Weekly Market Overview

U.S. stocks took a small break last week and began this one on a mixed note. A series of economic reports came out today suggesting that even though gasoline prices spiked 10% in April, the CPI only rose 0.5%, meaning that inflation is still under control. Economic analysts remain uncertain, however, as to just how long core inflation will remain under control, especially as rents put pressure on the economy. So, what does this mean for U.S. stocks? Well, any rise in inflation will cause prices to be more expensive for consumers. This means that domestic customers will spend less money while foreign importers will likely increase their buying - good news for manufacturers but bad news for domestic retailers.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
   
2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives.
   
3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors!
4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Two weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners.
   
5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
   

Technical Analysis

1. Mobility Electronics (MOBE) - Long-term bullish bottom triangle.
   
2. Darden Restaurants (DRI) - Intermediate-term bullish upside breakout.
   
3. Syntax-Brillian (BRLC) - Intermediate-term bullish symmetrical continuation triangle.
   
4. Centex Corporation (CTX) - Intermediate-term bullish head and shoulders bottom.
   
5. Silver Wheaton (SLW) - Long-term bullish continuation diamond.
   

Stock of the Week: Ceridian Corporation (CEN)

We believe that this Ceridian is a stock worth a second look in today's market. Everyone knows that Pershing Square and Relational Investors are attempting to force Ceridian to spin-off its Comdata unit, which could unlock millions in value. However, the company recently announced that it has hired an investment banker and those close to the situation are saying that these bankers are approaching private equity and corporate buyers who may be interested in acquiring the whole company. Meanwhile, the hedge fund lost its legal battle demanding the disclosure of letters sent to the board from two management personnel that were recently fired. Tempers are also high since the company has yet to set its annual meeting - where Pershing Square will be able to conduct its proxy solicitation to replace the company's board. But when this finally happens, CEN a stock worth watching closely!

Tip of the Week : Leverage Up with LEAPs

LEAPs are Long Term Equity Anticipation Options - or options that have an expiration date set years in the future instead of mere months. Many popular stocks offer these options for long-term shareholders that would either like to leverage up or hedge against their open position. The options themselves can offer investors increased leverage if they are confident in the stock's future - after all, options are cheaper than buying the underlying stock. Alternatively, some investors find it useful to use these options to hedge against other long-term plays - most notably, long-term shorting. Shorting stocks can be risky in the event of a sudden strike of good fortune for the company, so these options can be used to limit the downside for those speculators. Either way, LEAPs are an excellent tool that every investor should check out!

You can find and track these SEC filings on SECFilings.com!

Final Words

Everyone continues to watch the Federal Reserve as it contemplates the inflation and interest rate situation. Clearly, any unexpected changes would make a large impact on several key sectors that have been driving the recent growth. Meanwhile, there seems to be no slowdown in the M&A action that has propelled the markets to new highs in April - so always be on the lookout. Good luck trading!

Weekly Market Overview

U.S. stocks continue to set records as the dow matched its 80-year record for the longest streak. This move was helped by higher M&A action, falling oil prices, and falling yields on long-term treasury bonds. However, many traders and investors will be closely watching the Federal Reserve meeting on interest rates later this week for any signs of weakness. While this is definitely a great market, remember that all good things must come to an end. Given the extreme streak that we are seeing now, this day of reckoning could come soon.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
   
2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors.
3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors!
4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Last week, the company announced that it had received several takeover offers and would review the bids before taking final offers. While we don’t know what these bids are priced at, we do know that they exist.
5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
   

Technical Analysis

1. Mobility Electronics (MOBE) - Long-term bullish bottom triangle.
   
2. Darden Restaurants (DRI) - Intermediate-term bullish upside breakout.
   
3. Syntax-Brillian (BRLC) - Intermediate-term bullish symmetrical continuation triangle.
   
4. Centex Corporation (CTX) - Intermediate-term bullish head and shoulders bottom.
   
5. Silver Wheaton (SLW) - Long-term bullish continuation diamond.
   

Stock of the Week: Wendy's International (WEN)

