since it has experienced losses during the past four quarters) but should stand at around 15x earnings based on its historical EPS growth rate. Meanwhile, the company’s market cap of over $2 billion is over 40x its latest quarterly net income, meaning it is extremely overvalued.

In the end, this stock is a poor investment that Daniel Loeb’s Third Point appears to have given up on. In the past, Loeb has taken action to repair his investments and return them to profitability in order to reap healthy profits for his hedge fund. However, in this case it appears that even he is losing faith. Combined, these factors make ATML a stock worth watching!

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Ford Motor Company (NYSE:F) shares moved up marginally after a fall Monday after the company announced the first positive sales trend after 12 straight months of decline. The automaker saw the greatest success from its redesigned Ford Escape, Ford Taurus X, and Mercury Mariner vehicles, which saw sales increase 199% compared with a year ago. Meanwhile, the new hybrid vehicles hit November sales records.

Ford also issued guidance in that was unchanged. In the first quarter of 2008, the company said it plans to produce 685,000 vehicles in North America compared to 740,000 during the first quarter of 2007. Sales for the fourth quarter of 2007, however, are expected to be unchanged from previous plans. This news surprised many industry analysts who had expected the company to announce results in line with other automakers who have been struggling with sales.

Ford also announced yesterday that a judge accepted the company’s deal to settle class action lawsuits on behalf of about 800,000 Ford Explorer owners whose vehicles low value because of their perceived rollover dangers. The settlement involves a payment of a $500 voucher to buy new Explorers or $300 vouchers to buy other Ford vehicles. This lawsuit has been in the works for several years and a settlement of the suit may remove a cloud that has been hovering over the company’s head for some time.

In the end, Ford appears to be on a turnaround track with sales starting to increase and a significant lawsuit under control. Combined, these factors make F a stock worth watching closely!

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Research in Motion (NDAQ:RIMM) may finally be feeling the effects of gravity after the company’s stock dropped another 8% yesterday on profit taking from many investors who are growing uncomfortable over the company’s earnings prospects. The stock made a huge run-up last year that took the stock up over 200%; however, shareholders are now taking some profits off the table as speculation circulates that the momentum may not be sustainable.

The mobile devices network has been in a state of flux since Apple launched its new iPhone and Verizon decided to open up its network to new devices and software. Such open systems may not help the Blackberry given the many new, competing products that have recently come to market. Verizon already markets the Motorola Q and Palm Treo – two of Blackberry’s largest competitors, and there is no way to predict how this may affect RIM.

Meanwhile, Google’s recent decision to provide open wireless device software through its service – codenamed Android – will likely allow competing device manufacturers to insert Blackberry-like features onto their own devices. Clearly, this is a reason for concern for the Blackberry as competition then becomes simply a matter of design instead of software. And finally, we already know that AT&T has been pushing the new Samsung Blackjack, which may end up taking a slice of the pie.

In the end, this new competition may prove to put a strain on Blackberry’s market dominance. Whether or not it will materially affect the company’s stock remains to be seen, but it is certainly a great reason to take some money off the table, which is what many people think is happening right now. Combined, these factors make RIMM a stock worth watching!

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Activist hedge funds have had a rough couple of months recently after several key deals have begun to fall through as the markets have plummeted. The hedge funds, which buy up cheap stock when they believe a catalyst could boost the share price, have seen double digit months for some time now. However, one of the key elements of their success is the ability to unlock value in their investments, often through exploring strategic alternatives. Unfortunately, these alternatives are becoming increasingly rare following the tough credit markets and stark drops in share prices.

The event-driven sector – as it’s known in the hedge fund world – has seen a drop of 4.3% so far this month with many prominent names seeing double digital declines. In fact, JP Morgan’s Highbridge Fund is down 12.7% in just the first two weeks of this month! However, others such as Atticus remain strong so far this year as they diversify their bets away from ailing industries. The prevailing favorite stocks amongst these players are value stocks – the same sector that is often hurt in markets like these.

Interestingly, many investment professionals are bullish on these same players as they begin to unwind their positions. The next big move will be towards the many distressed investment opportunities out there, and once the focus is placed on these sectors the portfolios will look very different than they do now. The current positions that are hurting are predominantly searches for private equity buyout targets – a strategy that has paid off handsomely during the past few months.

In the end, we are likely to see a different kind of return for these event-driven activist hedge funds. Rather than predicting and pushing for buyouts, these funds are more likely to begin seeking distressed investments that they can unlock value within and bring back to fair market price. These are still opportunities worth watching; however, they may now be more geared towards the long-term.

Newmont Mining Corporation (NYSE:NEM), the world’s second biggest gold producer, announced this weekend that it would be selling its royalty interests to Franco-Nevada Corp – one of its subsidiaries that it plans to spin off. The sale of the interests and other “non-core” investments is expected to net $950 million that it plans to use to fund the development of its mining business.

