General Motors (NYSE:GM) may see increased downward pressure today as Tracinda revealed in a 13D/A filing that it sold another 14 million shares in a private transaction at $28.75 per share - a few points below the current market price. This move brings the hedge funds stake down to 4.95% from 7.4% just a few days ago on November 22nd and 9.9% earlier this year. Tracinda began selling its stake in GM after Jerome York - the funds representative on GM's board - resigned after partnership talks between GM and Nissan-Renault broke down in October. GM shares are down almost 1% in mid-day trading today.

Related Companies
Ford Motor Company (F)
Toyota Motor Corporation (TM)
Honda Motor Co., Ltd. (HMC)

Brocade Communications (NDAQ:BRCD) revealed in a form 4 filing with the SEC after the close yesterday that the company's CEO exercised 1,079,943 options at between $4.55 and $6.00, and then sold 1,679,943 shares at $8.97.

Carriage Services Inc. (NYSE:CSV) revealed in a form 4 filing with the SEC yesterday that the company's chairman purchased 27,100 shares between 11/27 and 11/28 at prices between $4.93 and $5.00, bringing his stake to 952,965 shares.

Home Solutions of America Inc. (NDAQ:HSOA) revealed in a form 4 filing with the SEC yesterday that the company's president purchased 20,000 shares on the open market at $5.48, bringing his stake up to 218,930 shares.

TD Ameritrade Holding Corporation (NDAQ:AMTD) revealed in a form 4 filing with the SEC yesterday that the company's director purchased 10,000 shares on the open market on November 27th at $17.10, bringing his stake to 25,200 shares.

Apple Computers, Inc. (NDAQ:AAPL)
SEC Filing Watchlist
The company applied for a patent for a cellphone/iPod combination. The patent application indicates it invented the phone/iPod combination and filed for it in August, but didn't announce it publicly until today.

Cal Dive International, Inc. (NYSE:CAL)
S-1/A Filing with the SEC
The company indicated in an S-1/A filing with the SEC that it sees an IPO price of $14 to $16 per share on 22.2 million shares. The company is a subsidiary of Helix Energy Solutions Group, Inc. (NYSE:HLX), an energy services company. In early March 2006, the parent company changed its name from Cal Dive International, Inc. to Helix Energy Solutions Group, Inc. The new company is to become the heir to all of Helix’s shallow water marine contracting business. After the offer is made, Helix will own nearly 62 million of the company's outstanding shares of common stock.

Pfizer Inc. (NYSE:PFE)
8-K Filing with the SEC
The company announced a favorable trend in revenues in the fourth quarter and expects 2006 revenues to be slightly higher with lower costs. The company predicts that the adjusted EPS for 2006 will be at least $2.05 per share compared to its previous estimate of about $2.00 per share; meanwhile, analyst consensus stands at $2.02. Pfizer held a meeting today in which it reviewed the largest pipeline in the company's history, running a total of 242 programs that span eleven therapeutic areas.

Pirate Capital LLC recently released a 13F filing showing its holdings, which have been significantly decreased since the hedge fund's shakeup back in October when it failed to disclose its sale of OSI Restaurants in a timely matter. More recently, the fund announced that it sold its 4.8 million share stake in Mirant Corporation (NYSE:MIR). A list of Pirate Capital's holdings as of September 30, 2006 can be viewed in their latest 13F filing with the SEC.

Here are some of their largest holdings:

1. Intrawest Corp - This is a company in which Pirate has over $300 million invested, and it is finally paying off. Intrawest's board agreed to sell the company to Fortress Investment Group for $35 per share in cash. Mr. Hudson said, "We commend the Board of Directors and the Executive Management for conducting the broad and thorough strategic review that resulted in the sale of Intrawest. We would like to congratulate the Board and Management for delivering value to their shareholders." Pirate was a buyer between $26 and $30 per share, making them a significant winner on this play.
2. The Brink's Company (NYSE:BCO) - This is a company in which Pirate has over $209 million invested. Recently, on November 11th, Pirate encouraged the company to explore a sale, start a large Dutch tender offer for its shares, and immediately appoint Pirate founder Thomas Hudson to its board; however, the company still appears to be ingoring their requests and pursuing an acquisition instead. It was after this that the hedge fund angrily noted, "We are concerned that shareholder propositions are falling upon deaf ears" and submitted proxy materials in a recent 13D/A filing in a move to bring the issue to shareholder attention.
3. Walter Industries (NYSE:WLT) - This is a company in which Pirate has over $135 million invested. The company moved up today after it resolved a lawsuit involving CC Arbitrage Ltd. and CNH CA Master Account L.P., who agreed to dismiss all claims, and immediately convert their convertible senior subordinated notes to the company's common stock. In this case, Pirate successfully convinced the company to spin-off its whole-owned Mueller subsidiary back in May of 2006. Meanwhile, the hedge fund recently cut its stake and remained silent. Other objectives it had on the table since its last filing in October of 2005, included the sale of its other Finance and Homebuilding subsidiaries. However, the multiples for these sectors are not high enough at this time to justify a sale.