Applebees is our stock of the week this week since speculation has recently pushed shares higher ahead of what many are hoping is a buyout bid for the company. Billionaire investor Nelson Peltz and famed activist Bill Ackman have both pressured the company to unlock shareholder value through a sale of the company. The board established a committee to evaluate possible strategic alternatives on April 26th and many are hoping that this recent rumor holds true - that a buyer has surfaced! This is definitely one to watch as any buyout would likely come at a substantial premium.

Tip of the Week: Watch the Hedge Funds

Hedge funds are increasingly becoming activist institutions that take action to unlock value in their investments. Investing alongside these funds can yield great results; in fact, there is record of one such tracking fund that returned over 40%! The key to following these activist hedge funds is to track their motivations and plans through their Schedule 13D filings with the SEC. These filings can provide details as to whether or not they plan on pushing for a sale of the company along with indicators as to how receptive management and the board is to their plans.

You can find and track these SEC filings on SECFilings.com!

Final Words

Everyone will be closely watching the Fed's meeting notes later this week to give hints as to just how far the market will go before finally retracing. By focusing on unique situations and sectors, investors can still profit in any market!

Weekly Market Overview

U.S. stocks began the week mixed today as investors sort through a wide range of data showing not only tame inflation but also weak spending, manufacturing and construction data. Some investors are looking for a mild correction after a record run in April finally starts to slow down. Certain sectors are still looking ripe for consolidation, however, including online advertising and derivative exchanges. Investors should carefully watch these two sectors while keeping a close eye on earnings reports, which should give us some hints as to whether a correction is forthcoming.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company’s annual meeting is slated for May 4, 2007. Hopefully, we’ll see some action on the part of the activists then!
2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors.
3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors!
4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Last week, the company announced that it had received several takeover offers and would review the bids before taking final offers. While we don’t know what these bids are priced at, we do know that they exist.
5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
   

Technical Analysis

1. Juniper Networks (JNPR) – Long-term bullish head and shoulders bottom.
2. Foundry Networks (FDRY) – Intermediate-term bullish symmetrical continuation triangle.
3. Patterson-UTI Energy (PTEN) – Intermediate-term bullish megaphone bottom.
4. Sohu.com (SOHU) – Intermediate-term bullish head and shoulders bottom.
5. Edge Petroleum (EPEX) – Intermediate-term bullish head and shoulders bottom.
   

Stock of the Week: Applebees International (APPB)

Applebees is our stock of the week this week since it is somewhat of a sure play. Shortly after activist shareholders demanded that they explore strategic alternatives, they came back with several potential bidders. Not only do we know that these bids will likely come in at a substantial premium, but there is also room for a potential bidding war since we know that there are more than one entities interested. Given the recent strength of the M&A market combined with the help of activist shareholders looking for an exit strategy, APPB is definitely a stock to watch closely over the next month!

Tip of the Week: Watch the Insiders

Insider transactions can provide very unique insight into exactly where the company is headed. After all, the insiders know the company best! The key to effectively deciphering insider transactions is determining which transactions are worth noting. While stock grants, awards, bonuses and options are all reported, only open-market transactions are worth following. This is simply because it involves the insider spending and risking their own hard earned cash. To find these transactions, simply look for transaction code “P” or “S”, which indicate open market buying and selling.

You can find and track these SEC filings on SECFilings.com!

Final Words

The economy remains uncertain as investors watch earnings and economic reports to try and see if a correction is due after April’s impressive run. By focusing on unique situations and sectors, investors can still profit in any market!

