Enzon Pharmaceuticals (NDAQ:ENZN) shareholders may soon be rewarded after a large shareholder expressed concerns regarding a “troubling disconnect” in the stock. DellaCamera Capital, which owns 5.2% of the company, requested that the company hire an advisor to analyze various financial and structural options and implement a cohesive financial plan of action that would deliver increased value to shareholders.

“In our opinion, Enzon’s current stock price of $9.75 represents a significant discount to the intrinsic value of the Company and in no way reflects the tremendous embedded optionality associated with Enzon’s R&D pipeline and technology platform,” said portfolio manager Richard Mansouri. “It is our belief that the corporate structure and operational complexity of Enzon have made it difficult for the investment community to accurately assess the inherent value of the Company.”

The activist hedge fund pointed out that a share price of $9.75 implies a shocking negative valuation of -$263.5 million for the company’s R&D operations that, in reality, show promise. Enzon has four products on the market that will generate an estimated $100 million in revenue in 2007. A reasonable sales multiple of 3.5x yields a value of $350 million for the marketed products alone. Add in the revenues from royalties and contracted manufacturing and you get an additional $440 million in value.

So, why is there such a value disconnect? Well, DellaCamera insists that it can be traced to the company’s complex structure. Currently, Enzon operates in two businesses: (1) a commercial business comprised of marketed products, royalties, and contract manufacturing; and (2)an R&D organization and technology platform. The profitability of the commercial operations is being completely obscured by the expenses associated with advancing the company’s clinical and pre-clinical trials. This complexity has also led to operating inefficiencies that have resulted in runaway expenses.

In the end, DellaCamera insists that the company should work to simplify its message to investors by consolidating its operations or taking other measures to unlock value. To this end, they requested that the company hire an advisor in order to explore the best options. Combined, these factors make ENZN a stock worth watching!

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The Cheesecake Factory (NDAQ:CAKE) shares spiked over ten percent today after Nelson Peltz's Star Trust revealed a ten percent stake in the company. The activist investor also requested and received early termination notice from the FTC, which is required under the Hart-Scott-Rodino antitrust law for the acquisition of stocks or assets greater than $50 million.

Nelson Peltz is well known for his activist involvement in companies like Wendy's International and H.J. Heinz Co., in which he was able to unlock substantial value for shareholders. The activist investor may see the Cheesecake Factory as a strong play in today's troubled markets. The company has shown consistent EPS growth with extremely strong financials.

So, is the Cheesecake Factory a bargain at these prices? Well, before today's move the stock was trading at just $22, which is about 17x next years estimated EPS. This is an extremely low P/E ratio that should stand around 25x, which would equate to a stock price of around $33 per share - or about 50% higher than it trades now.

In the end, this is a solid stock that is being acquired by an activist that has clearly indicated that he wants more. Whether or not Peltz plans on taking any actions to unlock value remains to be seen, but this is definitely a stock to watch in the meantime!

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Total Systems Services, Inc. (NYSE:TSS) announced that its shareholders would receive $3.03 per share in connection with the company's nearly completed spin-off from parent Synovus Financial Corp. (NYSE:SNV). Shareholders applauded the spin-off and one-time dividend as effective methods for unlocking value in the company's hares.

Synovus shareholders will receive 0.484 shares of TSYS common stock for each share of Synovus stock in connection with the spin-off. Shareholders that hold fractional shares will receive cash for the fraction. TSYS shareholders on record as of December 17th will also receive a $3.03 all-cash one-time dividend on December 31st. Combined, these two actions will divest Synovus' 80.6% stake in TSYS and enable shareholders to realize value in both.

Spin-offs in general tend to outperform the overall market for several reasons. First, parent company shareholders are occasionally uninterested or unable to hold (mutual funds, for example) stock in the spin-off and therefore automatically sell. Secondly, the management team at a spin-off company are typically heavily incentivized to perform since it is a new company that is still well capitalized. And finally, pure-play assets are typically valued higher than conglomorate assets.

In the end, this is great news for Synovus shareholders and TSYS shareholders as they will likely see a significant appreciation in value over the next two years. Combined, these factors make TSS a stock worth watching closely!

