Arm Holdings plc (NDAQ:ARMHY) shares rose $0.37, or 4.32%, to $8.94 today after the company announced that it repurchased a substantial amount of its own stock during the past few days. Shareholders took this as a sign that the company feels its shares are undervalued.

The microprocessor manufacturer announced that it had repurchased 750,000 shares three times during August on the 28th, 29th and 30th. The total number of shares repurchased amounted to 2,250,000 shares at a price of roughly 315,000,000 pence. The new stake amounts to roughly a 10 percent increase in its treasury holdings.

Analysts are also bullish on Arm, which holds a leadership position in the mobile processing market. The company receives royalties on its designs that let it achieve margins of 100% and provide investors with a rapidly expanding stream of profits over the long-term. Meanwhile, the market for the company's products appears to be expanding rapidly at least in the medium term. Combined, these factors make ARMHY a company worth watching!

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Dell Inc. (NDAQ:DELL) posted earnings today showing signs of a successful turnaround after the company exceeded Wall Street estimates. Shareholders have been hoping that Michael Dell's return to the company would spark a turnaround that would help the company exit its current rut and regain its position as one of the top computer makers.

Dell reported a 46 percent jump in profit and a 4.8 percent increase in revenues for the second quarter, beating analyst expectations. Server sales were also up 14 percent along with a 20 percent increase in storage sales. Dell shares added over 2 percent today on the news.

Despite the great earnings, the computer maker still faces a number of hurdles. Analysts are predicting a slower decline in component costs for the second quarter, which could hurt earnings. The company is also continuing its internal investigation into its finances that has left many guessing. And finally, the company has had problems meeting demand for notebooks in certain colors.

In the end, Michael Dell's return to the company seems to be helping. Dell's operating results have definitely improved and the company is making progress towards resolving its other problems. Combined, these factors make DELL a stock worth watching!

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Angelica Corporation (NYSE:AGL) board members and executives may be in trouble soon after a major shareholder said it would nominate its own slate of directors during the company's next annual meeting, according to a Schedule 3D/A filing with the SEC.

Pirate Capital, which owns a 9.8 percent stake in the company, said today that it intends to nominate Thomas R. Hudson Jr. and Christopher Kelly to the board of directors at the company's upcoming 2007 annual meeting. The move follows a long history of trying to force the company to undergo changes that would unlock value for shareholders.

Interestingly, Pirate Capital has began to unwind its position in the company since April of this year. June and July showed sales amounting to 937,257 shares, which is a 15 percent reduction in its stake. Some investors are questioning why the hedge fund would cut its stake ahead of a signature battle to replace directors and implement its plans for the company.

Pirate Capital has a long history on Wall Street as being the premier activist hedge fund. Last year, the hedge fund ran into problems, however, after it reported a steep loss and several of its limited partners pulled their money forcing the fund to sell off many of its stakes at further losses. Now, Pirate appears to be back on track with a new set of activist targets.

Combined, these factors make AGL a stock worth watching!

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A large Sun-Times Media Group (NYSE:SVN) shareholder asked the company to consider a range of strategic alternatives aimed at unlocking value for shareholders, according to a Schedule 13D/A filing with the SEC.

K Capital Partners, which owns a 9.9 percent stake in the company, said the company is trading at a discount to its intrinsic value and demanded that the company take immediate action to unlock shareholder value. The activist hedge fund demanded that:

1. The Company should hire a strategic advisor and put the Company up for sale.

2. Raymond Seitz should step down as Chairman of the Board. While the reporting Persons have great respect for Mr. Seitz as an individual, his personal travel schedule and other interests do not allow him to provide present and active leadership.

3. Gordon Paris should step down as a member of the Board. Mr. Paris was CEO of the Company during its deterioration and during its costly decision to invest in Canadian commercial paper; given these facts, there is no justification for allowing Mr. Paris to remain on the Board.

4. The Company should appoint two institutional shareholders to the Board, so that the Board has greater shareholder representation. The current Board has minimal ownership, as has been evident in its decisions and actions.