Weekly Market Overview
The markets ended mixed today despite Friday's positive employment report that many traders hoped would provide a boost this week. Earnings season officially begins tomrrow as many investors analyze corporate profits despite expectations being below 10% for the first time in 15 quarters. Meanwhile, oil prices started off the week a little rough, falling $2.77 to $61.51 per barrel. While there wasn't any specific news to explain the decline, many believe that it is simply a return to the norm after the UK vs. Iran premiums. Economically, we are also looking at a higher trade deficit for February and a lower University of Michigan consumer sentiment for April as compared to March. Inflation concerns, however, have been relatively stead, remaining at 3%. Combined, this still implies economic uncertainty that will take some time to clear before we establish a clear trend.


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! Meanwhile, those close to the situation say that investment bankers are trying to find buyers for both businesses - a move which is angering the two activist hedge funds. Last week, Ackman sued the company, demanding that they release letters between Board Directors that they believe contains evidence supporting their thesis that the company has been having problems. (More CEN articles...)
   
3. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
4. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
5. Brinks Company (BCO) - Both MMI Investments and Pirate Capital have sizable stakes in this company. The two hedge funds are seeking to breakup the company in either a change-of-control transaction (outright sale) or through a recently proposed spin-off, which would break the company into two pieces worth approximately $1.15 billion a piece. The two agree that the intrinsic value of the shares stands approximately 25% higher than current levels. (More BCO articles...)
   

Technical Analysis
Our top four stocks to watch for technical analysts are:

1. Finisar Corp (FNSR) - Intermediate-term bullish double bottom.
   
2. DirectTV Group Inc. (DTV) - Intermediate-term bullish symmetrical continuation triangle.
   
3. Janus Capital Group Inc. (JNS) - Intermediate-term bullish upside breakout.
   
4. Axcelis Technologies Inc. (ACLS) - Long-term bullish upside breakout.
   
5. Safeguard Scientifics Inc. (SFE) - Intermediate-term bullish continuation diamond.
   

Stock of the Week : Pioneer Natural Resources (PXD)
Pioneer Natural Resources (NYSE:PXD) jumped nearly 10% on Wednesday amid speculation that the company will spin off some of its assets in an effort to boost their stock price. The rumors took off after the company announced that it would consider creating a Master Limited Partnership - or MLP - for some of its exploration and production assets. Many analysts believe that a spin off has the potential to unlock significant value and raised their price targets for the company. Spin offs not only provide the parent company with excess cash, but the new entity also provides a great opportunity as spin offs generally outperform the overall market during their first year. The excess cash at the parent company can then be used for share buybacks, special dividends, or other methods to unlock shareholder value. While no definitive announcement has been made, this is definitely a stock worth watching as any spin off could mean significant share appreciation for PXD shareholders!

Read More on SECInvestor.com…


Filing of the Week : Schedule 14A
Schedule 14A tells you that the company is filing proxy materials. Normally, this occurs when the company is about to hold its annual meeting, so these filings can be somewhat standard and boring. For example, the company may recommend that you vote your proxy votes on the re-election of the incumbant board members. However, in activist investor situations, Schedule 14/A's (or their derivatives) may be filed to show shareholder proposals, such as the nomination of a new slate of directors or removal of a poison pill. Occasionally, these filings can contain fights between the company and the hedge fund, as the company is allowed to write letters to their shareholders explaining their position and reasoning behind their recommendations in the 14A's. Overall, while most of these filings are routine and relatively uninteresting, every once in awhile there is one that may be of interest to those looking at activist investing situations!

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Peek into Hedge Fund Portfolios
Hedge funds are required to report their annual holdings in a Schedule 13F filing with the SEC. These filings give detailed insight into what companies the hedge fund is holding and how much they have at stake in each. It can be an important clue into which companies may be targetted next for buyouts, mergers, spin-offs, or other strategic transactions that can generate value for shareholders. Overall, these are filings that are definitely worth keeping an eye on!


Final Words
The economy is still uncertain as many investors look towards tomorrow's earnings for more clues as to its direction. Regardless, there are certainly many opportunities out there to profit for investors willing to dig a little deeper to find hidden value. Good luck trading!

