the superinvestors issue

Value-oriented Equity Investment Ideas for Sophisticated Investors

A Monthly Publication of BeyondProxy LLC Subscribe at manualofideas.com

“If our efforts can further the goals of our members by giving them a discernible edge over other market participants, we have succeeded.”

Copyright Warning: It is a violation of federal copyright law to reproduce all or part of this publication for any purpose without the prior written consent of BeyondProxy LLC. Email [email protected] if you wish to have multiple copies sent to you. © 2008-2011 by BeyondProxy LLC. All rights reserved.

Investing In The Tradition of Graham, Buffett, Klarman

Year IV, Volume IX September 1, 2011

When asked how he became so successful, Buffett answered: “We read hundreds and hundreds of annual reports every year.”

Top Ideas In This Report

Brookfield Residential (NYSE: BRP) ……………………. 90

Microsoft (NYSE: MSFT) …………………. 138

Sealy (NYSE: ZZ) ……………………… 154

Also Inside

Editor’s Commentary ……………….. 5

MOI Model Portfolios ………………. 8

Interview with Lisa Rapuano ……... 10

Portfolios with Signal Value™ …… 18

Screening for Superinvestor Stocks.. 76

20 Superinvestor Holdings ……….. 86

Favorite Value Screens …………… 166

This Month’s Top Web Links …….. 175

About The Manual of Ideas

Our goal is to bring you investment ideas that are compelling on the basis of value versus price. In our quest for value, we analyze the top holdings of top fund managers. We also use a proprietary methodology to identify stocks that are not widely followed by institutional investors.

Our research team has extensive experience in industry and security analysis, equity valuation, and investment management. We bring a “buy side” mindset to the idea generation process, cutting across industries and market capitalization ranges in our search for compelling equity investment opportunities.

THE SUPERINVESTOR ISSUE

► Screening for bargains owned by superinvestors

► Latest holdings of 50+ top investors

► 20 companies profiled by MOI research team

► Proprietary selection of Top 3 candidates for investment

► Plus: Exclusive interview with Lisa Rapuano

► Plus: The Manual of Ideas Model Portfolios NEW!

► Plus: Favorite stock screens for value investors

Superinvestor companies mentioned in this issue include 3M, ABB, Abbott Labs, Accenture, AIG, Altria Group, Amazon.com,

American Express, Amgen, Anadarko Petroleum, Anheuser-Busch, Apache, Apple, AstraZeneca, AT&T, Baidu.com, Banco Santander, Bank of America,

Barrick Gold, Berkshire Hathaway, BP, Bristol Myers Squibb, Brookfield Asset Management, Brookfield Residential Properties,

Canadian Natural, Caterpillar, Cemex, Cisco Systems, Citigroup, Coca-Cola, Colgate Palmolive, Comcast, ConocoPhillips, Costco Wholesale,

CVS Caremark, Diageo, DIRECTV, Dollar General, eBay, Eli Lilly, EMC, Emerson Electric, Enterprise Products, Exxon Mobil, Female Health,

Flextronics, Freeport-McMoRan, Fresh Market, General Electric, General Motors, GlaxoSmithKline, Goldman Sachs, Google, Halliburton,

Hewlett-Packard, Home Depot, HomeAway, Huntington Ingalls Industries, IBM, Intel, Interval Leisure, INTL FCStone, Johnson & Johnson, JPMorgan Chase, Kraft Foods, Loews Corporation, MakeMyTrip,

MasterCard, McDonald’s, Medtronic, Merck, MetLife, Microsoft, Microsoft, Occidental Petroleum, Oracle, Owens Illinois, PepsiCo, Petroleo Brasileiro,

Pfizer, Philip Morris, Potash, Procter & Gamble, Qualcomm, Rockwell Collins, Royal Dutch Shell, Sanofi-Aventis, Santander Brasil,

Sara Lee, Schlumberger, Sealy Corporation, Suncor Energy, Syneron Medical, Target, Telefonica, Teva Pharma, TOTAL, U.S. Bancorp, Union Pacific, UnitedHealth, UPS, Valero Energy, Verizon, Visa, Vodafone,

Walgreen, Wal-Mart, Walt Disney, Wells Fargo, and more.

(analyzed companies are underlined)

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© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com September 1, 2011 – of 177

Table of Contents EDITORIAL COMMENTARY ......................................................................... 5