5. The Company should execute a share buyback with the remaining unused capacity under the existing buyback program, which the Reporting Persons believe to be in excess of twenty million dollars. The Reporting Persons believe a twenty million dollar buyback is very conservative and prudent given the Company's potential financial liabilities and operational requirements.

Shareholders are hoping that the company will consider these alternatives and take some measures to unlock value for shareholders. Whether or not this will happen depends on the company's response, but this is definitely a stock to watch in the meantime!

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A large PDL Biopharma (NDAQ:PDLI) shareholder demanded that L. Patrick Gage immediately resign as Chairman and as a member of the board and that the company's management and Board focus on a prompt sale of the company, according to a Schedule 13D/A filed with the SEC today.

Daniel Loeb's Third Point LLC, which owns about 9.7 percent of the company, said in a letter to the board that Patrick Gage's comments during his recent conference call sent a "confusing and unwelcome" message about PDL's strategy. Only eight days before the conference call the company announced the board was continuing its strategic review, but during the conference call Mr. Gage seemed to convey that the company could reposition itself to go-it-alone.

"Dr. Gage's destructive, 'go-it-alone' research and development approach combined with his history as Chief Apologist for Mark McDade's failed strategies and his own spotty record as a board member at other companies
lead us to respectively request that Dr. Gage step down as Chairman and a member of the board," said Third Point head Daniel Loeb. "We reiterate the previous offer of Third Point nominees to serve on the board, where they can be expected to work constructively with management, other board members and representatives of Merrill Lynch to bring the strategic review to a successful conclusion of maximizing value for all PDL shareholders."

Many shareholders have already indicated a strong willingness to sell the company and Third Point is continuing its campaign to do just that. Whether or not they will be successful in forcing a sale remains to be seen, but PDLI remains a great stock to watch!

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Medco Health Solutions Inc. (NYSE: MHS) has announced it will buy PolyMedica Corporation (NASDAQ: PLMD) in an all-cash deal worth $1.5 billion.

PolyMedica is a direct supplier of diabetes testing supplies and other diabetes related products that is largely known for its Liberty brand. The purchase price values PolyMedica at $53 per share, a 17% premium over its closing price before the announcement.

Medco is explicitly making a play for the burgeoning diabetes market, as the press release announcing the deal states:

"An estimated 17 million Americans are currently treated for diabetes, with more than 1 million patients diagnosed each year; an additional 7 million are estimated as undiagnosed. Diabetes care represents one of the fastest-growing segments of health care in a market estimated at more than $25 billion a year. These patients represent 5 percent of the population but account for more than 15 percent of total drug spending..."

Medco is a pharmacy benefit manager that mainly provides prescription drug programs, with clients including Blue Cross/Blue Shield. Last year, Medco had net income of more than $600 million on revenue of more than $40 billion. The purchase of PolyMedica is seen positively by analysts as complimenting Medco's existing services, which include giving prescriptions to 2.8 million diabetes patients.

Both Medco shares and PolyMedica shares are trading near all-time highs on news of the deal, but the possible synergies from this purchase still makes MHS a stock worth watching!

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Altria Group, Inc. (NYSE: MO) said in a statement that it plans on to spin-off Philip Morris International, though final approval would depend on a January 30th board meeting as well as a favorable ruling from the IRS on tax consequences of any such move.

The spin-off is a logical, if not necessary, move as it would separate the  fast growing international cigarette division, which accounts for two-thirds of Altria profit, from the declining consumption and legal liability of the U.S. cigarette market.

Altria is currently the world's largest cigarette company but the international division has been a particular bright spot with dominant market share in France, Germany, Italy and Spain. Cigarette sales by volume increased 3.3% last quarter compared to a year ago for the international division, while declining by the same amount for the domestic unit.

Earlier this year, Altria spun-off the world's second biggest food company Kraft Foods, Inc. (NYSE: KFT), though for much different reasons - its shrinking profits were hurting Altria's other divisions.

After the proposed spin-off, current Altria Chairman and CEO Louis Camilleri would assume that position at Philip Morris International while current Philip Morris USA head Michael Symanczyk would become the new Chairman and CEO of Altria.

Regardless if the board approves any proposed spin-off, the fact that the company is recognizing the increasing opportunity in the international cigarette market definitely makes MO a stock worth watching in the coming months!