Weekly Market Overview
The markets rose slightly today fueled by renewed by yet another merger Monday. Tribune agreed to be sold to real estate mogul Sam Zell, KKR agreed to buy payment process First Data, and Xerox agreed to acquire Global Imaging in three mega transactions. Meanwhile, investors are hoping that the second quarter will bring less volatility and more certainty than has been seen during the first quarter of the year. There are still housing troubles as New Century Financial officially went into bankruptcy today; however, many are predicting that the boarder market will rise more than 9% by the end of the year. Other looming hazards in the economy include slowing corporate earnings growth and a rise in energy prices on account of Iran and further conflicts in the Middle East. Albiet choppy, there are still plenty of opportunities for investors to get involved in the markets!


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! Meanwhile, those close to the situation say that investment bankers are trying to find buyers for both businesses - a move which is angering the two activist hedge funds. Last week, Ackman sued the company, demanding that they release letters between Board Directors that they believe contains evidence supporting their thesis that the company has been having problems. (More CEN articles...)
   
3. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
4. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
5. Brinks Company (BCO) - Both MMI Investments and Pirate Capital have sizable stakes in this company. The two hedge funds are seeking to breakup the company in either a change-of-control transaction (outright sale) or through a recently proposed spin-off, which would break the company into two pieces worth approximately $1.15 billion a piece. The two agree that the intrinsic value of the shares stands approximately 25% higher than current levels. (More BCO articles...)
   

Technical Analysis
Our top four stocks to watch for technical analysts are:

1. PMC Sierra Inc. (PMCS) - Intermediate-term bullish diamond bottom.
   
2. Checkpoint Systems Inc. (CKP) - Long-term bullish continuation diamond.
   
3. Magma Design Automation Inc. (LAVA) - Long-term bullish continuation diamond.
   
4. Enzon Pharmaceuticals (ENZN) - Intermediate-term bullish continuation triangle.
   
5. Borland Software Corp. (BORL) - Intermediate-term bullish diamond bottom.
   

Stock of the Week : Brinks Company (BCO)
Renewed attention on Brink's by two large activist hedge funds have caused us to take a second look at this target company. We know that Brink's currently represents Pirate Capital's largest holding, worth over $260 million. Moreover, we know that BCO is also owned by MMI Investments. Combined, these two shareholders have been pressuring the company for some time now to take action and unlock value for shareholders through (1) a sale of the company, (2) a spin-off, or (3) a leveraged recapitalization of the company. MMI's recent 13D filing may soon be followed by Pirate Capital as both hedge funds are under increasing time constraints to unlock value for their own limited partners. These factors make BCO this weeks stock to watch!

Read More on SECInvestor.com…


Filing of the Week : Form 10-K
Most investors look to 10-K filings when looking for information about a company. These filings are classified as "Annual Report" filings that encompass a company's yearly financials and relevent information. They contain an overview of the company, how they did last year, a detailed overview of their financials, and management discussion and analysis. Newer 10-Ks may also contain executive compensation discussion and analysis. These filings are required reading before investing in any company!

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Peek into Hedge Fund Portfolios
Hedge funds are required to report their annual holdings in a Schedule 13F filing with the SEC. These filings give detailed insight into what companies the hedge fund is holding and how much they have at stake in each. It can be an important clue into which companies may be targetted next for buyouts, mergers, spin-offs, or other strategic transactions that can generate value for shareholders. Overall, these are filings that are definitely worth keeping an eye on!


Final Words
The economy is still uncertain as many investors look towards second quarter results for more clues as to its direction. Regardless, there are certainly many opportunities out there to profit for investors willing to dig a little deeper to find hidden value. Good luck trading!

Weekly Market Overview
The week began with a bust today after the Dow dropped 100 points when news that sales of new homes unexpectedly fell to a 7-year low in February. This sparked concerns that the poorly performing housing market might derail economic growth. The housing market was so far off of forecasts that even with the bad weather, it caused enormous concern. The market recovered, however, as the technology sector moved higher. The week will likely remain just as mixed as the economy's health remains uncertain.