THE MANUAL OF IDEAS MODEL PORTFOLIOS ........................................ 8

EXCLUSIVE INTERVIEW WITH LISA RAPUANO ...................................... 10

50+ PORTFOLIOS WITH SIGNAL VALUE™ .............................................. 18

AKRE CAPITAL (CHUCK AKRE) ................................................................................................... 19 ALTAI CAPITAL (TOBY SYMONDS)............................................................................................... 20 ANCIENT ART / TETON (QUINCY LEE) ......................................................................................... 21 APPALOOSA (DAVID TEPPER) .................................................................................................... 22 ATLANTIC INVESTMENT (ALEXANDER ROEPERS) ......................................................................... 23 BARES CAPITAL (BRIAN BARES) ................................................................................................. 24 BAUPOST (SETH KLARMAN) ....................................................................................................... 25 BERKSHIRE HATHAWAY (WARREN BUFFETT) .............................................................................. 26 BLUE RIDGE (JOHN GRIFFIN) ..................................................................................................... 27 BP CAPITAL (BOONE PICKENS) .................................................................................................. 28 BRAVE WARRIOR (GLENN GREENBERG) .................................................................................... 29 BREEDEN CAPITAL (RICHARD BREEDEN) .................................................................................... 30 CENTAUR VALUE (ZEKE ASHTON) .............................................................................................. 31 CENTERBRIDGE (JEFFREY ARONSON AND MARK GALLOGLY) ...................................................... 32 CHILDREN’S INVESTMENT (CHRIS HOHN) ................................................................................... 33 CHOU ASSOCIATES (FRANCIS CHOU) ......................................................................................... 34 EAGLE CAPITAL (BOYKIN CURRY) .............................................................................................. 35 EAGLE VALUE (MERYL WITMER) ................................................................................................ 36 EDINBURGH PARTNERS (SANDY NAIRN) ..................................................................................... 37 ESL INVESTMENTS (EDDIE LAMPERT) ........................................................................................ 38 FAIRFAX (PREM WATSA)............................................................................................................ 39 FAIRHOLME (BRUCE BERKOWITZ) .............................................................................................. 40 FORCE CAPITAL (ROBERT JAFFE) .............................................................................................. 41 GATES CAPITAL (JEFF GATES)................................................................................................... 42 GLENVIEW (LARRY ROBBINS) .................................................................................................... 43 GOLDENTREE (STEVE TANANBAUM) .......................................................................................... 44 GREENHAVEN (ED WACHENHEIM) .............................................................................................. 45 GREENLIGHT (DAVID EINHORN) ................................................................................................. 46 H PARTNERS (REHAN JAFFER) .................................................................................................. 47 HARBINGER (PHIL FALCONE) ..................................................................................................... 48 HAWKSHAW (KIAN GHAZI) ......................................................................................................... 49 HOUND PARTNERS (JONATHAN AUERBACH) ............................................................................... 50 ICAHN ENTITIES (CARL ICAHN) ................................................................................................... 51 INTERNATIONAL VALUE ADVISERS (CHARLES DE VAULX) ............................................................ 52 JOHO CAPITAL (ROBERT KARR) ................................................................................................. 53 LANE FIVE (LISA RAPUANO) ....................................................................................................... 54 LEUCADIA (IAN CUMMING AND JOE STEINBERG) ......................................................................... 55 LONE PINE (STEVE MANDEL) ..................................................................................................... 56 MARKEL GAYNER (TOM GAYNER) .............................................................................................. 57 MHR (MARK RACHESKY) .......................................................................................................... 58 MSD CAPITAL (GLENN FUHRMAN AND JOHN PHELAN) ................................................................ 59 PABRAI FUNDS (MOHNISH PABRAI) ............................................................................................ 60 PAULSON & CO. (JOHN PAULSON) ............................................................................................. 61 PENNANT (ALAN FOURNIER) ...................................................................................................... 62 PERSHING SQUARE (BILL ACKMAN) ........................................................................................... 63



SAGEVIEW (ED GILHULY AND SCOTT STUART) ........................................................................... 64 SCOUT (JAMES CRICHTON)........................................................................................................ 65 SECOND CURVE (TOM BROWN) ................................................................................................. 66 SOUTHEASTERN (MASON HAWKINS) .......................................................................................... 67 SPENCER (KEN SHUBIN STEIN) .................................................................................................. 68 THIRD POINT (DAN LOEB) .......................................................................................................... 69 TIGER GLOBAL (CHASE COLEMAN) ............................................................................................ 70 VALUEACT (JEFFREY UBBEN) .................................................................................................... 71 WEITZ FUNDS (WALLY WEITZ) ................................................................................................... 72 WEST COAST (LANCE HELFERT AND PAUL ORFALEA) ................................................................. 73 WINTERGREEN (DAVID WINTERS) .............................................................................................. 74 WL ROSS & CO. (WILBUR ROSS) ............................................................................................... 75

SCREENING 900+ HOLDINGS OF 50+ SUPERINVESTORS .................... 76

TOP 100, BY MARKET VALUE ..................................................................................................... 76 TOP 100, BY THIS FY P/E (CONSENSUS ESTIMATES) .................................................................. 78 TOP 100, BY NEXT FY P/E (CONSENSUS ESTIMATES) ................................................................. 80 TOP 100, BY TRAILING GROSS PROFIT TO ENTERPRISE VALUE ................................................... 82 TOP 100, BY TANGIBLE BOOK VALUE TO MARKET VALUE ............................................................ 84

PROFILING 20 SUPERINVESTOR HOLDINGS ......................................... 86

BP (BP) – BAUPOST , BP CAPITAL , CHOU , GREENLIGHT , THIRD POINT .............. 86 BROOKFIELD RESIDENTIAL (BRP) – MARKEL , PABRAI .................................................. 90 CEMEX (CX) – SOUTHEASTERN ............................................................................................. 94 DOLLAR GENERAL (DG) – BRK , LONE PINE , PENNANT ................................................ 98 FEMALE HEALTH (FHCO) – BARES ..................................................................................... 102 FLEXTRONICS (FLEX) – GLENVIEW ..................................................................................... 106 FRESH MARKET (TFM) – SCOUT ...................................................................................... 110 HOMEAWAY (AWAY) – TIGER GLOBAL ............................................................................. 114 HUNTINGTON INGALLS (HII) – GREENLIGHT ....................................................................... 118 INTERVAL LEISURE (IILG) – BARES , GATES , WEITZ ...................................................... 122 INTL FCSTONE (INTL) – BARES , LEUCADIA ..................................................................... 126 LOEWS (L) – EAGLE , SOUTHEASTERN .............................................................................. 130 MAKEMYTRIP (MMYT) – TIGER GLOBAL ............................................................................. 134 MICROSOFT (MSFT) –BAUPOST , EDINBURGH , GREENLIGHT , IVA , MARKEL … ..... 138 OWENS ILLINOIS (OI) – ATLANTIC INVESTMENT .................................................................... 142 ROCKWELL COLLINS (COL) – GREENHAVEN , PENNANT , VALUEACT ........................... 146 SARA LEE (SLE) – THIRD POINT , VALUEACT .................................................................... 150 SEALY (ZZ) – H PARTNERS ................................................................................................. 154 SYNERON (ELOS) – BAUPOST ............................................................................................. 158 VALERO ENERGY (VLO) – APPALOOSA , PENNANT ............................................................ 162

FAVORITE SCREENS FOR VALUE INVESTORS .................................... 166

“MAGIC FORMULA,” BASED ON TRAILING OPERATING INCOME ................................................... 166 “MAGIC FORMULA,” BASED ON THIS YEAR’S EPS ESTIMATES ................................................... 167 “MAGIC FORMULA,” BASED ON NEXT YEAR’S EPS ESTIMATES .................................................. 168 CONTRARIAN: BIGGEST YTD LOSERS (DELEVERAGED & PROFITABLE) ....................................... 169 VALUE WITH CATALYST: CHEAP REPURCHASERS OF STOCK ..................................................... 170 PROFITABLE DIVIDEND PAYORS WITH DECENT BALANCE SHEETS ............................................. 171 DEEP VALUE: LOTS OF REVENUE, LOW ENTERPRISE VALUE ..................................................... 172 DEEP VALUE: NEGLECTED GROSS PROFITEERS ....................................................................... 173 ACTIVIST TARGETS: POTENTIAL SALES, LIQUIDATIONS OR RECAPS ........................................... 174

THIS MONTH’S TOP 10 WEB LINKS ....................................................... 175



Editorial Commentary The recent market turmoil carries with it echoes of 2008, but relying too heavily on analogies from the last market panic seems misguided. Europe and the U.S. must address serious sovereign debt issues, but the financial system itself appears less vulnerable than in late 2008.