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Wendy's International (NYSE:WEN) has agreed to let a major shareholders have access to confidential financial information about the third-largest hamburger chain so he can decide whether or not to bid for the company, according to a Schedule 13D/A filing made today with the SEC.

Billionaire investor Nelson Peltz, who owns 9.8 percent of Wendy's, has been lobbying for a sale of the company to his own Triac which owns fast-food chain Arby's. In the past, he has indicated a willingness to pay between $37 and $41 per share in a deal worth $3.2 billion to $3.6 billion.

Wendy's agreed today to provide Peltz and Triarc with critical financial information that will enable them to evaluate a potential bid on the condition that they do not acquire any more shares in the company before December 1, 2007. Shares in the company moved up over 3 percent today on the news.

Shareholders - disappointed with the stalling share price recently - are hoping that the company can reach an agreement to be sold. Whether or not we will see an offer for the company remains to be seen, but this is definitely a stock to watch during the next few months!

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A major Fleetwood Enterprises' (NYSE:FLE) shareholder asked the board to consider selling the company to rival RV and manufactured house maker Champion Enterprises (NYSE:CHB), according to a Schedule 13D/A filing made with the SEC yesterday.

SLS Management, which owns about 11.8 percent of the company, said in a letter to the board that the company has significant intrinsic value and has taken steps to unlock value but has remained unprofitable with a high cost structure.

SLS Managing Member Scott L. Swid argued that the best solution to unlock value would be a tax-free merger with rival Champion Enterprises, which would create $600 million - or about $3/share - in value for shareholders of both companies due to an "ideal overlap" of manufacturing facilities.

"The most uniquely compelling aspect of the combination of Fleetwood and Champion is their ideal overlap of manufacturing facilities," Swid wrote. "We believe the synergies and efficiencies of this combination would result in a combined annual savings of $60 million."

The activist hedge fund believes that the combined company could close 11 plants without exiting any market, which would result in significant cost savings and improved operating efficiency. Whether or not this transaction is consummated remains to be seen, but it is definitely a stock to watch!

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Problems with the mortgage and credit markets may have many individual investors worried but insiders appear confident in a turnaround. During the past eight weeks, insiders have been net sellers of a very low $300 million daily, according to their form 4 filings with the SEC. This number is down from a $470 million per day average since problems arose in July.

So, what stocks are insiders buying the most? The answer: banks and insurance companies. That's right - insiders are buying up the same stock that rest of the market is selling! In fact, not since 1995 have so many chief executives bought so many shares in their own companies as in this month. Many analysts see this as a strong buy signal and a clear indication that they are confident in a turnaround.

Among the biggest buyers were chief executives in companies like Wachovia (NYSE:WB), American Express (NYSE:AXP), CIT Group (NYSE:CIT), and American Capital Strategies (NDAQ:ACAS). Meanwhile, several mutual funds have increased their exposure in these same companies betting alongside insiders that shares will recover from their current extremely discounted levels.

In the end, the best opportunities are always present once blood is on the streets. The public is afraid, hedge funds have sold out, and now insiders are on the move buying up all the cheap shares. Opportunistic investors may now want to do the same while shares are still cheap...

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Tyco Electronics (NYSE:TEL) is finally beginning to catch the attention of value investors after its rough start as a public company. The Tyco spinoff is trading well off of its initial offering price, continues to be valued below its peers, and has only one analyst recommending a buy. So, why is Tyco Electronics a stock worth watching? Let's take a look...

Tyco Electronics shares are currently trading around 10% below its initial offering at around $36.50. The stock is trading at around 16x forward earnings compared to an industry average 21x, which means it is trading at a discount to its peers. This is despite a healthy cash flow with a 6% free cash flow yield. So fundamentally, this company is relatively healthy and trading at a discount to its peers.

Tyco Electronics has also seen some significant insider buying this month. Thomas Lynch purchased almost $680,000 worth of stock on August 13th while two other insiders purchased an addition $110,000 worth of stock shortly afterwards. Meanwhile the company has seen no insider selling, which indicates that insiders are confident in future prospects.