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Temple Inland Inc. (TIN) - The company announced last week that it would be following Carl Icahn's advice and breaking up the company. Shares spiked over 14% on the news, up almost 30% since we first began coverage! We believe that the value unlocked in these transactions will exceed the premium seen today; however, it may take awhile for these actions to materialize.
   
3. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! Meanwhile, those close to the situation say that investment bankers are trying to find buyers for both businesses - a move which is angering the two activist hedge funds. Last week, Ackman sued the company, demanding that they release letters between Board Directors that they believe contains evidence supporting their thesis that the company has been having problems. (More CEN articles...)
   
4. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
5. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
   

Technical Analysis
Our top four stocks to watch for technical analysts are:

1. Conocophilips (COP) - Intermediate-term bullish head and shoulders bottom.
   
2. Coldwater Creek Inc. (CWTR) - Intermediate-term bullish megaphone bottom.
   
3. Cubist Pharmaceuticals (CBST) - Long-term bullish head and shoulders bottom.
   
4. Hancock Fabrics Inc. (HK) - Long-term bullish double bottom.
   
5. Sonic Foundry Inc. (SOFO) - Intermediate-term bullish symmetrical continuation triangle.
   

Stock of the Week : Discover Financial Services (DFS)
Morgan Stanley recently offered additional details on its pending spin-off of Discover Financial Services - owner of the Discover credit card business. the company is a leading credit card issuer and electronic payment services company with one of the most recognized brands in the U.S. financial services. Since its inception in 1986, the company has grown to become one of the largest card issuers in the United States, with more than 50 million cardmembers and $45.7 billion in managed receivables as of November 30, 2006. They are also a leader in payment processing, as they are only one of two credit card issuers with its own U.S. payments network and the only issuer whose wholly-owned network operations include both credit and debit functionality. In 2006, the company processed mroe than 3 billion transactions through their own network and the PULSE network. Overall, Discover's revenues (net interest income plus other income) have increased over the last three years, from $4.5 billion in 2004 to $5.1 billion in 2006, making them a substantial player in their market. This is definitely an "IPO" worth putting on the calendar - due to take place in the third quarter!

Read More on SECInvestor.com…


Filing of the Week : Form 10-K
Most investors look to 10-K filings when looking for information about a company. These filings are classified as "Annual Report" filings that encompass a company's yearly financials and relevent information. They contain an overview of the company, how they did last year, a detailed overview of their financials, and management discussion and analysis. Newer 10-Ks may also contain executive compensation discussion and analysis. These filings are required reading before investing in any company!

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Peek into Hedge Fund Portfolios
Hedge funds are required to report their annual holdings in a Schedule 13F filing with the SEC. These filings give detailed insight into what companies the hedge fund is holding and how much they have at stake in each. It can be an important clue into which companies may be targetted next for buyouts, mergers, spin-offs, or other strategic transactions that can generate value for shareholders. Overall, these are filings that are definitely worth keeping an eye on!


Final Words
The economy seems to be turning to the upside lately with little volatility compared to last week. Good luck trading!

Weekly Market Overview
The week is again full of news as private equity, executive compensation, and the mortgage crisis top the headlines. First, in the private equity world, Blackstone said that it would be the second private equity/hedge fund to go public. The move sparked much speculation that Carlyle and a number of other private equity giants would follow in what would be a new trend allowing the average investor to capitalize on the large profits reaped by these companies.

Executive compensation also topped the headlines as the SEC's new executive compensation disclosures rules have begun to go into effect. Not suprisingly, this has caused a few problems as investors are beginning to realize just how complex executive compensation really is to analyze. Instead of making things easier, many investors insist that things like negative income being reported (a result of the way stock options are valued) have investors even more confused than they were before. Meanwhile, those on the Hill are trying to get additional rights in place for investors to have a non-binding proxy vote on executive compensation on a regular basis. More on these stories over at ExecutiveInvestigator.com.