As you can see, the process of unlocking shareholder value can take a lot of time and has no certain outcome. However, when it does work - as in the case of Intrawest - handsome profits can be made. And with over $1.4 billion invested, Pirate Capital is one of the best activist hedge funds to keep an eye on!

Home Depot (NYSE:HD) may be seeing some private equity interest according to reports on CNBC. There is speculation that the company could go for as much as $100 billion, although many analysts remain skeptical. Charlie Gasparino reported that KKR has already crunched the numbers for a potential bid to take the company private, while there is also talk of other potential HD bidders on the floor. The interest comes after the stock has fallen from a high of nearly $45 in early 2006 to its current levels around $35 per share, down over 8% on the year.

Many attribute this drop to poor performance by the company's CEO Nardelli along with declining market conditions. Meanwhile, their main competitor - Lowes - has beat the company on almost every metric. Lowe's revenues grew 130% compared to HD's 78%; Lowe's ROA increased 52% while HD's hardly increased at all; and finally, Lowe's customer service rating rose to 78 from 75, while HD's decreased to 67 from 75 during the same time period. Combined, market conditions and poor management may have made this stock cheap enough for private equity to seriously consider. This makes Home Depot a stock to keep an eye on over the next few months.

Related Companies
Lowes Companies, Inc. (LOW)
Conn's Inc. (CONN)
Building Materials Holding Corporation (BMHC)

Tribune Company (NYSE:TRB) announced yesterday that it would be extending its strategic review process, saying the committee would be prepared to make a final recommendation to the board in the first quarter of 2007. Reuters is reporting that three private equity groups have made a bid for the company, including a group consisting of Texas Pacific Group and Thomas H. Lee Partners and another that includes Madison Dearborn Partners, Providence Equity Partners and Apollo Management, and Bain Capital. Other interested parties include: the Carlyle Group, billionaires Eli Broad and Ron Burkle, Maurice Greenberg of AIG, and several others.

The company said that it is seeking a single buyer for its television and newspaper units. With all of this interest, the company is in a great position to sell off its company at a substantial premium to the current prices. To date, the company has sold approximately $450 million of non-core assets. This is definitely a company to watch closely as this situation unfolds.

Related Companies
Washington Post Co. (WPO)
Gannett Co., Inc. (GCI)
CBS Corporation (CBS)

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NDAQ:OMAB)
S-1 Filing with the SEC
Mexican airport operator Grupo Aeroportuario del Centro Norte, commonly known by its trade name OMA, began trading today. The stock opened higher than predicted, at $22.08 after pricing at $18.00, above the expected $14.50 to $16.50 range. Grupo Aeroportuario del Centro Norte operates thirteen international airports in nine states of central and northern Mexico. OMA's airports also serve Monterrey, Mexico's third largest metropolitan area, a few tourist destinations, and nine other regional centers and border cities.

The New York Times Company (NYSE:NYT)
SEC Filing Watchlist
The New York Post reported today that Greenberg has made an effort to buy a controlling stake in the New York Times, in order to break the Sulzberger family's control of the company. Later, Greenberg's spokesman said he has no intentions of increasing his stake beyond his 100k shares; nevertheless, CNBC's Charlie Gasparino's follow-up reports on the story moved NYT up 7.5% in today's trading.

Wireless Ronin Technologies, Inc. (NDAQ:RNIN)
SB2-A Filing with the SEC
Shares of Wireless Ronin Technologies, a digital signage company, soared 57% today on its second day of trading with a volume of 5.5 million shares. Strangely, this move comes after the stock IPO'd yesterday at $4 per share, where it closed at $4.58 on volume of 1.6 million shares.

Cyberonics, Inc. (NDAQ:CYBX) holder Metropolitan Capital Advisors demanded today that director Kevin Moore immediately be removed from the company's board, calling his position a "glaring violation of law and appropriate corporate governance practices". The move was backed by the Coalition of Concerned Cyberonics Shareholders, who collectively own 7.33% of the company. According to a letter filed with the SEC:

"'Given Mr. Moore’s longstanding close friendship with Robert Cummins — dating back to their days at Dartmouth together in the 1970’s —we are particularly disturbed that Mr. Moore, who we believe was not lawfully a Member of the Board, served on the Board’s Compensation and Nominating and Governance committees and participated in the decision to not only approve the new compensation package for Mr. Cummins in 2005, despite the existing contract having nearly three more years left to run, but his severance package as well,' Karen Finerman and Jeffrey Schwarz of MCA said.

According to the Company’s public filings, Cyberonics entered into a March 28, 1997 letter agreement (the "Letter Agreement") with the Clark Estates that, upon closing of its pending investment in the common stock of Cyberonics, entitled the Clark Estates to designate one member to the Cyberonics Board to serve for as long as the Clark Estates retained at least 600,000 of the 901,408 shares of the Company that it purchased on that date. Purportedly pursuant to this provision, approximately seven years later Mr. Moore was appointed to the Company’s Board on January 13, 2004 and has remained on the Board since then, despite not standing for election at the Company’s 2004 or 2005 annual meetings of shareholders. Mr. Moore’s purported status as a perpetual director of the Company, however, violates the Letter Agreement, the Company’s bylaws and the Delaware General Corporation Law.