Finally, Tyco Electronics is unique in that it is a spinoff company, which have historically outperformed the overall stock market. A Thompson Financial study of spinoffs dating back to 1996 found that the average spinoff company fell during the first month but recovered to an 8% gain after six months and a 12% gain after twelve months. These returns are far in excess of average stocks!

This tendency is attributed to the fact that parent company shareholders often do not want shares in the new company and sell their shares. This unjustified selling pressure pushes down share prices despite decent fundamentals, which creates buying opportunities in the early months after a spinoff. Tyco Electronics is no different; however, the current market conditions have pushed this move even lower despite decent fundamentals. And this has created a great value play that investors are just now starting to notice!

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H&R Block (NYSE:HRB) shareholders are gearing up for this years September 6th board meeting where they will be faced with a decision whether or not to vote for incumbent board members or a new slate of three directors proposed by ex-SEC head Richard Breeden's hedge fund, Breeden Capital Partners. Shareholders are hoping that these new directors can implement a series of changes designed to jump the company's stagnant share price.

Richard Breeden, who owns a 1.8% stake in the company, has attracted widespread support for his proposal to narrow the company's focus to just tax preparation services by divesting everything else. The company's long history of failed diversification efforts has frustrated many investors and led to a stagnant share price that has many ready for change. Among other things, Breeden demanded that the company shut down its thrift division and focus on selling off its mortgage businesses while focusing on tax preparation services.

Unfortunately, the poor credit markets might prove to be a hurdle for any move to divest. H&R Block's current deal to sell its One Mortgage unit to Cerberus Capital Management was recently delayed until December 31st, which has many worried that the deal will fall through. Meanwhile, many other financial and strategic buyers are finding it very difficult to obtain financing. The company's business units may also prove to be too small for spin-offs onto the public market.

Shareholders and analysts seem unphased, however, after three proxy advisory services recently came out in support of his candidates while other activists holding a cumulative 15% of the outstanding shares are also expected to vote in favor of change. Whether or not Breeden is successful remains to be seen; however, this is definitely a stock to watch given his past success in activist situations!

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Boston Scientific (NYSE:BSX) announced in an 8-K filing with the SEC yesterday that it had refinanced its junk-level debt in a move that could help it emerge from the nearly $9 billion debt hole created by its acquisition of Guidant Corp. last year. Shareholders are hoping that restructuring move could help the company resolve its debt worries and jump its share price.

The company revealed that it used nearly $1 billion of its own cash reserves to pay down debt that was due next Spring. Shareholders expressed concerns in the past that the company may not be able to meet these obligations and now have increased confidence in the company. The S&P said it would review the company's efforts within a month to see if they qualify for a ratings change.

Boston Scientific also announced last year that it would explore a variety of different ways to unlock value for shareholders and pay down its debt, including a sale of one of its business units. One other idea floated was a spin-off of one of the company's businesses, but these ideas were ultimately shot down by management.

In the end, the refinancing should provide the company with greater financial flexibility, but the fact that they had to tap into their line of credit may limit future opportunities. Relief from this debt could finally help the company emerge from its current lull. Combined, these factors make BSX a stock worth watching.

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The Topps Company (NDAQ:TOPP) shares dropped yesterday after Proxy Governance Inc. - a company that advises shareholders - recommended a vote against a proposed $9.75 per share buyout, calling the negotiation flawed. The vote next week is expected to be extremely close as shareholders weigh their options.

The main problem with the process was a $10.75 bid by Upper Deck that was withdrawn earlier this week. The bid led many shareholders to believe that the current $9.75 offer is too low and also prompted many proxy advisory firms to view the process as flawed. In the end, many analysts believe that the offer will be rejected in hopes of a higher offer by Topps or a proxy contest to replace the board and management afterwards.

Several hedge funds have also been pushing the company's shareholders towards replacing the board and management rather than selling out. Chicago-based Dearborn Partners is one such owner that has recommended against the buyout proposal saying that shares could be worth as much as $12 to $18 per share in two years under new management.

In the end, many are expecting the buyout bid to fail and a proxy contest to replace management and the board to ensue. Some even believe that a new board and management may prompt Upper Deck to renew or increase its offer for the company in the near future. Combined, these factors make TOPP a stock worth watching!