Finally, some are saying that the mortgage market is beginning to rebound after a brief hit on the economy. New Home Builders Confidence numbers, however, slipped for the first time in six months reflecting continuing concern about worsening credit in the subprime motrgage market. Fortunately, many are saying that the spillover into the regular mortgage markets is not likely to be as significant as first thought. However, this is still a story to keep an eye on.


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Temple Inland Inc. (TIN) - The company announced last week that it would be following Carl Icahn's advice and breaking up the company. Shares spiked over 14% on the news, up almost 30% since we first began coverage! We believe that the value unlocked in these transactions will exceed the premium seen today; however, it may take awhile for these actions to materialize.
   
3. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! Meanwhile, those close to the situation say that investment bankers are trying to find buyers for both businesses - a move which is angering the two activist hedge funds. Last week, Ackman sued the company, demanding that they release letters between Board Directors that they believe contains evidence supporting their thesis that the company has been having problems. (More CEN articles...)
   
4. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
5. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
   

Technical Analysis
Our top four stocks to watch for technical analysts are:

1. Helix Energy Solutions Group (HLX) - Intermediate-term bullish bottom triangle.
2. Hoku Scientific (HOKU) - Intermediate-term bullish continuation wedge.
3. Freeport-McMoRan Copper and Gold (FCX) - Long-term bullish continuation diamond.
4. PMC-Sierra (PMCS) - Intermediate-term bullish diamond bottom.

Stock of the Week : Take-Two Interactive Software (TTWO)
This stock first caught our interest earlier this month when several investors collectively holding 46% of the company's outstanding shares reached an agreement with the company to vote in a new slate of six directors. The investment group consists primarily of OppenheimerFunds, SAC, Tudor Investment, DE Shaw Valence and ZelnickMedia. The new nominees for the Board of Directors include former BMG Entertainment CEO Strauss Zelnick, former News Corp executive Benjamin Feder, Jon Moses, Michael Dornemann and Michael Sheresky. Many analysts and investors are predicting that the proposed management change would have a positive impact on the company, after it suffered losses for the past four quarters. But in a new twist to the story yesterday, the company announced that it would delay its annual meeting in order to evaluate the hedge funds' proposals as well as its own strategic alternatives, including a possible sale of the company.

Read More on SECInvestor.com…


Filing of the Week : Form 10-K
Most investors look to 10-K filings when looking for information about a company. These filings are classified as "Annual Report" filings that encompass a company's yearly financials and relevent information. They contain an overview of the company, how they did last year, a detailed overview of their financials, and management discussion and analysis. Newer 10-Ks may also contain executive compensation discussion and analysis. These filings are required reading before investing in any company!

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Peek into Hedge Fund Portfolios
Hedge funds are required to report their annual holdings in a Schedule 13F filing with the SEC. These filings give detailed insight into what companies the hedge fund is holding and how much they have at stake in each. It can be an important clue into which companies may be targetted next for buyouts, mergers, spin-offs, or other strategic transactions that can generate value for shareholders. Overall, these are filings that are definitely worth keeping an eye on!


Final Words
The economy seems to be turning to the upside lately with little volatility compared to last week. Good luck trading!

Weekly Market Overview
There are several big happening recently that investors should be watching closely. The first is obviously the mortgage crisis that is only growing worse, now that New Century Financial was denied credit to continue its operations. Many other subprime lenders also warned that their earnings may be in danger due to an increasing amount of defaults. In the end, it is likely that this sweep will cause stricter regulations on a mortgage market that has grown increasingly loose in terms of lending standards during the past decade. Opportunities here lie in playing the subprime mortgage weaknesses and any possible larger restrictions on lending standards.