Given that the Company is not, and could not be, contractually bound to allow Mr. Moore to serve as a director despite not being elected by the Company’s shareholders, MCA demands that the Company immediately relieve Mr. Moore of his position as director and that he return the fees and stock options he was awarded during the period when he was improperly serving as a director. If the Company fails to take such action within 10 business days, Metropolitan Capital Advisors, Inc. and The Committee for Concerned Cyberonics Inc. Shareholders will bring an action in the Delaware Court of Chancery to compel it to do so." (Read More)

Just recently, the coalition succeeded in ousting ex-CEO Robert Cummins; however, he was awarded a generous severance package due to Moore and others close to him that serve on the compensation committee. After the removal of the director, the coalition plans to locate a new CEO which it hopes will help turn the company around. This stock is definitely one worth watching as corporate governance is improved and changes are made to help the company turn itself around.

Related Companies
Medtronics, Inc. (MDT)
Biomet, Inc. (BMET)
Steris Corporation (STE)

The Pep Boys - Manny, Moe & Jack (NYSE:PBY) is seeing increasing interest from activist hedge funds Pirate Capital and Barington Capital, who both disclosed transactions as recently as November 21 in 13D/A filings with the SEC. Pirate disclosed that it now owns 11.7% of the company and has succeeded in installing Mr. Hudson on the company's board of directors. Meanwhile, Barington has amassed a 9% stake in the company, but gave no further details. Although their most recent 13D/A filings do not disclose any specific plans, both of these hedge funds are well known for unlocking shareholder value in the short-term through changes made to capital structure, special dividends, and outright sale of the companies they take over. This makes Pep Boys a stock to keep a close eye on in the coming months.

Related Companies
Advance Auto Parts, Inc. (AAP)
AutoZone, Inc. (AZO)
CSK Auto Corporation (CAO)

Dollar General Corp. (NYSE:DG)
SEC Filings Watchlist
Merger Market analyst Josh Kosman told CNBC that the private equity firms Cerberus Capital and Bain Capital are both pursuing Dollar General Corp. However, it is unclear whether the Fortune 500 discount retailer is interested in selling to either of the two firms. Dollar General has over 8,000 stores nationwide.    
   
Harrah's Entertainment Inc. (NYSE:HET)
SEC Filings Watchlist
David Faber of CNBC stated that there is an additional bid out for Harrah's Entertainment Inc. by the Penn National Gaming Inc. (NDAQ:PENN) group, including DE Shaw, Lehman Brothers, and Wachovia. Harrah's is already mulling over a bid from Apollo Management Group and the Texas Pacific Group, which stands at $83-$84 per share. It is uncertain whether or not this additional bid is being considered.

Artes Medical (NDAQ:ARTE)
S-1 Filing by the Company
In a S-1/A filing with the SEC, Artes Medical said it is predicting an IPO price of $12-$14 per share on 4.6 million shares. The medical technology company plans to list on the Nasdaq under the symbol "ARTE".  Artes Medical develops, manufactures, and commercializes a new category of injectable aesthetic products for the dermatology and plastic surgery markets.

Interactive Brokers Group, Inc. (NDAQ:IBKR) will be the next major financial IPO to watch, as it filed its S-1 registration statement with the SEC today. This latest IPO comes amid heavy M&A activity, a great IPO market, and strong performance by many players in the financial sector - particularly exchanges and investment banks.

Their S-1 filing with the SEC gives more details about the company:

"We are an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures and foreign exchange instruments as a member of more than 60 electronic exchanges and trading venues around the world. Since our inception in 1977, we have focused on developing proprietary software to automate broker-dealer functions. The advent of electronic exchanges in the last 16 years has provided us with the opportunity to integrate our software with an increasing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.

Our high degree of automation enables us to process approximately 500,000 trades per day with approximately 500 employees. During 2005 and for the nine months ended September 30, 2006, we generated pretax income in each period at a rate of more than $1 million per employee. Publicly available data regarding other companies in the securities and commodities industry indicate that this level of productivity is unparalleled for our industry. Automation has allowed us to become one of the lowest cost providers of broker-dealer services and to increase significantly the volume of trades we handle. According to data compiled by the Futures Industry Association (FIA) based on data received from exchanges worldwide, during the nine months ended September 30, 2006, we accounted for approximately 16.0% of exchange-listed equity options volume traded worldwide and approximately 18.8% of exchange-listed equity options volume traded on those markets in which we actively trade. We were the number one or number two liquidity provider on each of the three largest U.S. options exchanges (the Chicago Board Options Exchange, the International Securities Exchange and the Philadelphia Stock Exchange) during the nine months ended September 30, 2006, according to rankings provided by these exchanges. We serve sophisticated and active customers worldwide, including institutional investors, financial advisors, brokers and individuals." (Read More)

Given the M&A activity in the overall market (and especially the financial sector), this IPO may see significant interest and upside. Moreover, as such a prominent player in providing liquidity, it may be a takeover target for either another broker or even an exchange interested in diversifying its revenues. The high degree of automation in this company also makes it extremely capital efficient and profitable on its own. Combined, this company is definitely worth watching as a takeover target as well as a strong independent company.

