NEW YORK ( TheStreet) -- Prominent activist investors are making noise again. It might be worth following them in their latest investments.

Activist investors, who take stakes in companies and shake up management or change strategies to wring out investment gains, have been busy doing their homework on undervalued stocks. With keen eyes for companies with turnaround potential, Carl Icahn and Daniel Loeb have found the latest targets. On the other hand, David Einhorn knows when to take the other side of the bet on an overvalued stock and has made a short position in his latest victim.

This flurry of activity could be a sign for a new investment opportunities. Given the solid track records of these famous investors for getting the value that they want out of a company, it's worth taking a look at these stocks.
Carl Icahn

This Coffee Brewer's Days May Be Numbered

In mid-October, Greenlight Capital's Einhorn presented his latest short idea at an investor conference. The play was to short shares -- or to bet on a decline -- in Green Mountain Coffee Roasters ( GMCR), which has more than doubled in the past year.

Einhorn is most famously known for his short position in Lehman Brothers prior to the collapse of the investment bank. In his presentation on Green Mountain, he brought into question the company's accounting practices, its relationship with key vendors and the imminent expiration of the K-cup patent, a product used in its single-serve coffee machines.

Green Mountain is scheduled to release fourth-quarter earnings after the market close today. The eloquent and locquacious hedge fund manager surely will be listening closely for answers to his concerns. Since Einhorn announced his short position, the stock has declined 24%.

WebMD -- Is This Patient Healthy?

Icahn recently increased his stake in online health-information provider WebMD ( WBMD) to 9.5% from an initial stake of 7.9% in October.

Icahn, known for pushing change at companies through management shakeups, strategy switches or outright sales of businesses, identified WebMD as an undervalued stock from a long-term perspective. His initial filing noted that he "may seek to have conversations from time to time with management."

A shareholder-rights plan was adopted by the company shortly after Icahn's initial investment was made, discouraging investors from acquiring more than 12% of the shares outstanding.

The stock got hit hard in July, when the company sharply cut its full-year earnings guidance on lower license revenue and marketing spending by consumer-products companies. Since reaching its 52-week high in May, the stock has declined 47%. While the near-term revenue prospects for WebMD are lackluster, the company's longer-term plan is viable. The backing of Icahn is proof that he believes in the story. How he unlocks the value in this one is still to be determined.

Brocade Communications Back on the Block

Elliott Associates increased its stake in Brocade Communications ( BRCD), a networking-services provider, to 9.8% last week. Elliott, known for pushing changes at Iron Mountain ( IRM) and forcing Novell to put itself up for sale, has now changed its status to become an active investor in Brocade. That opens the door for Elliott to meet with management, discuss strategy and present ideas that might enhance shareholder value.

The change of status comes a week after The Wall Street Journal reported that the company was again looking for a suitor. Qatalyst Partners was hired in 2009 to sell the company, but the process wasn't a success. The boutique investment bank is said to be again actively looking for a new buyer.

Notably, Elliott began investing in the company prior to Aug. 5, when Brocade lowered guidance for third-quarter earnings, and the stock fell 28% to $3.52. Before August, the shares traded in the $5 to $7 range, making Elliott's initial 8.5% ownership cost well above the current stock price of $4.69.

Yahoo Needs New Leadership

On Friday, Third Point's Loeb wrote a letter to Yahoo's ( YHOO) Board of Directors, making clear his discontent with a potential sale of Yahoo to a private-equity firm. In the letter, Third Point requested two Board seats -- those of co-founder Jerry Yang and Chairman Roy Bostock.

Third Point invested in Yahoo in early September with an initial investment of just over 5%. At that time, Loeb said the company was severely undervalued due to actions taken by the Board of Directors and company leadership.

Loeb believes Yahoo has a hidden value that a deal or strategy change overseen by the current board won't be able to unlock. He is dead-set on making money on Yahoo and won't stop until he gets it. This battle is far from over.

-- Written by Lindsey Bell from New York.

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