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E*Trade (NDAQ:ETFC) and Ameritrade (NDAQ:AMTD) are reportedly mulling a potential merger, according to several industry sources. The Wall Street Journal recently reported that the number 3 and 4 brokerages were discussing a potential union but were not close to a final offer. Many analysts and shareholders are betting that tremendous value could be unlocked through a merger.

The two companies have also found themselves under the fire of activist hedge funds looking to unlock value. Jana Partners and SAC Capital have both been pressuring the companies to pursue strategic alternatives and unlock shareholder value. These cheerleaders could eventually push the two companies towards a merger if they both remain convinced that it is a good idea.

Together the two companies would becoming the largest brokerage in the world with a combined value of $16.5 billion. Interestingly, shares in both companies rose substantially on the news and held their gains through today's trading. Whether or not these rumors turn out to be true remains to be seen, but AMTD and ETFC are definitely stocks to watch!

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Bank of America (NYSE:BAC) shares rose marginally after the company revealed that it had the troubled Countrywide with a $2 billion purchase of convertible non-voting preferred stock. The move helped the largest mortgage company in the United States to clean up its balance sheet while presenting the bank with a great opportunity to profit.

Shares in Countrywide jumped over 20 percent afterhours widening the 17 percent discount at which the preferred stock was issued. The move also underscores the severity of the subprime problem as such a large discount was required for investment. Skies are not yet clear either for Bank of America, which now holds a substantial stake in a company that has had its value roughly cut in half so far this year.

In the end, the move will help the mortgage banker stay alive for another day while presenting a great opportunity for BAC. There is also some speculation that BAC may actually be interested in acquiring the mortgage banker outright; however, that situation may face some heavy regulatory hurdles given BAC's pending $21 billion purchase of ABN Amro. Regardless, BAC is definitely a stock to watch!

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Kintera Inc. (NYSE:KNTA) shares moved down marginally after Coghill Capital Management disclosed a ten percent stake in the company and expressed its support for a change in the role of chief executive officer.

The activist hedge fund said in a letter, "In our view, Harry's track record with respect to managing Kintera has demonstrated an ongoing inability to achieve business goals and objectives resulting in destruction of shareholder value, as well as the squandering of a considerable market opportunity for which Kintera's solution is well suited to take advantage of. Kintera's lack of acquisition integration and cost rationalization have led to massive and ongoing losses necessitating several equity financings that have been significantly dilutive to existing shareholders. Unrealized performance projections and consistent cash burn have caused the investment community to become disenchanted; as evidenced by Kintera's current $1.30 stock price (as of close on February 5, 2007), which is a fraction of the Company?s $7.00 per share IPO price in 2003.

As Harry is both the Chairman and Chief Executive of the Company, we
 are concerned that he has the ability to exert undue influence over strategic and operational decisions without meaningful checks and balances.  Further, as we view a certain level of dialogue between boards of directors and investors to be important and constructive, we are especially concerned with Kintera?s policy of prohibiting independent board member communication with the investment community. In this particular case, we view such communication to be key to catalyzing change and we support Harry's replacement with a professional manager as a necessary step to drive Kintera to sustained profitability."

Clearly, a new chief executive could help turn around the company and prevent any further deterioration in value. A turnaround CEO could even help the company further its objectives and improve its condition. Combined, these factors make KNTA a stock worth watching!

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LSI Corp. (NYSE:LSI) shares rose $0.15, or 2.27%, to $6.77 today after the company announced that it would sell its Mobility Group to Infineon for up to $500 million. The move marks yet another milestone in a restructuring effort that had many shareholders questioning the chief executive. Shareholders now seem ready to embrace the company's turnaround as it narrows its focus going forward.

The sale of LSI's Mobility Group should allow the company to increase its focus on its own businesses - particularly, the integration of integrated storage specialist Agere Systems which it acquired in December for $4 billion. The sale will also save the company about $25 million in expenses next year while infusing it with cash, despite the fact that the transaction went through at only a 1.7x multiple.