“We remain focused on our core gold operations and intend to reinvest the proceeds to increase gold price leverage for our shareholders,” said CEO Richard O’Brien. “We are extremely pleased with the outcome.” The proceeds should allow the company to expand its existing mines and make acquisitions to replace depleted reserves and boost production.

Newmont already has active mines in Nevada, Indonesia, Australia/New Zealand, Ghana and Peru. The company reported net income of $397 million, or 88 cents per share, during the last fiscal quarter. Meanwhile, the company’s consolidated gold sales slipped to 1.614 thousand ounces from 1.698 thousand ounces during the prior year’s quarter. Equity gold sales were also down as the average gold price quarter over quarter rose from $611 per ounce to $681 per ounce.

Many shareholders are looking at the new spin off, however, as the key investment opportunity. Spin offs tend to outperform the overall market during the first two years as a public entity. This is due to several reasons and is very well documented by researchers that have studied the phenomena. In fact, the research behind this is so solid that an ETF has been created to take advantage of this deal (CSD). In the end, both of these developments make NEM a stock worth watching!

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Wendy’s International (NYSE:WEN) shareholders are in for another surprise after Citigroup and Merrill Lynch have reportedly withdrawn their funding for Nelson Peltz’s bid for the company. Meanwhile, JP Morgan and Lehman Brothers have also supposedly declined to offer bidders staple financing on the transaction. The activist investor will still have funding from Deutsche Bank and Royal Bank; however, increased trouble among the banking sector may prompt those two banks to withdraw their support as well.

There has been a lot of speculation that the Wendy’s bid would end unsuccessfully anyway. The auction for the burger chain ran into trouble earlier this year after it failed to attract any meaningful bids. However, Nelson Peltz’s Triarc Cos made an unexpectedly low offer for the company at the bottom of its $37 to $41 per share range that it suggested the company is worth. Currently, Wendy’s shares are trading at just $28 each, however, making the offer somewhat attractive at this point.

So, what does this all mean for Wendy’s shareholders? Well, troubles among the large investment banks may have caused some problems, but there appears to be at least a few other banks that may be interested in offering additional financing if necessary. In fact, sources told Reuters that there are several other banks that are available to fill the gap. Overall, it appears that the bid may remain in tact as the auction process continues to wind down. This makes WEN a stock worth watching!

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The idea of $100 per barrel oil may not seem so crazy following actions this weekend by Venezuelan leader Hugo Chavez. The leader believes that the CIA or some other branch of the USA is attempting to influence elections in his country in order to turn popular opinion of him, which is already weighed. Consequently, he noted in a letter that he is prepared to cut the supply of oil to America if he finds evidence to support his claims – evidence which may not have to be real.

Venezuela currently provides the USA with approximately 1.3 million barrels of oil and other petroleum products per day and any cut in this number could significantly jump oil prices. Those that believe he would not take such action believe that it would hurt his economy too much to do so as many social programs he has in place depend on the country’s rich oil revenues. However, many others believe that the leader may just be crazy enough to pull it off – at least for a short time.

Let’s put this into prospective. Last week, there was an explosion on a pipeline connecting Canada’s oil with the United States that jumped oil over $4 despite the fact that it could be repaired in a matter of days. The idea of 1.3 million barrels going missing for an undefined period of time could make a substantially larger impact on the price and potentially bring it past $100 a barrel if not much higher.

So, how likely is this cut? Well, Hugo Chavez recently proposed a series of changes to his country’s constitution that would essentially convert the country into a totalitarian state from a democracy. Much of his public support stems from social programs that are highly dependent on oil revenues to sustain. So, many argue that any cut in this funding – even if for a short time – would harm the income from these operations. Meanwhile, others insist that he could turn this around and blame the United States for any economic damages that came as a result.

In the end, we know that Hugo Chavez is probably crazy enough to make such a cut but it would come at a steep cost and be somewhat risky. This means that the cut would probably not last for long. Regardless, the inevitable rise in oil prices may be of great concern for investors who are already worried about cuts in consumer spending and the economy as a whole. Combined, these factors make the political situation in Venezuela worth watching!

Activision Inc. (NDAQ:ATVI) announced this weekend that it would merge with Vivendi Games to create the world’s largest pure-play online and console game developer valued at almost $19 billion. The deal Vivendi purchasing 62.9 million newly issued shares of Activision at $27.50 per share, giving Vivendi a 52% stake in the new company to be called Activision Blizzard. Once the transaction closes in the first half of 2008, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase the remaining shares at $27.50 – a 24% premium to the company’s closing price on Friday.