There is now no doubt that Bernanke’s Fed will do everything in its power to alleviate the pain of market participants. The Fed is doing many foolish things and distorting capital allocation decisions, but one thing is clear: Given the central bank’s ability to print dollars, repayment of U.S. government debt in nominal terms is not in doubt. Neither is the Fed’s ability to flood the financial system with cheap liquidity.

While we are sympathetic to the cautious views of superinvestors like George Soros and Seth Klarman, we are equally sympathetic to the view that preferring an asset that is easily printed in unlimited quantities is foolish. Holding cash has little appeal to us following the recent market decline. We would much rather own cheap blue-chip corporations such as Cisco Systems (CSCO), Dell (DELL), Goldman Sachs (GS), Hewlett-Packard (HPQ), Microsoft (MSFT), Pfizer (PFE), and Sony (SNE), to name a few. HP’s Leo Apotheker deserves much criticism for his recent boneheaded allocation of capital (e.g., buying Autonomy instead of HP stock), but this does not mean investors should miss out on the capital appreciation HP shares will likely deliver over several years. Never let anger get in the way of profits.

Researching this superinvestor issue has been quite exciting for us because most recent superinvestor buys have traded down materially on little or no news. For those who are not paralyzed by macro concerns, this presents an opportunity to scrutinize investments favored by some of the smartest value investors around — and to buy at a discount. Probabilistically speaking, this doesn’t sound like a losing proposition.

We find the following three superinvestor holdings particularly noteworthy:

Brookfield Residential (NYSE: BRP, $7.60 per share; MV $750 million)

Brookfield Residential Properties was formed via the March 31st merger of Brookfield Homes and the land and housing division of Brookfield Properties.

BRP provides an opportunity to invest in the North American residential housing market at a below-book quotation and in partnership with Brookfield Asset Management, a highly regarded Canadian manager of real assets.

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While BRP carries no current payout, the company appears likely to grow book value at a respectable rate. BRP controls more than 100,000 residential lots and has dominant market positions in Western Canada. For example, one in five Calgary residents live in a Brookfield community. BRP sold a total of 4,000 lots and homes in 2010, with the potential to accelerate sales in a recovering real estate market.

The relatively strong balance sheet should allow Brookfield to acquire assets opportunistically on favorable terms, particularly in selected U.S. markets.

Following the formation of BRP at the end of Q1, superinvestors Tom Gayner of Markel and Mohnish Pabrai established small positions in the company. While Pabrai’s stake likely originated from his existing position in Brookfield Properties (BPO), we believe BRP’s fundamentals and recent market quotation may warrant additional superinvestor interest going forward.

Microsoft (Nasdaq: MSFT, $25 per share; MV $210 billion)

At the risk of inviting criticism for bringing you an idea of which you are undoubtedly already aware, we once again highlight software giant Microsoft. The shares continue to trade in the mid-$20s despite steady increases in revenue, profits, and free cash flow. To grasp just how stark the change in the market’s judgment of Microsoft has been over the past decade, consider that the share price has fluctuated around $25 per share while net income has increased from $8 billion to $23 billion and the share count has declined from 11.1 billion to 8.5 billion. (This reminds us a bit of the picture of Lab Corp. that Zeke Ashton painted at the recent Nexus 2011 value investing conference.)

At $25 per share, Microsoft trades at 8.7x consensus EPS of $2.87 for the fiscal year ending June 30, 2012, and 7.9x consensus EPS of $3.16 for FY13. These multiples ignore the fact that, as of June 30th, Microsoft had $32 billion (~$3.75 per share) of net cash, not counting $11 billion in long-term investments and $8.5 billion for Skype. Adjusting for post-Skype net cash, Microsoft trades at an estimated 7.4x FY12 and 6.7x FY13 EPS. But the story doesn’t end there: The Online Services Division, which includes Bing and MSN, lost $2.6 billion pretax in FY11. Assigning a value of zero to this Division while also excluding an estimated $2 billion loss from consensus earnings estimates, Microsoft shares trade at roughly 6.8x FY12 EPS and 6.3x FY13 EPS. In addition, Skype has the potential to “move the needle” over time due to its 170 million-strong global user base. Finally, we note that Microsoft’s Xbox assets appear to have under-earned relative to their potential.

Given these valuation metrics and Microsoft’s enviable business model, it is hardly surprising that the company is widely owned by the superinvestors we track. In fact, it is the top holding of superinvestors as a group. Most noteworthy, Seth

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Klarman established a new position of 12 million shares in Q2, while David Einhorn boosted Greenlight’s stake from 9 million shares in Q1 to 15 million shares in Q2.

Sealy (NYSE: ZZ, $1.70 per share; MV $165 million)

Sealy has led the U.S. mattress market for a long time (19% market share in 2010). The company generated $1.2 billion in sales last year, almost 10% more than competitor Tempur-Pedic (TPX). Meanwhile, Sealy’s enterprise value totals less than $900 million, compared to $4.0 billion for TPX. The high financial leverage of Sealy suggests that capital structure changes are likely, and management expects certain notes to convert into equity in 2012. Following the dilutive event, Sealy should end up with a manageable capital structure while retaining equity upside.

Distressed investor H Partners has been a recent buyer of Sealy common stock. While other investors have generally shunned the equity in favor of the debt, we find the equity interesting for aggressive investors focused on risk-reward rather than strictly on downside protection.