The recent wave of M&A activity by private equity has caused a lot of speculation on the street as to who's next. A Barrons article over the weekend listed several LBO targets that analysts are currently watching. Here's a list of the companies mentioned:

Oil/Energy Companies

• Apache Corporation (NYSE:APA)
• Valero Energy (NYSE:VLO)
• Hess Corporation (NYSE:HES)
• Transocean, Inc. (NYSE:RIG)

Consumer Product Companies

• Kimberly Clark Corporation (NYSE:KMB)
• Estee Lauder Companies Inc. (NYSE:EL)

Homebuilder Companies

• KB Home (NYSE:KBH)
• DR Horton, Inc. (NYSE:DHI)
• Lennar Corporation (NYSE:LEN)
• Toll Brothers, Inc. (NYSE:TOL)
• MDC Holdings, Inc. (NYSE:MDC)
• Hovnanian Enterprises, Inc. (NYSE:HOV)

Technology Companies

• Linear Technology Corporation (NDAQ:LLTC)
• Maxim Integrated Products, Inc. (NDAQ:MXIM)
• Analog Devices, Inc. (NYSE:ADI)
  
• Altera Corporation (NDAQ:ALTR)
• Xilinx, Inc. (NDAQ:XLNX)

With a record $350 billion in deals this year alone by private equityy, many more acquisitions may lie ahead. These are some stocks to watch in the event of future leveraged buyouts; any such acquisitions would likely come at significant premiums to the current market price.

Here are some of the takeover targets mentioned in the media today:

• Allstate (NYSE:ALL) was mentioned by the Chicago Tribune - quoting a Morgan Stanley report - as a potential financial-services consolidation play.
• Armor Holdings (NYSE:AH) was mentioned in BusinessWeek's Inside Wall Street column as a potential takeover target for Lockheed Martin (NYSE:LMT).
• Boyd Gaming (NYSE:BYD) was also mentioned in BusinessWeek's Inside Wall Street column as a possible gaming consolidation play after Harrah's and Aztar recently closed such transactions.
• Sangamo (NDAQ:SGMO) was also mentioned in BusinessWeek's Inside Wall Street column as the next biotech takeover, with partnerships already in place with Pfizer and Dow Chemical.
• Technip (NYSE:TKP) was mentioned in La Tribune (a French newspaper), which stated Italian oil company Eni SpA may make a bid for the company.

Strong corporate performance and favorable economic conditions have spurred record M&A numbers this year. Until conditions change this trend is likely to continue, particularly in financial services and gaming. As a result, these stocks are definitely ones worth watching as any buyout would come at a significant premium to the current market price.

Northwest Airlines (OTC:NWACQ) moved up over 30% today after Owl Creek Asset Management - a 5% holder in the company - said that the company could be worth as much as $19.75-$33.50 per share in the event of a merger with Continental Airline (NYSE:CAL). How do they come up with this valuation?

Let's take a look at their 13D/A filing with the SEC that details their analysis:

"Though it is early to value Northwest for recovery purposes, Owl Creek submits that, based on Wall Street analyst reports, the trading markets value Northwest's legacy carrier peers (American, Continental, United, and US Airways) at 5-1/2 to 6 times "EBITDAR."(3) Carriers like Northwest with a higher likelihood of being a merger candidate trade for more than 6x EBITDAR and carriers with a lower likelihood of being a merger candidate trade closer to 5.5x EBITDAR. Based on similar 2007 fuel price assumptions to those underlying the comparable company valuations, Owl Creek forecasts Northwest's 2007 EBITDAR to be $2,700,000,000. Given a valuation of 6.0x 2007 EBITDAR, Northwest should have a total enterprise value of over $16,200,000,000 at the time of its expected emergence from bankruptcy protection in September of 2007. With a cash build up of over $1,000,000,000 during the remaining pendency of the bankruptcy cases, this would result in an equity value of $19.75 per share AFTER covering all claims with interest and the preferred stock.

Furthermore, US Airways' hostile offer for Delta Airlines last week -- aside from signaling directly the consolidation trend in the legacy carrier market from which Northwest's value undoubtedly will increase -- demonstrates the inherent value, recoverable by Northwest's equity holders, that a merger of Northwest with a strategic partner will create. US Airways announced that it expects the combination to generate $1,650,000,000 of annual synergies, which is 6.2% of the combined Delta/US Airways passenger sales. Assuming comparable proportional synergies to a Northwest merger with Continental (Continental Airlines is the most logical partner, but this analysis would be equally applicable to another carrier), then the synergies generated by a combination of Continental Airlines with Northwest would be approximately $1,250,000,000 annually. Valuing the company at a post-merger multiple of 5.25x EBITDAR including one half of the synergies accruing to Northwest (the other half to the merger partner) results in an implied stock price of $33.50 per share.

