You probably think mutual funds are the least likely activist investors. While that was true in the past, the tides appear to be changing. T. Rowe Price just did something it's only done once before in its 70-year history - filed as an activist investor in order to fight the management buyout of Laureate Education, according to the Wall Street Journal.

T. Rowe Price mutual fund manager, Brian Berghuis, ran the numbers and determined that the private deal valued at $3.8 billion for this operator of universities could be valued about 80% higher. Why did he care? T. Rowe Price mutual funds shareholders could be losing as much as $210 million according the the Journal.

Management buyouts tend to work differently than the more traditional outsider takeovers. Managers want to keep the price as low as possible in these deals, while they look for the highest price possible for an outsider takeover.

Fidelity Investments took a similar stance against a deal for a private-equity buyout of OSI Restaurant Partners earlier this year. OSI manages the Outback Steakhouse chain. Fidelity's stance worked and the offer had to be increased before shareholders would approve it.

It's about time that mutual funds take activist stands to protect their shareholders. Mutual fund assets totaled $11.496 trillion in August, according to the Investment Company Institute. As managers of their investors' money, mutual funds have an obligation to make sure people who hold mutual funds get the best bang for their buck. There's power in numbers and if the mutual fund companies became more active in protecting the rights of their shareholders, both stocks and mutual funds shareholders would benefit.

Lita Epstein is the author of more than 20 books including the "Pocket idiot's Guide to Investing in Mutual Funds."

Heading to Memorial Day, there's certainly no moratorium on the number of talked about potential deals. Receiving a fair amount of attention over the last few days include the companies below. There's more, of course, but hey, it's a three-day weekend.

LAM RESEARCH CORPORATION (NASDAQ: LRCX)

This supplier of tools that makes microchips keeps seeing its stock move up. Up about 13% over the last few months. And it may be more than speculation that it will soon be acquired. Investors looking for a deal are snapping up equity calls, some are then selling them, and keeping both eyes on the stock price. Others are looking out to see which private equity firms or "strategic" buyers come calling.

AMDOCS LIMITED (NYSE: DOX)

As Alltel Corporation (NYSE: AT) goes, so goes Amdocs? Well, not quite. Yes the Alltel sale has pushed Amdocs' stock upward. Some say this maker of software products for telecom services firms may want to continue to go forward by themselves. But that hasn't stopped that list of potential buyers from being passed around. Best bet: International Business Machines Corporation (NYSE: IBM).

CIRCUIT CITY STORES (NYSE: CC)

Again, here we go: Is it going to take a buyout? (Read: private equity buyer.) Or a miracle? (Read: new management) There are profit warnings. (Read: red flags everywhere) The stock is in miserable shape. (Read: cheap) Tough competition. (Read: Wal-Mart Stores Inc (NYSE: WMT)). Think there's a book to be written about all of this? (Read: who'd want to?).

APPLEBEE'S INTERNATIONAL INC (NASDAQ: APPB)

Food for thought. Kangaroo Holdings wants to buy OSI Restaurant Partners Inc (NYSE: OSI). Not surprisingly, Applebee's stock goes up. Are they cooking up a sale price for themselves as they "evaluate" offers? You betcha.

PALM INC (NASDAQ: PALM)

Going, going...almost gone. Even we're beginning to tire of this one. But it never gets old if you like to watch. Now, they're canceling conferences. The CEO is selling shares. The CFO has a bad back. Come on! The latest product review - Palm Treo 755p - is terrible. Market share is going down the tubes. R&D? Forgetaboutit. Sound like a company on the go? Right. Right into someone else's lap. And to think what they once were. Great job all around, everybody.

MOST NOTEWORTHY: OSI Restaurant Partners (OSI), D.R. Horton (DHI) and Microsoft (MSFT) top today's list of downgrades.

• OSI Restaurant Partners, Inc. (NYSE:OSI) was downgraded to Sell from Neutral at Oppenheimer.
• The firm believes the $40 bid is fair and the risk/reward of waiting for a deal outweighs the potential modest increases of other bids. D.R. Horton, Inc. (NYSE:DHI) was downgraded to Sell from Buy at Merrill Lynch. They expect 2007's outlook to be a negative catalyst for the homebuilder.
• Bank of America resumed coverage of Microsoft Corp. (NASDAQ:MSFT) with a Neutral, below their previous rating of Buy. They believe Microsoft's core earnings drivers are not all Vista-related and that given the company's valuation, sees few near-term catalysts to drive shares higher.

OTHER DOWNGRADES:

• C.E. Unterberg downgraded Netease.com, Inc. (NASDAQ:NTES) to Market Perform from Buy, citing a lack of near-term growth drivers after reporting weak Q3 results.
• Himax Technologies, Inc. (NASDAQ:HIMX) was downgraded to Sell from Buy at Merrill Lynch also following the company's Q3 results.
• Tribune Company (NYSE:TRB) was downgraded at A.G. Edwards to Hold from Buy. The firm said shares are trading based on a sale of the company. They believe downside risk is valued at $26-$29 with no sale and upside as much as $40 a share if the company was sold.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).