The second big thing to watch is China, which recently reported a trade surplus that nearly tied the record at $23.76 billion. Many predict that this large surplus will further push US lawmakers to encourage China to force its currency to a more appropriate level or face massive export taxes. This could affect many Chinese companies that are now enjoying what some consider unfair trading advantages over US firms. Opportunities here lie in locating Chinese firms that could be hurt by new legislation as well as US firms that could benefit.

Finally, the hedge fund industry is beginning to fear new regulations from Washington after similar actions were taken overseas. Among the proposed changes is a clause that would tax private equity firm fees at the standard rate instead of at the capital gains rate - a difference of almost 20%! Any actions against private equity and hedge funds could cause a slowdown in the amount of deals that we have been seeing recently. The groups are only now beginning to organize in Washington to lobby on their own behalf - we have yet to see how this will turn out.


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Temple Inland Inc. (TIN) - The company announced today that it would be following Carl Icahn's advice and breaking up the company. Shares spiked over 14% on the news, up almost 30% since we first began coverage! We believe that the value unlocked in these transactions will exceed the premium seen today; however, it may take awhile for these actions to materialize.
   
3. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! Meanwhile, those close to the situation say that investment bankers are trying to find buyers for both businesses - a move which is angering the two activist hedge funds. Last week, Ackman sued the company, demanding that they release letters between Board Directors that they believe contains evidence supporting their thesis that the company has been having problems. (More CEN articles...)
   
4. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
5. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
   

Technical Analysis
Our top five stocks to watch for technical analysts are:

1. Grant Prideco Inc. (GRP) - Intermediate term ascending continuation triangle.
   
2. Lam Research (LRCX) - Intermediate term continuation wedge.
   
3. Canadian National Resources Inc. (CNQ) - Long-term continuation diamond.
   
4. Verasun Energy Corp (VSE) - Intermediate term head and shoulders bottom.
   
5. Leucadia National Corp (LUK) - Long-term head and shoulders bottom.
   

Stock of the Week : Ceridian Corporation (CEN)
We believe that this Ceridian is a stock worth a second look in today's market. Everyone knows that Pershing Square and Relational Investors are attempting to force Ceridian to spin-off its Comdata unit, which could unlock millions in value. However, the company recently announced that it has hired an investment banker and those close to the situation are saying that these bankers are approaching private equity and corporate buyers who may be interested in acquiring the whole company. Late last week, the hedge fund also revealed that it was being sued by Ackman, who demanded that it turn over letters that may help prove its case to shareholders in the event of a proxy fight. This is a win-win situation for investors, who stand to gain from a buyout premium and/or a Comdata spin-off! This makes CEN a stock worth watching closely over the next few weeks!

Read More on SECInvestor.com…


Filing of the Week : Form 10-K
Most investors look to 10-K filings when looking for information about a company. These filings are classified as "Annual Report" filings that encompass a company's yearly financials and relevent information. They contain an overview of the company, how they did last year, a detailed overview of their financials, and management discussion and analysis. Newer 10-Ks may also contain executive compensation discussion and analysis. These filings are required reading before investing in any company!

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Leverage Up with LEAPs
LEAPs are Long Term Equity Anticipation Options - or options that have an expiration date set years in the future instead of mere months. Many popular stocks offer these options for long-term shareholders that would either like to leverage up or hedge against their open position. The options themselves can offer investors increased leverage if they are confident in the stock's future - after all, options are cheaper than buying the underlying stock. Alternatively, some investors find it useful to use these options to hedge against other long-term plays - most notably, long-term shorting. Shorting stocks can be risky in the event of a sudden strike of good fortune for the company, so these options can be used to limit the downside for those speculators. Either way, LEAPs are an excellent tool that every investor should check out!


Final Words
The economy seems to be turning to the upside lately with little volatility compared to last week. Despite this bullish mood, however, it is important to remember the many fundamental factors that stack against the economy - most notably the mortgage crisis and China trade issues. Good luck trading!