This is not a "what if" analysis. Experts have been calling for consolidation for some time, and US Airway's offer for Delta Airlines suggests the starting point. SEE, E.G., Benjamin Silverman and Susan M. Donofrio, TWO EVENTS MAY TRIGGER AIRLINE CONSOLIDATION THIS FALL, Cathy Financial Industry Report, September 22, 2006; Jeff Bailey, A REVITALIZED US AIRWAYS IS CREATING A MERGER BUZZ, N.Y. Times, July 31, 2006, at C2 ("The surprising early success of US Airways Group, the result of a merger last year, has led to some behind-the-scenes talks among investors and airline executives that could lead to more industry consolidation in the months ahead"); Susan Carey and Melanie Trottman, MERGER TALKS BRING OUT FEAR OF FLYING, Wall Street Journal, April 21, 2006, at C1 ("Most airline investors agree that consolidation would be great for an industry with too many airlines chasing too few dollars"). The value of the mergers becomes immediately apparent in the change in trading prices of Delta Airlines unsecured bonds following the November 15, 2006 announcement of US Airways' offer. The trading price of Delta Airlines bonds increased by fifty percent in the week after the announcement, and Delta's board has neither accepted nor closed that transaction yet." (Read More)

NWACQ is currently trading at just $3.49 per share, making the above valuations seem somewhat outrageous. In reality, the assumptions above are correct; however, everything depends on the airline's ability to pull itself out of bankruptcy and successfully orchestrate a merger. It is this risk premium that is keeping the stock at its low levels. This is definitely a stock to watch; however, prudent investors may want to wait until the bankruptcy picture clears up before investing a significant amount of capital.

Related Companies
AMR Corporation (AMR)
UAL Corporation (UAUA)
Continental Airlines (CAL)

Blockbuster Inc. (NYSE:BBI) moved up 12% in mid-day today after Chairman/CEO John F. Antioco disclosed a 220,000 share purchase at $4.66 after the bell yesterday in a form 4 filing with the SEC. This move marks a continuation of BBI's bullish run from $3.74 in mid-October to its current level of $5.10. The $1 million transaction also came just before today's news that Papa John's and Blockbuster would be teaming up to promote their online properties - an area in which Blockbuster is struggling. The new agreement allows Papa John's customers to sign up for a free trial of Blockbuster's online DVD rental service by going to Papa John's website - in exchange, the pizza maker is offering a $10 gift card.

Also worth noting, Fitch also boosted the company's outlook from "stable" from "negative" earlier this week citing improved financial flexibility, a stronger liquidity position and cost-cutting efforts. The ratings firm also warned, however, that Blockbuster's revenue growth continues to be hurt by structural changes in the industry, competitive factors and its 2005 decision to eliminate late fees. Clearly, there are still a lot of problems left for this company to address; however, improvements to their online renting program and strong insider buying may prove to be the forumla to success. This stock is definitely one worth watching in the coming months.

Related Companies
Netflix, Inc. (NFLX)
Movie Gallery, Inc. (MOVI)
Hastings Entertainment (HAST)

MGM Mirage (NYSE:MGM) moved up almost 10% today after receiving a $825 million tender offer for 15,000,000 shares at $55/share from billionaire investor Kirk Kerkorian's Tracinda Corporation. The move would up Tracinda's stake from 56.3% to 61.7% with over 173 million shares. MGM Mirage owns the MGM Grand, Luxor, Bellagio and other casinos in Las Vegas along with gaming properties in other Nevada cities and Atlantic City. The moves comes as the entertainment industry has been witnessing increased M&A activity after Harrah's private equity takeover. According to the SC TO-C filing by Tracinda: "This tender offer demonstrates our confidence in MGM MIRAGE and its management and our commitment to the company’s future." While the transaction has yet to be completed, this move does strengthen confidence in the company's future given the billionaire investor was willing to tender these shares at a 12% premium to the going market price. Moreover, in an industry where there has been so much M&A activity lately, we can't rule out the possibility of a buyout or transaction that reward shareholders. Combined, these facts make MGM a stock to keep a close eye on.

Related Companies
Harrah's Entertainment, Inc. (HET)
Las Vegas Sands Corp. (LVS)
Aztar Corporation (AZR)

Parlux Fragrances Inc. (NDAQ:PARL) may soon find itself in trouble as 12.2% holder Glenn H. Nussdorf steps up his efforts to turn around the company. Many may remember our coverage of this story in October, after Nussdorf said he is interested in potentially acquiring the company. His most recent filing today is aimed at speeding up this process by removing the Board of Directors and reinstating his own members in an effort to unlock shareholder value through a potential sale of the company.