Sealy’s recent operating performance has been masked by one-time items, including $13 million in product launch expenses in 1H11. The new Posturepedic line appears to be meeting management’s rollout expectations.

Sealy as an enterprise is here to stay, and the equity deserves a closer look.

We are pleased to bring you an exclusive interview with Lisa Rapuano of Lane Five Capital Management. Lisa is one of the superinvestors we track on a regular basis. She first gained recognition in the investment community for the work she did at Legg Mason while working with Bill Miller. At Lane Five, she has carved out her own path, investing in misunderstood yet strong business at attractive prices. We’re sure you’ll enjoy Lisa’s insights and opinions.

Sincerely,

John Mihaljevic, CFA

and The Manual of Ideas research team

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The Manual of Ideas Model Portfolios

We are pleased to inaugurate a model portfolio consisting of the following three sub-portfolios:

Downside Protection Model Portfolio: Undervalued equities that, in our judgment, offer strong downside protection and material upside

Deep Value Model Portfolio: Equities that are deeply undervalued on an asset basis, but may have downside risk due to financial leverage

Magic Formula Model Portfolio: Equities that meet Joel Greenblatt’s dual criteria: high returns on capital employed, and high earnings yield

Since launching The Manual of Ideas in 2008, our goal has been to add value to your idea generation process by bringing you compelling equity investment ideas in a format that enables you to quickly sift through a fairly large number of companies meeting certain value-oriented criteria.

In the January 2011 issue, we evaluated the price performance of the ideas highlighted by our team in each monthly issue. We found that those top monthly ideas had materially outperformed the S&P 500 Index. However, in order to make our idea generation process more valuable, we felt we needed a way to provide you with a more consistent view into our best ideas at any given time. This has led us to the creation of The Manual of Ideas Model Portfolios.

The model portfolios will enable you to track our favorite investments in three broad categories. We will track the performance of those ideas in real time on the Internet, enabling you to consume this information in a manner that suits your investment needs and preferences.

In the inaugural portfolios shown on the following page, we establish initial positions in twenty securities profiled in past issues of The Manual of Ideas. For illustrative purposes, we start with a portfolio of $1 million, choosing to allocate this fictional capital equally across the twenty companies.

As the model portfolios evolve over time, we may make greater allocations to certain securities or keep a portion of the model portfolios in “cash.”

Please note that the model portfolios are not buy and sell recommendations. As always, you are solely responsible for your investment decisions. Persons or entities affiliated with The Manual of Ideas and BeyondProxy LLC, our publisher, may buy or sell any securities shown in the model portfolios. We will not inform you of such trades, and we will not necessarily update our thesis on the securities contained in the model portfolios. For more information and disclosures, see our Terms of Use at http://manualofideas.com/terms.html



THE MANUAL OF IDEAS MODEL PORTFOLIOS

Latest % Move to Model Portfolio Share 52-Week “Entry Information”

Price Low High Date Price Allocation Comments

Downside Protection Model Portfolio

GigaMedia GIGM $0.92 -2 143 8/24 $0.92 $50,000 Trades at fraction of book, with large cash position; buying back stock

Gravity GRVY $1.51 -17 45 8/24 $1.51 $50,000 Trades below cash; profitable, with major game (RO2) expected in 1Q12

K-Swiss KSWS $5.06 -3 161 8/24 $5.06 $50,000 Trades in line with tangible book, with net cash and capable, friendly CEO

Sony SNE $20.41 -1 81 8/24 $20.41 $50,000 Major Japanese exporter with >$80 billion of revenue and strong franchises

$200,000

Deep Value Model Portfolio

Arbor Realty ABR $4.01 -11 87 8/24 $4.01 $50,000 Steep discount to adjusted book; buying back stock; Cooperman buying

Crimson Exploration CXPO $2.41 -17 96 8/24 $2.41 $50,000 Strong asset value, with natural gas price leverage; Oaktree owns 34%

Torm TRMD $1.99 0 302 8/24 $1.99 $50,000 Beaten-down shipping company; $100 million rights offering a positive

Harvest Natural HNR $9.76 -34 79 8/24 $9.76 $50,000 Strong Venezuela assets; recent U.S. asset sale; exploration upside

MEMC WFR $6.80 -27 121 8/24 $6.80 $50,000 Plays across solar value chain; trades at steep discount to tangible book

Nokia NOK $6.06 -20 94 8/24 $6.06 $50,000 ~$9 billion net cash; strong global distribution, patents, MSFT partnership

Penson PNSN $2.08 -16 256 8/24 $2.08 $50,000 Steep discount to book; problems look transitory; insiders own 18%

Thomas Properties TPGI $2.70 -26 70 8/24 $2.70 $50,000 Mgmt incentivized to create value; steep discount to sum-of-parts value

$400,000

Magic Formula Model Portfolio

Aeropostale ARO $11.28 -8 146 8/24 $11.28 $50,000 Teen retailer missed fashion cycle; high-return business, capable mgmt

Cisco CSCO $15.46 -14 59 8/24 $15.46 $50,000 Leader in growing data networking market, with net cash, strong FCF

Corinthian COCO $1.90 -17 287 8/24 $1.90 $50,000 Value of Heald alone may exceed recent EV; regulatory risks overblown?

Dell DELL $14.68 -23 20 8/24 $14.68 $50,000 Michael Dell focused on the right things: profitability, FCF, equity value

SanDisk SNDK $34.92 -8 53 8/24 $34.92 $50,000 Digital data storage company; consensus EPS estimate of $4.63 for 2012

Lender Processing LPS $16.23 -4 115 8/24 $16.23 $50,000 Profitable, not capital-intensive; cheap, but lacks downside protection

Microsoft MSFT $24.90 -6 18 8/24 $24.90 $50,000 Too cheap to ignore, esp. adjusted for cash and money-losing businesses

Net 1 UEPS $7.12 -15 98 8/24 $7.12 $50,000 High-ROIC, recurring-revenue processor, with incentivized CEO, catalyst

$400,000

The Manual of Ideas Model Portfolios – Grand Total $1,000,000

Access The Manual of Ideas Model Portfolios in Real Time!