Analysts remain divided on the stock with some taking a very bullish stance and others taking a very bearish stance. All seem to agree that the sale of its Mobility Division was a move in the right direction; however, many insist that the company may continue to face troubles with its integration that led to a few missed quarters in the past. Regardless, this is definitely a stock worth watching!

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Nymex Holdings (NYSE:NMX) shares are trading up strongly in early morning hours after the energy futures company admitted to preliminary buyout talks but could not guarantee that the talks would result in a sale of the company. Many shareholders have been anticipating further consolidation and this move by Nymex only confirms the strength of M&A in the exchanges market.

News of the possible buyout came after the company's chairman and chief executive held a meeting with analysts in which they admitted talks were in progress. After the research note was published by analysts, the company quickly confirmed the note with their own statement:

"Since discussions have been preliminary, there can be no assurance that the company will enter into any transaction ... although the chairman indicated his belief that any transaction would have to be at a meaningful premium to the company's current share price."

Rumors have also been circulating that the company could be a target of NYSE-Euronext whose chief executive said not long ago was looking for potential acquisitions to increase its foothold in the futures business. Whether or not this is the bidder remains unclear; however, we definitely know there are potential bidders with deep pockets.

The statement also suggested that the company could benefit from $250 million in cost savings in addition to revenue gains from a European expansion and new product lines. The company is also working internally on methods to cut costs and reduce expenses to increase its earnings per share and jump its stock price.
 Regardless, this is definitely a stock to watching moving forward!

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Vitesse Semiconductor (OTC:VTSS) directors may face some opposition in coming months as Chapman Capital prepares to do battle. The activist hedge fund announced its intentions today to investigate management's backgrounds, affiliations and board qualifications. Shareholders are hoping that this move could forces changes at a company that hasn't held a board meeting in over two years.

Chapman Capital's recent Schedule 13D/A filing is the latest in a long line of letter criticizing the company for unethical - and allegedly illegal - actions on behalf of management and the board. The largest problem is the fact that the company hasn't had a reasonable annual meeting in more than two years. The company applied to the SEC for relief but was turned away, which prompted Chapman to launch a campaign to find evidence of misconduct.

Robert L. Chapman, Jr., Managing Member of Chapman Capital, commented, "Nearly two years has passed since Vitesse's owners have been allowed to attend a shareholders meeting to elect directors. Instead, foisted upon Vitesse's owners are these 're-treaded' substitutes who have been admitted to Vitesse's boardroom without the legitimacy of being vetted, much less elected, by the owners to whom they purport to report. To Chapman Capital, Vitesse's Board and senior management seem quite anxious to perpetuate the absolute veto power that has allowed them to discriminate against director candidates who may 'disrupt' their stock option and cash compensation enriching party, while holding them accountable and potentially opening 'back-dated option closets' concealing a skeleton or two."

An additional very detailed letter outlined the evidence obtained thus far while the hedge fund also provided a hotline through which others in the industry could call in reports. If change is effected, it could mean hefty profits for shareholders benefiting from a turnaround. This makes VTSS a stock worth watching!

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Google Inc. (NDAQ:GOOG) announced a stake in Chinese social networking company Tianya.cn. The size of the transaction and stake were not disclosed, but the move underscores the difficulties that the three Internet giants (Microsoft, Google, and Yahoo) are facing when entering foreign markets - particularly China. Shareholders are hoping that this move will help give Google a foothold it what could become one of the world's largest markets.

Currently, Baidu has an insurmountable lead on Google and the rest of the US search providers when it comes to pure search. The Chinese internet giant has over 57% of the market while Google stands with just 21% as of last year. As a result, it appears that Google and other US companies are targeting other sectors, like social networking, video games, and more.

Just how big is this market? Well, currently there are around 162 million Internet users in China with only about 12% of the population using it. This number is expected to swell to 70% by 2010 where they are expected to surpass the number of US users. Consequently, investors should be watching closely for opportunities to invest in Chinese internet companies that could become buyout targets as well as those like Baidu that have a strangle-hold on the market.