According to the 13D/A filing:

"As the beneficial owner of a substantial percentage of the outstanding shares of Parlux, I believe that much can be done to increase shareholder value and that it is time for immediate change at both the Board and management levels. The decline in the Company's share price from a high closing price of $18.96 earlier this year (after adjusting for a 2-for-1 split in June 2006) to the current $6.26 level (a decrease in shareholder value of 67%), the Company's recent disclosure of decreased sales and earnings for the quarter ended September 30, 2006, and the allegations in the recently amended class action lawsuit that the Company improperly recognized revenues on sales to related parties, have led me to conclude that the Board of Directors is failing to act in the best interests of the Company's shareholders and is not exercising appropriate oversight of management. I am convinced that a continuation of the status quo risks a further destruction of shareholder value and, accordingly, I intend to protect the value of my significant investment in the Company through a consent solicitation to replace members of the Board of Directors.

As I have publicly disclosed in my Schedule 13D filing, I am exploring the possibility of making an acquisition proposal to acquire the Company in a business combination transaction. While I have not made a decision at this time whether to pursue such a proposal, I strongly urge the Board not to take any action (such as the previously announced and subsequently abandoned sale of the Perry Ellis brand) which would materially modify or impact the Company's business, products or assets and could adversely effect the Company's value. In addition, the consent solicitation will present Parlux shareholders with a unique opportunity to express their views on the future direction of the Company." (Read More)

A lot of people have incurred substantial losses on PARL and Mr. Nussdorf contends that the only way to bring the company back is through replacing the Board of Directors. Although proxy battles can be long an arduous, shareholders will finally be able to take action against the Board of Directors that has watched this company decline for so many months. This is definitely a stock to watch; however, it is important to remember that the turnaround process takes a long time to complete, so it may be best to stay on the sidelines until the picture clears up.

Related Companies
E Com Ventures, Inc. (ECMV)
Avon Products, Inc. (AVP)
Inter Parfums, Inc. (IPAR)

Pogo Producing Co. (NYSE:PPP) moved up over 6% in today's trading after Daniel Loeb's activist hedge fund Third Point LLC disclosed a 7.2% stake in the company. The hedge fund most recently succeeded in its attempt to gain a seat on the board of Nabi Biopharmaceuticals (NDAQ:NABI) after it threatened management with a proxy battle.

Pogo also saw interest from Texas billionaire Robert Rowling who disclosed a 9.21% stake in the company on October 6th of this year. Although Third Point's 13D filing does not mention any particular plans as of yet, the hedge fund is very well known for taking an active role in unlocking shareholder value. Typically activist hedge funds focus on selling the company, selling off specific assets, returning excess cash to shareholders, and/or working with management to improve the company's bottom line. This makes PPP a stock worth watching closely over the next few months.

Related Companies
Apache Corporation (APA)
EOG Resources, Inc. (EOG)
Forest Oil Corporation (FST)

Brinks Co. (NYSE:BCO) may find itself in hot water soon as Pirate Capital suddenly took a more active role in its investment. In a 13D/A filing with the SEC today, the 8.5% holder demanded that the company (i) take immediate steps to unlock long-term shareholder value by retaining an investment bank to explore the sale of the company and initiate a large Dutch tender offer for the shares, and (ii) immediately appoint Thomas R. Hudson Jr. to the board. This move comes after Brinks failed to listen to Pirate's past requests to retain an investment bank and instead announced plans for its own acquisitions.

According to a letter attached to the filing:

"The purpose of this demand is to enable the Fund and its affiliates to communicate with the Company's shareholders on matters relating to their interests as shareholders or beneficial owners with respect to a shareholder proposal set forth in the Fund's notice to the Company of even date herewith and, possibly, to facilitate and support a proxy solicitation of the Company's shareholders to elect one or more members of the board of directors of the Company, including the undersigned, which the Fund is contemplating but has not decided upon." (Read More)

Nobody wants a proxy battle, as they are a long and expensive process (and Pirate has a lot of experience!). Therefore, it is likely the company will take this as a hint and start a dialog between the two parties. In the end, it is likely that hedge fund will receive a spot on the Board and head a committee to explore strategic alternatives. If the company is indeed undervalued and this idea has merit, then this proposal will be put to a shareholder vote at an annual meeting. Although this is all a very long process, it definitely makes BCO a stock worth watching, since any buyout comes at a premium to market prices.

Related Companies
EGL, Inc. (EAGL)
Kitty Hawk, Inc. (KHK)
Protection One, Inc. (PONN)

Carmike Cinemas Inc. (NDAQ:CKEC) revealed today in a Form 4 filing with the SEC that Chairman/CEO Michael Patrick purchased 48,100 shares in a transaction valued at over $900,000. This transaction brought his stake in the company to 360,313 shares. We first started covering this company back in September, when we noticed Watershed's interest in the company. Since then, the stock has moved up over 15% as the company recently announced plans to raise refreshment and ticket prices at its theaters in an effort to increase revenues. The company also said that its pre-showing advertising revenues rose, while they are implementing new technologies to help the ease of switching show times and movies. Investors were also pleased to hear that there would be no more fees from restatements, which plagued the company's earnings for several quarters in the past. News of the insider's purchase helped the stock move up over 4% today in intraday trading.