Visit our Exclusive Members Area at

http://members.manualofideas.com



Exclusive Interview with Lisa Rapuano We recently had the pleasure of interviewing one of the superinvestors we track, Lisa Rapuano of Lane Five Capital Management.

The Manual of Ideas: Tell us about the genesis of Lane Five. What goals did you have at the outset, and what principles have guided you since then?

Lisa Rapuano: At the end of 2006, I sat down with a blank sheet of paper to design a firm and product I thought would do three things: (i) optimize the skills I had learned in my fifteen years (at the time) of managing money; (ii) create a vibrant workplace of smart, energetic people with shared values; and (iii) attract clients with a long-term focus and a deep understanding of our values and process.

To optimize my own skills, I looked at my experiences, my temperament, what I had loved to do and what I had not. I love and am good at picking apart companies, finding and evaluating contrarian ideas, gaining deep conviction from thorough research, looking at businesses with a long-term view, ignoring short-term noise, getting to know managements and companies exceedingly well, and working collaboratively with a small team. I’m very patient in my investments. So, Lane Five was designed to invest in a relatively small number of names with a three-to-five-year time horizon with no constraints on market cap or stylistic definitions of value.

We adopted a long-biased approach, where we run 60-100% long. We can hold tons of cash and/or short if we think the opportunities merit that approach, but we’re not running a hedged, volatility constrained portfolio. I think that shorting is appropriate in certain circumstances and the ability to short makes you a better analyst. When I co-managed a traditional long/short low exposure fund at Matador Capital Management, I learned a lot about shorting. I am very good at identifying bad businesses and high valuations, and if you are patient with those two characteristics in place, shorting can be a low-risk, value-added activity. However, if you are running a very long-term value portfolio on the long side, a traditional hedge portfolio is often largely mismatched with your long book and mismatched with your analytical resources. To have a large short book and manage risk, you must have many more positions and you have to be very sensitive to timing. This type of thinking is not the mirror image of the long investment process; it is actually counter to it. I found one could spend an inordinate amount of time on hedge shorts, add very little value and create a massive diversion of resources. So, when I decided to create something new, I decided shorting would be a limited part of the strategy and exposure would run predominately long.

Once I settled on the investment vehicle, I decided to have an innovative fee structure as well. Given the long bias, I did not think it appropriate to charge full hedge fund fees. However, given the specialty, boutique nature of the firm and the desire to have a small, cohesive team with a go anywhere approach, I decided the long-only market structure and fees also weren’t appropriate. I settled on a hybrid approach with a 1.5% management fee and a performance fee of 20%, charged only on positive returns above the S&P 1500 [includes all stocks in S&P 500, S&P 400 and S&P 600]. Initially, I deferred the performance fees for three years in exchange for a three-year lock-up. After the first three-

“To have a large short book and manage risk, you must have many more positions and you have to be very

sensitive to timing. This type of thinking is not the mirror image of the long investment process; it is actually counter to it. I found one could spend an inordinate amount of time

on hedge shorts, add very little value and create a

massive diversion of resources.”



year period expired, I elected to move to a one-year fee, still with the hurdle rates of both zero and the market, and a traditional high-water mark as well. This is a specialty fund with an appeal to a certain type of client. Since it is a hybrid, it doesn’t fit into a lot of institutions’ pre-defined “buckets”. I decided I didn’t need to compound the problem further by asking for a three-year lock-up in the market we’re in today. We’ve been very fortunate to find clients who understand and appreciate the approach.

After nearly five years, we remain as we set out to be. There are three of us on the investing team, and we have an operating person to handle all the non-investment related issues and a part-time marketing person to handle all the outreach and communications, though I also am very involved in that. We have about $125 million in AUM and will limit that based on keeping our team small, collaborative and cohesive. I’m not sure what that limited AUM number is, but it’s probably somewhere between where we are now and $1 billion. We have lots of room to grow and compound without changing what we do.

We set out a list of Core Values when launched, which I have found very helpful in guiding my decisions about the firm over the years.

Lane Five Core Values:

• Invest with integrity

• Strive for excellence in all areas

• Work with brilliant people

• Adapt and evolve actively

• Learn and read widely

• Collaborate with each other and with clients

• Be authentic, trustworthy and open

MOI: How would you describe the investment philosophy you adopted while working with Bill Miller at Legg? How has your approach evolved since then?

Rapuano: One of the great things about working for Bill all through the 1990s was we got to define and refine the process together. So, I came into working for this brilliant guy in the early 1990s and I learned a ton from just analyzing companies for him. In the mid 1990s, when I started doing technology stocks, and then AOL in 1996, we were all learning and adapting what were then “new” ideas of behavioral economics, Economic Value Added and ROIC concepts and things like that. Standards of practice in process have gotten much more sophisticated since then, but at the time we were, I think, way ahead of our time.

The core things I learned from Bill and from formalizing our process at Legg Mason back in the day haven’t changed. One is the value of a company is the present value of its future free cash flow. This is a concept that goes all the way back to the first dividend discount model developed by John Burr Williams in 1938. I find most people are still afraid of using discounted cash flow because there are so many sensitivities in the assumptions, but you really can’t dismiss the use of DCF if you use any sort of discount rate or earnings multiple

“…the value of a company is the present value of its future

free cash flow. This is a concept that goes all the way

back to the first dividend discount model developed by John Burr Williams in 1938.”



approach. It’s the same thing! But, somehow people think slapping a multiple on something is a less fuzzy approach. You have to choose the right multiple, and that’s all a DCF process does, help you disaggregate the elements of existing earnings power, growth, sustainability, and risk to determine the right multiple for this particular business.

Another element I learned from Bill is that since 100% of the value of a company is in the future, you simply cannot refuse to think about the future. So, a very intensive analysis of a business, its competitive advantage and its likely future path is another key element. I think this is something people associate strongly with Bill (and with a lesser extent me) because we have both owned these stellar growth companies and felt very comfortable that they were undervalued at points in time. This was simply because we understood that you had to look forward, and that it is logically more likely that something is undervalued because the market and investors misperceive the potential of a new business model as it is that they misperceive the value of assets that have an analyzable record of producing earnings and cash flow.

