Value-oriented Equity Investment Ideas for Sophisticated Investors

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Table of Contents EDITORIAL COMMENTARY ..........................................................................5 50+ PORTFOLIOS WITH SIGNAL VALUE™ .................................................9

AKRE CAPITAL (CHUCK AKRE) ................................................................................................ 10 APPALOOSA (DAVID TEPPER) ................................................................................................. 11 BARES CAPITAL (BRIAN BARES).............................................................................................. 12 BAUPOST (SETH KLARMAN) .................................................................................................... 13 BERKSHIRE HATHAWAY (WARREN BUFFETT) ........................................................................... 14 BLUE RIDGE (JOHN GRIFFIN) .................................................................................................. 15 BP CAPITAL (BOONE PICKENS)............................................................................................... 16 BRAVE WARRIOR (GLENN GREENBERG) .................................................................................. 17 BREEDEN CAPITAL (RICHARD BREEDEN) ................................................................................. 18 CASTLE POINT CAPITAL (TODD COMBS) .................................................................................. 19 CENTAUR VALUE (ZEKE ASHTON) ........................................................................................... 20 CHILDREN’S INVESTMENT (CHRIS HOHN) ................................................................................. 21 CHOU ASSOCIATES (FRANCIS CHOU) ...................................................................................... 22 CLARIUM (PETER THIEL) ........................................................................................................ 23 EAGLE (BOYKIN CURRY) ........................................................................................................ 24 EDINBURGH PARTNERS (SANDY NAIRN) .................................................................................. 25 ESL INVESTMENTS (EDDIE LAMPERT) ..................................................................................... 26 FAIRFAX (PREM WATSA) ........................................................................................................ 27 FAIRHOLME (BRUCE BERKOWITZ) ........................................................................................... 28 FIRST PACIFIC (BOB RODRIGUEZ AND STEVEN ROMICK) ........................................................... 29 GATES CAPITAL (JEFF GATES) ............................................................................................... 30 GLENVIEW (LARRY ROBBINS) ................................................................................................. 31 GREENLIGHT (DAVID EINHORN) .............................................................................................. 32 GRUSS (HOWARD GUBERMAN) ............................................................................................... 33 H PARTNERS (REHAN JAFFER) ............................................................................................... 34 HARBINGER (PHIL FALCONE) .................................................................................................. 35 HAWKSHAW (KIAN GHAZI) ...................................................................................................... 36 ICAHN CAPITAL (CARL ICAHN) ................................................................................................. 37 KLEINHEINZ CAPITAL (JOHN KLEINHEINZ) ................................................................................ 38 LANE FIVE (LISA RAPUANO) .................................................................................................... 39 LEUCADIA (IAN CUMMING AND JOE STEINBERG) ....................................................................... 40 LONE PINE (STEVE MANDEL) .................................................................................................. 41 MARKEL GAYNER (TOM GAYNER) ........................................................................................... 42 MAVERICK (LEE AINSLE) ........................................................................................................ 43 MHR (MARK RACHESKY) ....................................................................................................... 44 MSD CAPITAL (GLENN FUHRMAN AND JOHN PHELAN) .............................................................. 45 PABRAI FUNDS (MOHNISH PABRAI) ......................................................................................... 46 PAULSON & CO. (JOHN PAULSON) .......................................................................................... 47 PENNANT (ALAN FOURNIER) ................................................................................................... 48 PERSHING SQUARE (BILL ACKMAN) ........................................................................................ 49 SAGEVIEW (ED GILHULY AND SCOTT STUART) ......................................................................... 50 SCOUT (JAMES CRICHTON) .................................................................................................... 51 SECOND CURVE (TOM BROWN) .............................................................................................. 52 SHUMWAY CAPITAL (CHRIS SHUMWAY) ................................................................................... 53 SOUTHEASTERN (MASON HAWKINS) ....................................................................................... 54 SPENCER (KEN SHUBIN STEIN) ............................................................................................... 55 TETON (QUINCY LEE) ............................................................................................................. 56 THIRD POINT (DAN LOEB)....................................................................................................... 57 TIGER GLOBAL (CHASE COLEMAN) ......................................................................................... 58 VIKING GLOBAL (ANDREAS HALVORSEN) ................................................................................. 59 WEITZ FUNDS (WALLY WEITZ) ................................................................................................ 60 WEST COAST (LANCE HELFERT AND PAUL ORFALEA) ............................................................... 61 WINTERGREEN (DAVID WINTERS) ........................................................................................... 62 WL ROSS & CO. (WILBUR ROSS) ........................................................................................... 63