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Copart Inc. (NDAQ:CPRT) executives and board members may be in for a shake up after Jana Partners disclosed a 5 percent stake in the company, according to a Schedule 13D filing with the SEC. Jana is well known in the hedge fund community as a constructive activist that works with management to improve operations and unlock shareholder value. Many investors are hoping that they can do the same at Copart.

Many analysts have been impressed with Copart's results recently as the company generated robust organic growth, gained market share and witnessed progress at its UK operations last quarter. The auto-seller hit a 52-week high last quarter after it announced results that beat Wall Street estimates by a wide margin. Now, estimates for next quarter are being raised even further.

Copart is a provider of vehicle remarketing services in the United States and United Kingdom. The company provides vehicle suppliers, like insurance companies, with a range of remarketing services aimed at helping them process and sell salvage vehicles primarily over the internet through the company's virtual bidding internet auction-style sales technology known as VB2.

So, how does the Copart look now? Well, the company is growing at a strong pace but is priced with a PEG ratio of 1.68, meaning that it may be slightly overvalued. However, the company also has no debt and $250 million in cash, meaning that there may be opportunities to leverage up and unlock value for shareholders. Additionally, insiders still hold over 30% of the company's stock, indicating a strong belief in the future. Combined, these factors make CPRT a stock worth watching!

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Sprint Nextel Corp (NYSE:S) announced that Dan Hesse would be the company's new chief executive after Gary Forsee agreed to step down amid shareholder pressure. The move comes as the telecommunication company is struggling to regain its foothold and win back market share that it has lost over the past year. Shareholders are hoping that this could be the change needed to finally turn around the company's stock.

Dan Hesse has been serving as chief executive at Embarq, which was spun off from Sprint not long ago. His performance there and at AT&T earlier drew applause from Wall Street. Now, many are hoping that the new chief executive will be able to help the company recover from its failed 2005 merger with Nextel and help the company more effectively compete with rivals Verizon Wireless and AT&T.

The culture problems at Sprint Nextel still run deep - the two do not even share a headquarters! Sprint employees insist that Nextel's poor network infrastructure was the cause of the recent turmoil while Nextel employees insist that Sprint is an overly bureaucratic and slow-moving company that is unable to keep up with the industry trends. It was a combination of these two combined with a divided workforce that are the root of the problems today.

One other key issue will by the so-called WiMax initiative, which has proven to be a cash drain on the company. The plan involves spending a further $5 billion to build out a new high-speed wireless network using WiMax technology. The company's attempt to split the job with Clearwire Corp recently fell through while the company also rejected a $5 billion injection. This has led many to believe that the company may be willing to cut back on the program.

Overall, it will be interesting to see whether ot not Dan Hesse can integrate these two cultures and turn Sprint Nextel into a competitor once again. It will also be interesting to see what becomes of the WiMax initiative that has so many people divided. Combined, these factors make S a stock worth watching!

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Loews Corporation (NYSE:LTR) announced yesterday that it would finally separate itself from the tobacco business via a spin off of its Lorillard Tobacco interests. The diversified conglomerate had been slowly divesting its stake for some time, but has enjoyed a good ride on the stock over the past few years. Shareholders are now eyeing the new spin off as an opportunity of its own.

Lorillard Tobacco is the maker of Kent, Newport, Maverick and True brand tobacco products. The value of the division is apparent via the tracking stock setup by Loews in 2002, known as the Carolina Group. Since its inception, Loews has sold shares in blocks several times to the group. Now, Loews is finally independent enough to fully separate itself from the tobacco business.

The tobacco industry has been shaken recently by a series of mergers and acquisitions and owning a small independent company with top-notch brand names may not be such a bad move. Interestingly, the company is divesting its stake in the tobacco segment by offering one share of the new stock in exchange for one share in the company. Effectively its a share buyback.

In the end, this is good news for shareholders since it is an opportunity for them to enter a new business. Unfortunately, since the shares are optionally acquired, we will likely not see the initial selling after the spin off. Regardless, this is definitely a stock worth watching!

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PDL BioPharma (NDAQ:PDLI) announced that it has successfully sold the rights to its transplant drug IV Busulfex to Japan's Otsuka Pharmaceuticals for $200 in cash in deal that will close in the first quarter. The move should lessen the pressure on the drug maker by activist shareholders who have been pushing the company to unlock shareholder value for the past few months.