I developed a financial model at Legg that I still use, at least the core of it. It’s evolved fairly dramatically, (anyone who worked for me back then will be shocked to know it involves color now!) but it is designed to be a tool that allows you to understand how a business works and how to look at the value of the company in a variety of different ways. At Legg we called it determining the “Central Tendency of Value” which is a great term because it acknowledges that value is different from “Target Price”, that using multiple valuation techniques improves your likelihood of being correct, and that there are a variety of scenarios one has to consider to understand what a company is worth. I use these same ideas, and I am always open to and striving for a new and interesting and hopefully more accurate way to think about valuing an asset.

I saved the two most important things I learned from Bill for last. You must strive to learn and to actively adapt your tactics, and you must “know yourself” to understand how to obtain an advantage in the incredibly competitive business.

MOI: A core objective of Lane Five is to “find significantly undervalued companies and invest in them long-term.” What are the key factors you consider when appraising a business, and how much weight do you place on growth?

Rapuano: Valuing something is easy if you know how much cash flow it will generate, how much capital is required to generate that cash flow and how long the cash flow stream will persist. Of course, determining those things is incredibly difficult and can never be done with certainty.

We use a variety of approaches, always with a focus on the three elements above. It always starts with business analysis – what sort of business is this? What returns has it earned in the past, how has it grown, why might it be mispriced today, and can we reasonably assess a range of value in which we have confidence?

Once we have an idea of the sort of business model we’re working with, and if we think there is a decent chance it is quite undervalued and we can figure it out, we’ll start looking in depth at the financials. We go through a typical exercise in securities analysis, understanding the elements of the past in order to better predict what the future may hold. You learn a lot about a company just

“Valuing something is easy if you know how much cash flow it will generate, how

much capital is required to generate that cash flow and

how long the cash flow stream will persist. Of

course, determining those things is incredibly difficult and can never be done with

certainty.”



putting the numbers together, disaggregating the sources of profit in the past and understanding the assets and what cash these assets have thrown off.

Almost all companies in which we are looking to invest are in the midst of some controversy or setback that is giving us a price opportunity. We’ll look to the past to come up with a base of earnings power and cash flow generation that we think is more “normal”. Ideally, we can purchase something at the value of the depressed cash flow stream should it never grow again, thus allowing us to profit from the normalization of earnings and the potential future growth.

With a firm view of the business model, we go into a lot of nuts and bolts of the process, attempting to estimate the most likely future of the company. We run lots of scenarios of what may happen, and we’ll value the company under all these various scenarios using all tools we think are appropriate, including DCF, private transaction comparisons, break-up values, and any multiples-based approach that is suitable. We spend a lot of time on our most-likely outcome case, but we also try to think through the value under a variety of other potential circumstances. This gives us a couple of great tools. First, it allows us to understand the range of possible outcomes for one company versus another. Some companies have a fairly tight range, others are incredibly wide. Second, it gives us an ability to differentiate between ideas that appear to have the same base-case undervaluation. I’d rather own something I feel very confident trades 50% below its value and has the potential to be 100%, even if that potential is a rather small probability, than something that is just 50% and that’s it.

This process is inherently probabilistic. We assign probabilities to scenarios based on common sense, but we don’t honestly know the exact probability. It is our hope that by at least thinking through these outcomes we might recognize when they start to occur, thus helping us understand when we’re wrong about something (so, a low probability negative scenario starts to look more likely) or when we’ve been too conservative and to manage our position size accordingly.

You ask specifically how much weight we put on growth. We don’t consciously go out and look for growth, instead we look for situations where what is discounted in the price is significantly below what is most likely to happen. In some cases, we find things that are undervalued because the market doesn’t understand a growth opportunity. In others, we find things that are undervalued even if they never grow again. Growth has a lot of value, and we try to recognize that, but we understand that the further out into the future you have to look to realize value, the more discount you might need to make the investment make sense.

MOI: How do you judge whether managements have shareholder interests at heart? Do you need the CEO to own a lot of stock?

Rapuano: You can learn a lot about managements by not talking to them until you’ve analyzed the financials. Managements who truly understand shareholder value usually have been successful in creating it over time, whether they say all the right things or not. One of the absolute worst CEOs I ever knew, who shall remain nameless, talked about ROIC and free cash flow and shareholder friendliness extremely well, but when you looked at his record the company rarely earned its cost of capital, had made stupid, expensive value-destroying acquisitions, had a terrible rubber stamp board of directors and had compensation packages that enriched him and his minions whether they did a

“Almost all companies in which we are looking to invest are in the midst of

some controversy or setback that is giving us a price

opportunity… Ideally, we can purchase something at the value of the depressed cash flow stream should it never

grow again, thus allowing us to profit from the

normalization of earnings and the potential future

growth.”



good job or not. But, if you met the CEO in person he made you feel good about their processes. So, what I’m saying is judge a management by what they do, not by what they say. Good returns, smart capital allocation and sensible, goal-oriented compensation are the cornerstones.

There are some basic common sense things we do like to see. We like companies that buy back stock when it is low and don’t when it is high, or that pay out special dividends when the cash is not deployable for a good return. We like companies that eschew acquisitions or store openings or other capital deployments when they think the price is too high. We like companies that set strong goals in bonus plans and then stick to not paying out those bonuses if they don’t hit the targets. We like companies that show a sense of frugality and cost consciousness as a business owner would. We analyze the boards pretty aggressively, to see if they are cronies or are qualified or have been part of not-so-great companies in the past.

We find that it is not a necessary condition for a CEO to own a lot of stock, but that in many companies that have the types of behaviors I’ve just described, there is management ownership of stock throughout.

We do talk to managements; we just try to have a quantification of their actual record before we do so. Once you do talk to them, it’s pretty easy to spot the ones that simply don’t get it. These are the guys that talk about their stock price, or the sell side, or the shorts, or that seem to always be doing what they think Wall Street wants them to do. Those kinds of managements may have good records, but you can be sure it’s just because they’re lucky.

MOI: How do you generate investment ideas?

