This morning there were rumours that Coach (COH) was looking to sell itself. Since my first post on Coach, the share fell slightly more to about $46 and now they are up to about $49 in pre-market trading. This is one example of how good things can happen to cheap stocks.
With that said, however, it seems unlikely this rumour has any substance. For starters, the company is pretty big with a market cap of $13 billion. If you attach any sort of premium that and you get an even bigger number, which would be a very large deal to pull off. I think the easiest and best way to create shareholder value right now would be for the company to repurchase a lot of shares either through a a large self-tender offer or through a leveraged recap.