Only a year ago, the belief was that the private equity world was doomed. But as is common in the financial markets, this was big exaggeration. If anything, private equity firms have shown that they can adapt quite well.

Just look at KKR (KKR). In its latest quarter, the company posted a profit of $180.6 million or $0.86 per share. The consensus estimate was for $0.42 per share.

But private equity firms like to point to another metric: economic net income, which focuses on fees and gains from investments. This came to $714.6 million in the quarter. Yes, the private equity game can be wildly profitable.

Betting on the outcome of a buyout is no easy feat. Will there be a heated auction? Or will the bidders have doubts and want price concessions?

The result is often much volatility. Just look at Beckman Coulter (BEC), a top medical diagnostic instruments company. In early December, the company put itself up for sale and the stock price surged to $72. Since then, the shares have traded in band of $71 to $75.

For private equity firms, there was much anticipation of the Nielsen (NLSN) IPO. These funds spent huge amounts from 2002 to 2007 on buyouts and they want to get some liquidity, as well as pay down debt.

Well, based on today's trading, private equity firms should definitely be optimistic. Nielsen priced its IPO at $23, which was above its $20 to $22 price range (raising about $1.9 billion). The stock is now up to $25. In fact, this is the biggest private-equity IPO since 2006.

Since early September, shares of the major private equity firms Blackstone Group (BX) and KKR & Co. (KKR) have seen strong gains. Of course, part of the reason has been the bull move. But at the same time, the prospects for private equity are looking brighter. In fact, the upcoming year is shaping up to be strong for public offerings.

According to a report from Bloomberg.com, it looks like private-equity backed deals will account for roughly half the volume. And they will generally be massive transactions. Some that are on deck include HCA Holdings, Nielsen Holdings and Kinder Morgan.

Beckman Coulter (BEC), a top medical diagnostic instruments company, has been public over 20 years. But it looks like its days of independence may soon be over. According to a report in the Wall Street Journal, Beckman is in the process of selling itself. So far in today's trading, the shares are up 27% to $72.57, with the market cap at about $5 billion.

Beckman's products span many categories like biomedical testing and lab automation. The installed base is roughly 200,000. In fact, a large portion of the revenues come from recurring sources (such as refilling supplies for the machines). In other words, Beckman has sturdy cash flow stream.

Aéropostale (ARO - option chain) shares are soaring today on rumors that the company could go private in a deal with a private equity company worth $40 per share. ARO has not commented on the rumor. Even if ARO executives do not want to sell, this kind of interest could establish a floor for the stock price. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ARO.

ARO opened this morning at $24.62. So far today the stock has hit a low of $23.98 and a high of $25.00. As of 12:25, ARO is trading at $24.61 up 0.95 (4.0%). The chart for ARO looks bearish and S&P gives ARO a negative 2 STARS (out of 5) sell ranking.

Segate Technology (STX - option chain) stock is trading lower today after the company announced this morning it has cut off talks with private-equity firms about taking the company private, saying the potential suitors did not value the company highly enough. STX also announced it has added $2 billion to its stock buyback plan. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on STX.

This morning, STX opened at $13.26. So far today the stock has hit a high of $13.50 and a low of $13.15. As of 12:05, STX is trading at $13.47, down $0.39 (-2.8%). The chart for STX looks bearish and S&P gives STX a negative 2 STARS (out of 5) sell ranking.

J. Crew Group (JCG) was nearly 17% higher Tuesday morning thanks to rumors of a potential buyout.

The Wall Street Journal (subscription required) reported that a pair of private equity firms are closing in on a deal to purchase J. Crew for $43.50 per share cash, or $3 billion. One of the potential new owners is TPG Capital, a former owner of the company. TPG would hold a 75% stake in the company, with LA-based Leonard Green & Partners owning the remaining 25%. TPG previously owned an 88% stake in JCG in 1997.

Early Monday morning, trading was halted on Gymboree (GYMB) after an announcement that Bain Capital Partners would acquire the children's clothing company. Reportedly, the definitive agreement calls for Bain to pay $65.40 per share for Gymboree, or $1.8 billion.

According to the terms of the agreement, Gymboree stockholders will receive $65.40 cash for each outstanding share of Gymboree common stock owned. This price is a 57.4% premium to Gymboree's share price on September 30, 2010 -- the date that takeover rumors began. And the $65.40 is a 23.5% premium over Friday's closing price of $52.95.

ResCare (RSCR), which provides health services to the disabled, are up about 6% on Tuesday morning trading thanks to a sweetened buyout deal. The company got a $370 million buyout offer in mid August by Canadian private equity firm, Onex Corp.

After some negotiation, the parties came to an agreement this week; that is, a deal that is $14 million higher.

Back in 2002, Burger King (BKC) went private in a $1.5 billion deal (at the time, the food chain was owned by Diageo PLC). Then in 2006, the company came back to the public markets, providing a nice return for the private equity sponsors, which included TPG Capital, Goldman Sachs Capital Partners and Bain Capital.

OK, so how about going private again? Actually, this is the latest rumor making the rounds. Although, it sounds like the negotiations are in the early stages.

There are many financial industry stocks that some investors think could be good plays for a rebounding market, such as JPMorgan Chase & Co. (JPM), Goldman Sachs Group, Inc. (GS) and Morgan Stanley (MS).

But Hilary Kramer, editor of GameChangerStocks.com, says that if you can only buy one stock in this sector, it should be in shares of private equity firm Fortress Investment Group (FIG).

You may be interested in buying an HDMI cable or a cell phone from RadioShack (RSH), but it looks like a few private equity companies and one competitor may be interested in buying the entire company. According to dealReporter, RadioShack had set a July 1 deadline for non-binding indications of interest from any company that was looking at buying the company.

Analysts are speculating that the same private equity companies that were mentioned in a June 1 New York Post article -- Blackstone Group, Kohlberg Kravis Roberts, Bain Capital and TPG -- might still be interested in the consumer electronic retailer. That same article also mentioned that Best Buy Co., Inc. (BBY) may be interested in clearing the competitive landscape by acquiring RadioShack.

Several takeover rumors cropped up this morning. One of those is that RadioShack (RSH) is in the sights of many possible suitors. Those suitors include Blackstone Group (BX), Kohlberg Kravis Roberts, Bain Capital, TPG, and potentially Best Buy (BBY).

These rumors had the shares trading higher this morning, which is really a continuation of RSH's longer-term trend. Since March 2009, RSH has trekked steadily higher, overtaking the 10-month moving average in the process. That said, the stock is stuck just below the $23 level.

Private equity firm Apollo Management raised $239.4 million in an IPO for its portfolio company, Metals USA Holdings Corp. (MUSA). The offering came to $20 per share, which was at the top of the $18 to $20 range. In all, Apollo has realized a tidy 266% return on its investment (since 2005).

This was good news for Apollo, which just this week had to scrap its $2.4 billion deal for Cedar Fair (FUN).