Rapuano: Idea generation is fairly idiosyncratic, frankly. We run screens of high-return, low-multiple names (the so-called Magic Formula) and of low-multiple names and of things that have recently moved down in price aggressively. My favorite screen is the New Low list – at least it tells me what is truly out of favor. From there, it’s a fairly labor-intensive process of going through the names and seeing if any of them look like they would be down for temporary reasons and that there are decent business models on the other side of what is causing the controversy. More often than not, we come up with ideas from much more random sources than screens: magazine articles, talking with other managers, randomly typing the wrong ticker in Bloomberg, sell-side downgrades that might signal capitulation, looking at spin-offs or recapitalizations, tracking management changes and turnarounds. In my experience, the nice neat little funnel of screening to portfolio doesn’t really work. Undervalued things are sometimes hiding under expensive-looking or very complicated rocks.

MOI: In investing, good ideas are only one piece of the success equation. Skilled portfolio management is indispensable. You have said in the past that a portfolio should consist of positions with a range of different risk-reward profiles. What are the main challenges you face in constructing such a portfolio?

Rapuano: The main challenge is that risk is not quantifiable. Using the probability-based framework I described earlier, I try to make descriptive differentiation between one opportunity and another, and to make sure the portfolio has a representation of many differently described positions. When I say descriptive differentiation, I mean a narrative that I associate with a certain

“You can learn a lot about managements by not talking

to them until you’ve analyzed the financials. …judge a

management by what they do, not by what they say. Good

returns, smart capital allocation and sensible, goal-

oriented compensation are the cornerstones.”



name that helps me recall the range of possible outcomes, the confidence we have in our base case, the external factors that could make us wrong, and the amount of control a company really has on its own destiny. So, control and external factors are big parts of companies with high levels of cyclicality. Ranges of outcomes may be associated with this cyclicality and therefore I want to have a limit on holdings that are correlated with the same cyclical factors. External factors could also be non-cyclical – like regulation or Medicare reimbursement rates or oil prices or farm subsidies.

We do try to diversify in ways that ensure we are not counting on one economic trend to make our companies realize value, or are not taking too much exposure to a particular external factor. This sometimes has the effect of giving us sector diversification but we try to take that thinking to another level. The possible range of outcomes is a little trickier. Some businesses are very understandable and our investment thesis is often not that complicated for these types of businesses. Similarly, the things that could go very wrong are fewer. But, in these types of situations you also rarely have the outlier probability of a very large return. So, we own things with this type of profile. We also own things with much wider ranges of outcomes. These are what we consider riskier names. They must have the potential for the outlier upside return because the uncertainty is usually higher and the range is usually wider. As uncertainty abates, however, some of these distributions narrow and we end up with a lower-risk holding.

Portfolio construction as a whole is a very difficult process, and it doesn’t get the attention it deserves.

MOI: How did the volatility experienced during the financial crisis of 2008 affect your investment process, and have you tweaked your approach in any way as a result of the experience?

Rapuano: At the end of 2008, I identified the drivers of what made us do poorly, and which ones could be improved upon and which ones couldn’t. One has to be careful in a situation like this to distinguish outcome from process. If the bad outcome was a result of a bad process, you should fix, change and adapt. If the bad outcome is a result of bad luck, but the process behind decisions was solid, you really can’t do much about that. Unfortunately, 2008 had elements of both for Lane Five.

First, I’ll tell you what we did not do. We did not decide to become more macro-oriented. I believe that macro forecasting is impossible, and the best one can do is try to understand what is actually happening around them, not forecast it. I watched lots of value investors divert hours of time away from valuation and stocks into macro speculation, and I did not and do not think that is productive. Our philosophy has been to understand, and I did not change that. I could have vastly improved my execution of that understanding in 2008, but that is not a change in process, that’s just doing what you do better.

We did stress-test some of our valuation techniques and found that with our long-term orientation we were too prone to “look through” things when they started to deteriorate. We re-emphasized our commitment to using multiple valuation tools, including ones more focused on two- and three-year time horizons in addition to the five to ten-year models. We also recognized some big behavioral errors in a few of our larger mistakes that we hopefully will not

“One has to be careful in a situation like [the financial

crisis of 2008] to distinguish outcome from process. If the bad outcome was a result of

a bad process, you should fix, change and adapt. If the bad

outcome is a result of bad luck, but the process behind

decisions was solid, you really can’t do much about

that.”



repeat. The biggest one was overconfidence in a large position that honestly was a good idea, but we positioned it like a great idea because of positive feedback we received from almost everyone we talked to. My best ideas are never liked by anyone when I am buying them, so this should have been a huge red flag.

I also got a little more careful on position sizes. I am not afraid to take a large position and I think that when conviction is high and risk is low because of valuation, large positions are important and warranted. But, I think in 2008 I made the error of having larger positions because there was little else to buy. I am now more careful about saving the very large positions for truly great opportunities.

I’d like to make one more point about 2008. I don’t think any portfolio is truly crisis-proof. The biggest mistake we made was not recognizing when the markets moved from fear into panic. I have always bought fear and uncertainty – this is one of the only ways to find mispricing – but there is a real difference when you move into a state of panic. And even after and during that panic, it does turn out that buying into the fear was the right thing to do. You had to survive to buy, and you had to have cash to buy. To me, being ready to take advantage of that opportunity and to recognize the slide into panic were the greatest lessons of the time.

MOI: You famously embraced Amazon.com before it became a multi-bagger. What analysis led you to conclude that the company’s growth would not falter at some point? Do you still scrutinize Internet firms, and if so, what is your opinion of companies such as LinkedIn, Groupon, Zynga and Facebook?

Rapuano: When I embraced Amazon.com, it was the most reviled, hated, short-infested name in the world. It was written up in Barron’s negatively every single weekend for two years (thank you, Mark Veverka.) People thought it was going out of business. People thought it was burning billions and billions in cash (it wasn’t). People thought it would never make money.

I started buying it at $17 per share, and it went to $5.51, and I bought it all the way down. I didn’t have to conclude that growth would not falter at some point; I just had to believe there was a business there.