Busulfex is one of three products that PDL purchased in 2005 for $500 million in an attempt to boost earnings while it developed its own antibody drug through clinical trials. That strategy ended when activist investor Daniel Loeb's Third Point LLC forced CEO Mark McDade from office and demanded an auction of the company instead.

Third Point cashed out recently, but Highland Capital Management has taken the reins and continued to push the company towards a sale. The activist recently commented that Merrill Lynch should be eliminated and replaced by a M&A advisor more suited to their industry. However, with this recent deal completed, perhaps no change will be necessary.

In the end, PDL BioPharma is likely to continue to sell off its assets in an attempt to liquidate and unlock value for shareholders. Whether or not they will find buyers and obtain fair value for the company remains to be seen, but at least one activist investor remains bullish and this recent sale is encouraging!

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Marshall & Ilsley Corporation (NYSE:MI) announced a series of unusual events that will impact its earnings for the most recent quarter and year end. The diversified financial services company revealed a very strong capital position from a spin off amid write downs from the mortgage crisis. So, what does all of this mean in the end?

M&I announced on November 1st that it completed its spin off of Metavante Technologies, which resulted in a one-time $526 million gain and $1.665 billion in cash from the separation. The company plans on using these funds to retire approximately $1 billion worth of bonds in order to lower its borrowing costs over the next three years.

M&I also announced a $195 million write off in its loan portfolios stemming from the bank's reassessment in light of the deteriorating real estate market. The firm's loan loss provision, covering bad loans, could grow to $235 million which is up from $18.3 million in the fourth quarter of last year. Luckily, the firm remains well capitalized after the sale of its technology arm.

"Despite these challenging market conditions, we are fortunate to have one of the strongest capital positions in the industry," said Mark Furlong, president and CEO, Marshall & Ilsley Corporation. "We believe we are well positioned to weather the downturn in the real estate market."

In the end, M&I remains in good shape despite some rather large mortgage-related losses. Whether or not the bank will fully recover remains to be seen, but this is definitely a stock that it worth watching over the next few months!

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Panera Break Co. (NDAQ:PNRA) may face a shakeup after Roy Disney's Shamrock Activist Value Fund set its targets on the restaurant chain. The activist hedge fund demanded that the company declassify its staggered board and separate the chairman and chief executive roles, according to a Schedule 13D filing made with the SEC on Friday.

Shamrock, which owns 5.46 percent of the Panera, also demanded the same voting rights for all of its common stock and suggested that the company add some new board members with "relevant operating experience". The hedge fund also proposed that the company work to increase its compensation plan to provide increased transparency and urged the company to leverage its strong balance sheet to institute a share repurchase.

These initiatives are collectively designed to help the company's stock recover after dropping more than 30 percent so far this year. Separated roles and increased transparency would help the market become more trusting of the company, while a share repurchase of Class A stock would help even out the field for all shareholders.

In the end, these suggestions may increase trust and transparency, but new board members and direction will be needed to turn the company around. However, this stock is definitely one worth watching!

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The mortgage meltdown may have taken a lot of casualties, but Goldman Sachs (NYSE:GS) wasn't among them thanks to a timely bet made by the firm's structured-products trading group. The move made Goldman the only major investment bank to side-step losses during the crisis, as competitors Lehman, Bear Stearns and Merrill Lynch continue to suffer.

The trader group's large bet that securities backed by risky home loans would fall in value generated nearly $4 billion in profits this year, according to the Wall Street Journal. Those gains erased the $1.5 to $2 billion of mortgage-related losses elsewhere in the firm and put the firm on track to record record net annual income of more than $11 billion.

There has been some concern, however, over the firm's trading practices. Goldman's proprietary traders are allowed to "find opportunities" for the firm's capital while making a market for client trading - even if the client's are trading the other end. Interestingly, the firm continued to push its CDO sales through even while its own traders were shorting the issues, planning to profit on their demise. Goldman says the two branches are separate divisions and unrelated.

Unfortunately, the credit markets may cause a whole new set of problems for the firm. Many analysts have been downgrading investment banks, including Goldman, even more amid concerns that tight credit markets will limit M&A activity income and put a damper on the credit securities market. How much this affects Goldman remains to be seen, but given the firm's success during the mortgage meltdown, who's to say?

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