In volatile times such as these, it is often best to see what the top hedge funds' latest moves are.

Since hedge funds are only paid if their limited partners make money, funds are constantly scanning the market for what they perceive to be unvalued assets, often in the small- and mid-cap arena. Hedge fund managers who want to get the most out of a stock investment often turn to shareholder activism as a way to increase shareholder value and ultimately boost their returns.

It is certainly worth noting where some of the smartest money is being put to work. Here at Stockpickr.com, we track all some of the latest activist situations for those interested in possibly piggybacking these activist funds.

Shamrock Activist Value Fund , formed by Roy E. Disney, has been very activist as of late. It runs more than $825 million of investment capital in 30 companies and currently has $925 million of committed capital.

Shamrock has increased its position in Arris Group (ARRS) to 5.72% of the company, or 7 million shares, and said that Shamrock management recently met with Arris representatives. According to an SEC filling, the fund and company discussed such things as having a separate CEO and chairman, a majority voting standard and " implementing and disclosing equity ownership requirements for outside directors."

Shamrock is trying to change the current corporate structure inside Arris in hopes of either gaining a seat on the board or luring outside strategic buyers.

Arris, a leading developer, manufacturer and supplier of voice, video and high-speed data solutions to the global broadband industry, has been in business for more than half a century and boosted a strong innovated culture. Arris has more than 155 patents, with another 200 patents pending in the voice, video and high-speed data sector. As of 2008 approximately 30% of Arris' revenue comes from international sales.

As of third-quarter 2008, Arris boosted record revenue, tallying in at $297.6 million, with gross margin at 35.7%. Arris trades with a forward P/E of 8.03, and EV/EBITDA of 5.971.

In other activist news, Moab Partners has been accumulating shares of Biodel (BIOD) since mid-September. Moab, which focuses on deep-value plays, announced that the reason it has been aggressively purchasing shares of Biodel is that “as of November 28th, the market cap was only 71% of its cash and marketable securities balances reported in their 10Q for the period ended June 30th.”

Biodel is a specialty pharmaceutical company that makes therapeutics to address various unmet market needs. The company claims that its three products in the pipeline have the potential to total more than$1 billion dollars. Biodel has a key catalyst, or, as the company calls it, “key value driver,” in the first half of 2009, when it’s Onsolis is up for FDA approval.

Another well-noted small-cap hedge fund, Riley Investment Management, sees substantially value in shares of Magnetek (MAG). On Dec, 3, Riley sent a letter to Magnetek management stating that shareholder value would be best maximized through a sale of the company.

Net sales of Magnetek, a U.S.-based digital power control company, rose from $68 million in 2004 to $100 million in 2008, with firm growth nearly doubling to 14% in 2008. Magnetek has $15 million in cash and trades with a forward P/E of 10.58

Riley Investment Management owns about 9% of Magnetek shares outstanding.

For more activist ideas, including Magellan Health (MGLN), Double-Take Software (DBTK), Zale (ZLC) and JA Solar (JASO), please check out the Latest Activist Situations portfolio and the latest activist filings from Barron’s.

Posted on Dec. 9, 2008