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PDL BioPharma (NDAQ:PDLI) CEO Mark McDade resigned yesterday after a month-long internal investigation into improper personal conduct and breach of fudiciary duty. The investigation was spearheaded by activist investor Daniel Loeb's Third Point who has insisted for months that McDade was behind the company's poor performance. Meanwhile, shareholders clearly applauded the move as shares rose over six percent mid-day.

According to a company press release, "PDL BioPharma, announced that a three month internal investigation of the company's chief executive officer (CEO), Mark McDade, found no credible evidence of improper personal conduct or breach of fudiciary by McDade to corroborate the various allegations investigated. The company also announced that McDade, following the investigation and due to the personal toll created by unsubstantiated rumors and related investigation, he has decided to step down as CEO and a member of the board by the end of 2007."

Loeb's Third Point has been pushing for the executive to leave the company and also proposed a potential sale of the company to unlock value for shareholders. Many shareholders are hoping that now that the executive is out of office, the activist shareholder may have more luck with its goals. If successful, a sale of the company could mean significant returns for shareholders. This makes PDLI a stock worth watching!

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Countrywide Financial (NYSE:CFC) shares moved up in pre-market trading after the company announced that it would be laying off employees in an attempt to weather the current mortgage market troubles. Many expect the layoffs to take place in the Full Spectrum Lending Unit that handles many of the company's subprime mortgages.

The news comes less than two weeks after the company announced that it would be expanding its staff from rival companies who were forced to close down. Now, the company reversed its feelings and has decided to cut costs as much as possible. The result may be a steep decline in earnings that many are expecting. For now, the company is staying alive with $11.4 billion that it was able to borrow in a line of credit from a consortium of 40 banks.

Meanwhile, the lender's market continues to tighten its credit requirements. Many say they are forced to raise interest rates and stop offering certain loans because mortgage investors have lost appetite in their securities, which are now considered risky. This category has grown to include the Alt-A mortgages now, which are between prime and subprime - that is, people that don't document their income and those that are buying investment properties.

Recently, Wells Fargo raised the rates on its Jumbo 30-year fixed loan to 8% from 6.8% just last week. The trend is continuing among countless other lenders that are struggling to provide investors with more secure and higher paying mortgage securities in order to regain liquidity in what has become a risky market. In the end, if these companies can weather the storm, it would pay high returns for investors now willing to take the risk!

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The Nasdaq Stock Market (NDAQ:NDAQ) announced today that it would sell its stake in the London Stock Exchange after its lengthy battle to take over the company. The global stock exchange put its 31% stake in the LSE on the block saying that the stake wasn't fully reflected in its own share price.

The move came as a surprise to many who expected the Nasdaq to make another bid in February after regulations on a renewed bid would expire. However, in the end the company said the stake is not fully appreciated in its share price. The company said it would use the proceeds to pay down debt.

Potential buyers of the $1.55 billion stake include JP Morgan and UBS Investment Bank. Meanwhile, the stock exchange is in the process of acquiring OMX AB in a $3.6 billion deal to expand its global footprint. In the end, Nasdaq will need to acquire at least a few global exchanges in order to remain competitive with the NYSE's new structure.

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CME Group Inc. (CME)
International Securities Exchange (ISE)

Midwest Air Group (AMEX:MEH) shares rose $0.79, or 5.37%, to $15.49 today after the airline finally agreed to be bought out by TPG after long-time rival AirTran (NYSE:AAI) conceded defeat. Shareholders are happy that such a deal was completed amid concerns that AirTran's hostile bid might through the entire deal up in the air. Currently, shares are trading approximately $1.50 below the buyout price.

Midwest agreed to be bought out in a $450 million deal valuing its shares at $17 each to be paid in cash. The company's management originally opposed any kind of a deal, especially one with AirTran; however, after 60% of its shares were tendered in favor of a deal the company decided to explore its options. Midwest's Chairman and CEO called the deal a "milestone" for the company, adding that he was happy the airline could be kept in Wisconsin.

TPG is a veteran airline investor that has had previous stakes in names like Continental Airlines, America West Holding Corp., and Ryanair Holding Corp. The investment group said it plans to provide the company with additional industry experience as well as expand its partnership with Northwest, whose stake is rumored to be around 40%.