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2010 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com November 26, 2010 – Page 4 of 167

NEW OR INCREASED SUPERINVESTOR HOLDINGS ............................. 64 ALERE (ALR) – BAUPOST , KLEINHEINZ ....................................................................... 64 BECTON DICKINSON (BDX) – AKRE , APPALOOSA , BERKSHIRE , GREENLIGHT ......... 68 COMPUCREDIT (CCRT) – SECOND CURVE .......................................................................... 72 ENCANA (ECA) – BP CAPITAL ............................................................................................ 76 FIBREK (TORONTO: FBK) – FAIRFAX ................................................................................... 80 FORTUNE BRANDS (FO) – MARKEL , PERSHING SQUARE ............................................... 84 GENERAL DYNAMICS (GD) – EDINBURGH , MARKEL , WINTERGREEN .............................. 88 JC PENNEY (JCP) – PERSHING SQUARE .......................................................................... 92 KOHLBERG KRAVIS ROBERTS & CO. (KKR) – THIRD POINT ................................................ 96 POLO RALPH LAUREN (RL) – LONE PINE ........................................................................... 100 SANDRIDGE ENERGY (SD) – BP CAPITAL , FAIRFAX , SAGEVIEW , TETON , WEITZ 104 TAKE-TWO INTERACTIVE (TTWO) – GLENVIEW , ICAHN ................................................... 108 TAYLOR CAPITAL (TAYC) – SECOND CURVE ..................................................................... 112 VERIGY (VRGY) – GREENLIGHT ..................................................................................... 116

UNCHANGED OR OFFSETTING SUPERINVESTOR HOLDINGS .......... 121 COCA-COLA ENTERPRISES (CCE) – MAVERICK , PENNANT , SCOUT , THIRD POINT 121 DOMINO’S PIZZA (DPZ) – MSD , TIGER GLOBAL ........................................................ 124 INTEL (INTC) – APPALOOSA , CLARIUM , EDINBURGH , MARKEL , PENNANT ....... 128 ST. JOE (JOE) – FAIRHOLME , GREENLIGHT (SHORT) .......................................................... 132 TRANSDIGM (TDG) – LONE PINE , PENNANT , THIRD POINT , TIGER GLOBAL ......... 136 VANCEINFO (VIT) – LONE PINE , MAVERICK , SCOUT ................................................. 140

SNAPSHOT OF 100 SUPERINVESTOR HOLDINGS ............................... 144 IN ALPHABETICAL ORDER ..................................................................................................... 144 BY MARKET VALUE .............................................................................................................. 146 BY STOCK PRICE PERFORMANCE ......................................................................................... 148 BY ESTIMATED FORWARD P/E .............................................................................................. 150 BY AVERAGE ANNUAL ROE (PAST SEVEN YEARS) .................................................................. 152

FAVORITE STOCK SCREENS FOR VALUE INVESTORS ...................... 154 “MAGIC FORMULA,” BASED ON TRAILING OPERATING INCOME ................................................. 155 “MAGIC FORMULA,” BASED ON THIS YEAR’S EPS ESTIMATES ................................................. 156 “MAGIC FORMULA,” BASED ON NEXT YEAR’S EPS ESTIMATES ................................................ 157 CONTRARIAN: BIGGEST YTD LOSERS (DELEVERAGED & PROFITABLE) ..................................... 158 VALUE WITH CATALYST: CHEAP REPURCHASERS OF STOCK ................................................... 159 PROFITABLE DIVIDEND PAYORS WITH DECENT BALANCE SHEETS............................................ 160 DEEP VALUE: LOTS OF REVENUE, LOW ENTERPRISE VALUE ................................................... 161 DEEP VALUE: NEGLECTED GROSS PROFITEERS .................................................................... 162 ACTIVIST TARGETS: POTENTIAL SALES, LIQUIDATIONS OR RECAPS ......................................... 163

THIS MONTH’S TOP 10 WEB LINKS ....................................................... 164

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