Activision Blizzard is expected to have approximately $3.8 billion in pro-forma combined 2007 revenues and the highest operating margins of any major third-party video game publisher. The new franchises under this name would include World of Warcraft, Guitar Hero, Call of Duty, Tony Hawk, Spider-Man, X-Men, James Bond, Crash Bandicoot and the TRANSFORMERS line. Many investors are bullish on this pure-play saying that growth will only continue to grow as online gaming and consoles become increasingly popular – especially after the Christmas season.

So, is this good news for shareholders. Well, the deal comes in at a 24% premium to Activision’s closing price, which some may see as lacking given the strong performance of the company. Meanwhile, the new company will remain a non-public entity which means shareholders will not be able to capitalize on the synergies and pure-play nature (at least in the United States). Regardless, this situation is definitely one worth watching as it is a combination of two major industry players into one of the best pure-plays.

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The Brink’s Company (NYSE:BCO) is starting to feel the heat from activist shareholders seeking to unlock value in their investment. MMI Investments and Pirate Capital are two such high-profile hedge funds that have built up a substantial stake in the company. Many shareholders and investors are closely watching this situation as it could leave a lot of room for share appreciation.

MMI Investments, which holds 8.4% of the company’s stock, announced late last week that it intends to nominate four directors to the company’s board during its 2008 annual meeting. The nominees include John Dyson, Peter Michel, Robert Strang, Carroll and Wetzel. If elected the directors would take actions to ensure that the company acts in the best interest of shareholders to unlock value in whatever ways are possible.

“We are not seeking control of the board,” said Portfolio Manager Clay Lifflander. “We simply believe that the board as currently composed has demonstrated that it lacks the security industry prospective, strategic alternatives acumen and stockholder representation necessary to protect and maximize the value of Brink’s stockholders’ investment.”

The move follows similar actions taken by another famous activist hedge fund that demanded that the company immediately put itself up for sale back in 2006. Pirate Capital said shares of Brink’s could be worth $68 to $72 per share in the event of a sale or split-up. The hedge fund believes that a sale would attract substantial interest from other companies in the security sector that could use the acquisition to bolster their market share. However, a more difficult M&A market has put the breaks on such a deal.

Combined, these two activist hedge funds control almost 20% of the company, which should give them substantial room to get directors elected and make improvements to unlock shareholder value. If these directors are elected at the next annual meeting, we can expect the company to take some actions to return cash to shareholders and perhaps pursue some strategic alternatives. Combined, these factors make BCO a stock worth watching!

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Amgen Inc. (NDAQ:AMGN) received a boost from George Putnam's The Turnaround Letter, which called this a great opportunity to buy Amgen stock. The famed turnaround artist explained that a who's who list of value investors, including David Dreman and Bill Miller, have been accumulating the stock and he'd recommend joining them.

Here's an excerpt from the letter:

"Not only are the short-term regulatory issues abating, but more importantly, Amgen has the drug pipeline, the manufacturing capability and the financial resources to remain a leader in providing biotech solutions to the many health problems faced by the graying population across the developed world.

"While there is still a risk that Medicare and private insurers might impose restrictions that would hurt sales of the drugs, those risks are pretty well priced into the stock. Moreover, the physician community appears to favor continued widespread use of these drugs. The company is also reducing costs, which should help offset any loss of revenues from these two drugs.

"Longer term, Amgen's pipeline of products in development – targeting conditions from osteoporosis to diabetes to prostate cancer to Alzheimer's disease – is widely considered to be the strongest in the biotechnology industry.

"Over the last few years, the pipeline has more than doubled in size and become much more diverse. In 2006 the company spent $3.4 billion on research and development, and it is also willing to make acquisitions that boost the drug pipeline.

"For example, in 2006 Amgen spent $2.1 billion to purchase Abgenix, thereby greatly expanding the company's expertise with human monoclonal antibodies. Now Amgen is poised to launch Denosumab, a monoclonal antibody that helps prevent the loss of bone-mineral density, and it is viewed as having the potential to be a revenue blockbuster.

"Another strength of Amgen is its manufacturing capability. Producing biologic drugs is more complex than many other kinds of pharmaceuticals. With nearly $6 billion invested in plants and a highly trained workforce, the company is well positioned to prosper as the industry grows.

"In addition, Amgen has the financial resources, including more than $5 billion in cash, to support all aspects of its business. Today, as in 2000, Wall Street is wondering how fast Amgen will be able to grow in the years ahead. There's a big difference today, though: in 2000, the P/E ratio was as high as 77; now, it's a much more attractive 16."

Overall, this is solid research and a great recommendation to purchase Amgen stock at these low prices. Whether or not the market chooses to follow this advice remains to be seen, but AMGN is definitely a stock worth watching in the meantime!

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