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In a largely expected move, exchange holding Borse Dubai offered $4 billion - all cash - for Nordic exchange operator OMX, easily topping Nasdaq Stock Market Inc.'s (NASDAQ: NDAQ) cash and stock offer valued at $3.7 billion.

Though Borse Dubai already has almost a 30% stake in OMX, which operates exchanges in countries such as Sweden and Iceland, some shareholders may resist the deal not because of its value but its origin. A buyout by a Middle Eastern, government controlled holding company may be especially unappealing to the Swedish government which has a 6.6% stake in the company.

Nasdaq CEO Bob Greifeld is allegedly planning to travel to Sweden to meet with management and key shareholder of OMX, and Nasdaq said it remains fully committed to its offer.

Borse Dubai Chairman Essa Kazim had a different message, saying "This combination [of Borse Dubai and OMX] will establish OMX as the [Borse Dubai] group's global platform, building on OMX's leading technology and strong brand to position it to become one of the fastest-growing major exchange networks in the world."

Borse Dubai officials have been in Sweden all this week trying to win over OMX management and shareholders as well.

"We are prepared to give it financially full backing, to grow it and turn it into a truly global exchange," Borse Dubai Chairman Kazim said.

Though there are still many hurdles, the lure of the wealth of oil money behind the phrase "financially full backing" may prove too much for OMX to resist in the long-run, especially if Borse Dubai sweetens its offer.

Despite obviously jeopardizing the Nasdaq-OMX deal, Nasdaq shares are actually up today on continued speculation that there is a possibility of a three-way deal between Nasdaq, OMX, and Borse Dubai. And this makes NDAQ a stock worth watching!

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Late afternoon yesterday, federal judge Paul Friedman rejected the Federal Trade Commission's request to block Whole Foods Market Inc.'s (NASDAQ: WFMI) proposed acquisition of Wild Oats Markets Inc. (NASDAQ: OATS).

The FTC had argued that the half-billion dollar deal would stifle competition in the already niche organic foods sector, but Whole Foods countered that their true competition is now general supermarkets which have increased their organic products offerings.

Chairman and CEO of Whole Foods John Mackey said in a statement, "The District Court's ruling affirms our belief that a merger between Whole Foods and Wild Oats is a winning scenario for all stakeholders. We believe the synergies gained from this combination will create long-term value for customers, vendors and shareholders as well as exciting opportunities for team members."

The FTC can still try to block the deal by seeking a stay from the U.S. Court of Appeals for the District of Columbia Circuit or the district court, though all FTC Competition Director Jeffrey Schmidt would say is "we are reviewing our options."

In the meantime, Wild Oats shares are up nearly 18% to $17.90 and Whole Foods shares are up almost 5% to $43.22.

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Capital Southwest Corporation (NYSE:CSWC) shares moved down marginally after Ned Sherwood disclosed a 6.6 percent stake and expressed his belief that the company is trading well below its intrinsic value and highlighted several concerns it has about the company's strategy and direction. Shareholders are hoping that the investor will help push the company to unlock value and jump its share price.

Mr. Sherwood disclosed a letter to the board of directors indicating his belief that the company's shares are worth between $175 and $200 per share. He believes this discount can be attributed to, among other things, certain policies and practices that the company has used in the past and doesn't intend to change. In his letter, he made several suggestions to unlock value for shareholders.

One the company's policies causing major concern is the fact that unlike most Business Development Companies (BDCs), the company has chosen to retain its realized gains rather than distribute it to shareholders. The company's BDC structure enables it to pass all tax liability to shareholders who would have to pay a 15% tax; however, by retaining all income, the company is forced to pay the 35% corporate tax rate!

Moreover, the company has chosen not to exercise its registration rights on its four most significant holdings in public companies so such shares can be freely traded on the open market. The company's venture capital investments have resulted in significant security holdings that it has refused to sell or exercise in the free market. Clearly, the growth isn't there to justify holding them.

These two policies alone caused a reduction of $100 per share from the company's net asset value, which stands near $233! There are also other problems such as the company's excessive extra cash and credit lines that are being unused. If this were returned to shareholders through a buyback or special dividend, we could see substantial gains in share price. Combined, these factors make CSWC a stock worth watching!

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