Related Companies
Regal Entertainment Group (RGC)
The Marcus Corporation (MCS)

The exchanges continued their move higher today as Nasdaq Stock Market Inc. (NDAQ:NDAQ) made yet another bid to acquire the London Stock Exchange (LON:LSE), revealed in an 8K filing with the SEC. The world's second largest stock exchange upped its bid by 25% to $1.5 billion in an attempt to create the world's largest trans-Atlantic exchange, however the LSE again rejected its bid as inadequate. But the Many are saying that the LSE is holding out for a white knight that will acquire the company; however, the Nasdaq recently upped its LSE holdings by an additional seven million shares, which makes rival bids even more unlikely. At this point, it is likely that the LSE will solicit other bids for the company from other potential candidates and/or demand a higher premium from Nasdaq. The company refused to comment, but said it would issue a press release later today on the matter.

This move comes as many of the exchanges have been making moves to consolidate, driving up prices to new record highs and helping the Nymex Holdings Inc. (NYSE:NMX) set a new record on its IPO. Stock exchanges in particular have been looking to expand overseas as an increasing volume of new issues are taking place outside of U.S. borders. While Nasdaq has been targeting the LSE, NYSE is in the process of acquiring Euronext (based in Paris), which it struck a deal with earlier this year, pending shareholder approval. It is likely that this consolidation will continue, driving up the exchanges even more going into 2007. These are all definitely stock to keep a close eye on!

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Triad Hospitals Inc. (NYSE:TRI) received yet another letter from TPG-Axon Capital Management encouraging the board to implement changes to help increase shareholder value. This new letter expands on what the fund previously stated ahead of its talks with management to take place later this year.

In the letter, the fund states:

"We are focused on the company's strategy and execution, which RELATIVE to industry peers has delivered sub-par returns. We believe Triad's hospital assets are high quality, and generally well-positioned. As such, the company should trade at favorable valuations to industry comparables. HOWEVER, INSTEAD, TRIAD HAS REGULARLY TRADED AT A SIGNIFICANT DISCOUNT TO INDUSTRY PEERS, AND CURRENTLY TRADES AT THE LOWEST VALUATION IN THE INDUSTRY. Why? In stark contrast to its peers, Triad has achieved poor return on investment and diluted its shareholders. Unfortunately for shareholders, capital spending and management compensation have been high relative to the industry, but growth (per share) and returns have been low. We believe that it is time to put an end to this dilutive strategy, and that the Directors and management must finally begin to show discipline, and focus on creating value for shareholders." (Read More)

To accomplish these goals, the fund created a more indepth outline of what needs to be done:

• Significantly amending the composition of the board, in order to improve the depth of financial sophistication, and also to include representation from shareholders. The current board is simply not credible as a guardian of our capital.
• The company should focus on improving and optimizing existing assets. It is critical that focus be placed on improving the company's analytical tools and controls. Margins must be improved, capital expenditures must be rationalized, and issues like bad debt must be analyzed carefully. Ultimately, until the current assets have been optimized and management control has been enhanced, it does not appear sensible to continually expand, and increase complexity.
• Capital usage strategy should be dramatically altered. Instead of aggressive spending on capital expenditures and acquisitions, the company should reduce expenditures to levels needed to optimize existing assets. Excess cash flow should be returned to shareholders, via dividends or share buyback.
• The company has the flexibility to increase leverage significantly without impairing operating flexibility, or increasing risk to imprudent levels. Rather than keeping this capacity as a 'war chest', the company should instead use it to optimize the capital structure, and generate return for shareholders. With these steps, the company could comfortably implement a capital reduction of $1.0 to $1.25 billion, and still have leverage ratios and coverage metrics that would be prudent and manageable.

If the company listens to Axon and successfully executes these strategies, it could mean significant share appreciation in the long-term. Again, the company is trading below enterprise value with strong cash flow and a PEG of right around 1 - well below the industry average. This is definitely a stock to keep an eye on.

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Ampex Corporation (NDAQ:AMPX) shareholders applauded management's move to retain the company's assets after a buyout offer from ValueVest High Concentration Master Fund. We covered this unofficial buyout offer in a previous article on November 14th, where we stated that ValueVest intended to discuss this matter with management at the next annual meeting. The company responded sooner, however, stating that they are not interested in a buyout but are willing to discuss other possible ways to increase shareholder value.

In a 13D/A filing yesterday, ValueVest said:

"On November 14, 2006, the Investment Manager received by facsimile a letter dated November 6, 2006 from the chairman and chief executive officer of the Issuer. The letter confirmed that the Investment Manager's letters of September 13 and 21, 2006 had been discussed by the Issuer's board of directors at their meeting in early November and that the Issuer's board of directors had concluded after that discussion that it would not be in the best interest of the Issuer or its shareholders to offer the Issuer's Data Systems business for sale at this time.

