The market for location based GPS products is expected to increase 168% in 2008 with aggregate revenues for the sector growing by 169%, according to Gartner Research. The same research firm also predicted that the number of GPS subscribers would reach nearly 300 million with revenues expected to top $8 billion by 2011. So, what stocks should investors watch?

The most famous GPS stock is Garmin Ltd. (NDAQ: GRMN), which pioneered the idea of using GPS devices on automobiles to give directions. However, their success also bread a lot of competition that has now put pressure on its margins and growth rates. Moreover, GPS devices have become somewhat ubiquitous in new vehicles, so many manufactures just look for the cheapest.

The next big things in the GPS market are so-called personal location devices that can be used to keep track of children, the elderly, pets, vehicles and just about anything else. The pioneer of this industry is a small public company called Location Based Technology (OTC-BB: LBAS), which has produced the PocketFinder® line of devices. Check out PocketFinder.com to see their products.

The PocketFinder® line of products includes the smallest single-board GPS device on the market (about the size of an Oreo) along with award-winning personal GPS software that can run on many platforms. The product is set to be released in the first quarter of this year while the software has already been downloaded more than 10,000 times on many compatible smartphones, including the Apple iPhone.

PocketFinder® products and services can help customers triangulate a position and get directions to the device, calculate the distance traveled by and the speed of the device, alert when a pre-set boundary for the device has been violated, and much more via the unique software. The possibilities for these devices are endless between consumers tracking their children and pets and small businesses looking to track their assets!

Related Companies
Garmin Ltd. (GRMN)
Trimble Navigation Limited (TRMB)
KVH Industries, Inc. (KVHI)

Penwest Pharmaceuticals (NDAQ: PPCO) may see some changes during the next annual meeting after a large shareholder proposed a new slate of directors for the board. Perceptive Life Sciences, Tang Capital Partners, and their affiliates collectively own 37.5% of the pharmaceutical company and nominated Joseph Edelman, Keven Tang, and Andrew Levin to the board at the 2009 annual meeting.

Investors should be careful before they vote in the new board members, however. Some rhetoric contained within a Schedule 13D filing with the SEC raises some questions. The funds commented:

While we strongly believe that changes to the board of directors are in the best interest of all shareholders of the company, … [we] may receive unique benefits if the nominees set forth herein are elected to the board. Such unique benefit will, if realized, result from the fact that the nominees are principals within our respective organizations and may be more receptive to our suggestions than any of the members of the board not affiliated with us.

These nominees may prove to perform better than the existing board, but the risk is that the principals will act in a more selfish way by promoting their own returns. Such deals could include financing deals between the company and hedge fund on above-market terms, the sale of assets to the hedge funds at below-market prices, and other actions that destroy shareholder value. The question for investor is: Is the risk worth it?

Related Companies
Mylan Inc. (MYL)
Endo Pharmaceuticals (ENDP)
Johnson & Johnson (JNJ)

Tikcro Technologies, Ltd. (OTC-BB: TIKRF) board members may be in for a fight after a large shareholder made several demands. Steven Bronson, who owns a 14.9% stake in the company, sent a letter to the board of directors demanding that it schedule a special meeting so that shareholders could vote on three proposals that it put forth in a Schedule 13D filing with the SEC.

The activist investor proposed three things:

1. Distribute $7.7 million of the approximately $7.9 million of the company’s cash and short-term investments to the shareholders of the company on a pro rata basis.
2. Distrubte the company’s BioCancell securities to the shareholders of the company on a pro rata basis.
3. Maintain the company as a public shell with $200,000 in cash to pay operating expenses while trying to consummate a sale or merger with a viable business.
   

The cash distribution would result in a distribution of $0.91 per share given the 8.45 million shares outstanding. Meanwhile, BioCancell’s securities are not publicly traded, but their value could increase substantially in the event that it does go public. Given the current share price of just $0.50 per share, this could represent opportunity for investors who believe that the proposal will pass.

Related Companies
Teva Pharmaceuticals (TEVA)
Rosetta Genomics Ltd. (ROSG)
XTL Biopharmaceuticals (XTLB)