On November 15, 2006 the Investment Manager contacted the Issuer's chief financial officer by telephone and once again offered to meet with representatives of the Issuer to discuss the ways in which the Investment Manager might be able to help increase shareholder value and the commercial utilization of the Issuer's intellectual property assets. The chief financial officer agreed to meet with Messrs. Bakar and Cariani at the Issuer's offices in New York in the next week." (Read More)

The stock is trading up over 2% today on the news. Certainly, any licensing deals involving the company's intellectual property rights could entail further improvement in the company's bottom line. This remains a good stock to watch as the the fund meets with managment in New York next week to discuss possible ways to unlock shareholder value.

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U.S. Steel Corp. (NYSE:X) moved higher today by over 9% after a Bloomberg report said that Russia's biggest steel maker, OAO Severstal, is in talks with investment bankers to merge with local iron miners to create a $20 billion company, all in an effort to bid for the $8 billion U.S. Steel. The two potential local acquisitions are said to include ZAO Gazmetall and ZAO Metalloinves, which are controlled by billionaire Alisher Usmanov. The rumors stemmed from the Russian newspaper Kommersant, which quoted anonymous analysts at investment banks reporting that Severstal owner Alexei Mordashov is interested in buying U.S. Steel. This rumor is also supported by strong existing consolidation within the steel industry - particularly, the Mittal takeover of Arcelor which formed the world's largest steel company earlier this year. Finally, a spokesman for U.S. Steel didn't dismiss the rumor, saying: "We favor consolidation if it builds value for our shareholders, but we don't discuss any actions we may or may not be taking until the appropriate time." The rumor also helped other steel stocks climb sharply in morning trading. Combined, these factors make such an acquisition a possibility; however, there is still a lot of obstacles in the way. Regardless, this is definitely a stock to keep an eye on as the picture clears up in coming months.

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NYMEX Holdings, Inc. (NYSE:NMX) skyrocketed at open today as one of the hottest IPOs this year began trading. The company priced above its already-raised expected range last night at $59 per share, but this proved to be far less than investors were willing to pay as the stock rocketed over 100% in morning trading to over $140 a share. Many investors are driven to buy Nymex after seeing red hot performance and M&A activity amongst other exchanges: The NYSE IPO'd not long ago and performed extremely well; the LSE was the subject of a bidding war; the CME and CBOT were involved in a merger/buyout; and the NASDAQ has been red hot since it went public. Here's a chart showing three of the largest exchanges that have clearly outperformed the market during the past few years:



Investors appear confident that the Nymex will perform similarly, and some are even speculating the Nymex could be the subject of a buyout as consolidation within the industry continues. This stock is definitely one to watch as exchanges continue to outperform the rest of the market.

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Clear Channel Communications, Inc. (NYSE:CCU) announced its acceptance today of a definitive merger agreement with Thomas H. Lee Partners and Bain Capital Partners. The $18.7 billion buyout is to take place at $36.70 per share pending shareholder approval - the company expects the transaction to be completed by the end of 2007. This news comes after the company announced that it had retained advisors to assist it in a possible sale of the company back on October 27th. In another announcement, the company revealed that it intends to sell 448 radio stations outside the top 100 markets, as well as its television division. However, it noted that the merger is not conditioned on the sale of these assets. Why are they doing this? According to the company:

"Our TV division and departing radio stations have consistently turned in industry-leading performance. However, these assets account for less than 10% of the Company’s revenues and earnings. Change is a necessary part of success. We are adapting our business model to accommodate the rapid and substantial changes in the markets in which we operate. These are difficult decisions, but we believe they are the right ones, and necessary for our future success." (Read More)

It also makes the buyout signficantly cheaper for the acquiring private equity firms; in fact, some investors are angered that the company waited until after the merger agreement to reveal this information in detail. If it had been the other way around, any upside from these sales could have benefited shareholders instead of private equity.

The company also addressed rumors regarding layoffs, stating:

"We do not expect this privatization to result in any significant reductions to our core workforce. While future employment is never guaranteed, reductions in force are typically associated with so-called strategic mergers in which two companies and their employees are combined, rather than with transactions that are more properly characterized as financial investments such as this one. The private equity group is making a very large investment in our company, and it is in their best interest for the company to continue having the right people with the right tools to grow and prosper." (Read More)

This buyout is the latest in a series of massive LBO transactions this year by private equity, including that of casino giant Harrahs Entertainment. The deal also affects investment banks, who stand to make more than $130 million on the deal in advising and legal fees. These institutions include Morgan Stanley, Goldman Sachs, and others who have benefited from the near-record $3 trillion in deals this year alone. Clear Channel stock is currently trading at $35.36 per share, roughly 6% below the buyout premium.

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Two of the largest IPOs of the year, KBR (NYSE:KBR) and Hertz (NYSE:HTZ), both opened higher today in an IPO market that has performed extremely well during the past few months. KBR is trading up 23% in afternoon trading, while HTZ is trading up marginally at $15.06 after pricing its IPO at the top of its range. It is worth noting that KBR was a subsidiary of Halliburton, who will retain an 81 - 83% stake in the company, depending on the the underwriters' over-allotment actions. These IPOs come ahead of the much-anticipated Nymex IPO tomorrow, which remains heavily oversubscribed despite a 20% price hike and half million additional shares.