This was one of the most difficult investments I ever made, because it was so obviously bad to so many smart people. I think Joel Greenblatt still talks about how Amazon.com doesn’t have a competitive advantage, but when it was a single-digit-stock-price former high-flyer, there were virtually no true believers outside of Bill Miller and me and the rest of us at Legg. But, it’s also a classic case of how business analysis and an understanding of how the market might evolve, married with a very low price created a low-risk situation out of something that appeared to be a very high-risk situation. What I knew was that even under very disappointing circumstances, based on the cost advantage the company had, the cash generative model it possessed and the advantage it had over land-based retail, it could modestly grow sales at a single-digit CAGR to $10 billion or so in ten years, and a 5% operating margin, lower than most retailers. (It’s now a $34 billion sales company with “only” 4% margins because they reinvest in anything they can earn a return on and improve the competitive position.) Based on those now modest looking assumptions, and using astronomically high discount rates I thought the company was worth in the mid-$20s. The allure of it, though, was it was very clear that Jeff Bezos “got it” in

“When I embraced Amazon.com, it was the most reviled, hated, short-infested

name in the world. It was written up in Barron’s negatively every single

weekend for two years (thank you, Mark Veverka.) People thought it was going out of

business.”



that he knew the potential for the business, understood returns and that there was a chance it could be much, much better than a $10 billion company. I had scenarios that showed outcomes similar to where we are now, but I didn’t place any probability on them, I simply noted they were possible and I was not paying anything for them. As it developed into a multi-bagger it became more difficult, but by that time my understanding of the opportunity was much more robust and I understood very early on the dynamics of the market gave it a good chance to dominate multiple categories.

I do follow the Internet stocks still, but I do not own any of them right now. I look at the valuations backward, asking myself what growth would be required to justify the price and, even better, make money. I love thinking about new business models and watching them develop, but I think the market is pretty hip to the opportunities there and I don’t see a lot of mispricing, at least not yet. Just to be clear, I understand why they garner the valuations they do as well, they may be perfectly justified, I don’t know. It’s just not exactly the contrarian, out-of-favor mispriced opportunity I usually look for.

MOI: What is the single biggest mistake that keeps investors from reaching their goals?

Rapuano: Being human? Seriously. The most important thing to do is to understand your own temperament and skills, to develop a plan and to stick with it. But human nature is to go with what feels good, to look for social proof and to act out of fear and greed in times of stress. Developing an understanding of how you personally react to things and creating a structure around yourself that helps you optimize your strengths and minimize your tendency toward error is a huge advantage. Unfortunately, everything seems stacked to work against us. Even as professionals, the structure of the industry creates pressures to conform to stupid ways of investing because either they gather assets or they at least don’t get you fired. For individuals it’s even worse. It takes a lot of work to remove yourself from all the noise and the pressure and you still make mistakes. On the other hand, this is what makes our business so wonderful: you can always get better, you can always learn more and it’s never, ever boring.

MOI: Could you share a few books that you have found enlightening?

Rapuano: I just finished Howard Marks’ The Most Important Thing. It’s the best investment book I’ve read in ten years. But, your readers have probably read all the same investment books that I have read. My old standby is Peter L. Bernstein’s Against the Gods; I re-read that one all the time. What I find more useful is to read things outside of investments, where you can learn something new that may be indirectly insightful to either investing or self-analysis or just the way the world really works. In that vein, a recent topic I’ve found fascinating and helpful is cognitive psychology and brain plasticity. I think The Brain That Changes Itself by Norman Doidge is one of the more interesting books I’ve read. I’ll relate this answer back to one of my earlier ones: it’s important to learn and read widely, but you should read what interests you and not worry too much about whether it is directly applicable or not. Learning is good, it will pay off in your investing somewhere down the road. Or, it will just make you happier. Either way, you win.

“I just finished Howard Marks’ The Most Important

Thing. It’s the best investment book I’ve read in ten years.”



50+ Portfolios With Signal Value™ Revealing the Top Ideas of Top Investors

“Signal value” as opposed to “noise.” We present the

holdings of some of the world’s top investors. We look for

investors who have amassed impressive track records over

long periods of time. We choose these investors carefully

to avoid the noise inherent in most 13F-HR filings.

The following analysis is based on Schedules 13F-HR

(institutional holdings report) filed with the SEC for the most

recent quarter, as well as Schedules 13G or 13D and Forms 3

or 4 filed subsequent to the end of the quarter.

MOI Signal Rank answers the question, “What are

this investor’s top ten ideas right now?” Rather than

simply presenting each investor’s largest holdings as of the

recently filed quarter end, the MOI’s proprietary

methodology ranks the companies in each investor’s

portfolio based on the investor’s current level of conviction

in each holding, as judged by the MOI.

Our proprietary methodology takes into account a

number of variables, including the size of a position in an

investor’s portfolio, the size of a position relative to the

market value of the corresponding company, the most recent

quarterly change in the number of shares owned, and the

change in the stock price of a position since the most recent

quarterly filing date.

For example, an investor might have the most

conviction in a position that is only the tenth-largest

position in such investor’s portfolio. This might be the

case if an investor invests in a small company, resulting in

a holding that is simply too small to rank highly based on

size alone. On the other hand, such a holding might

represent 19.9% of the shares outstanding of the subject

company, suggesting a high level of conviction. Our

estimate of the conviction level would rise further if the

subject company has a 20% poison-pill threshold, thereby

suggesting that the investor has bought as much of the

subject company as is practically feasible.

Bill Ackman, Pershing Square Chuck Akre, Akre Capital Zeke Ashton, Centaur Capital Jonathan Auerbach, Hound Partners Brian Bares, Bares Capital Bruce Berkowitz, Fairholme Richard Breeden, Breeden Capital Tom Brown, Second Curve Warren Buffett, Berkshire Hathaway Francis Chou, Chou Associates Chase Coleman, Tiger Global James Crichton, Scout Ian Cumming and Joe Steinberg, Leucadia Boykin Curry, Eagle Charles de Vaulx, Int’l Value Advisors David Einhorn, Greenlight Phil Falcone, Harbinger Alan Fournier, Pennant Glenn Fuhrman and John Phelan, MSD Capital Jeffrey Gates, Gates Capital Tom Gayner, Markel Gayner Kian Ghazi, Hawkshaw Ed Gilhuly and Scott Stuart, Sageview Glenn Greenberg, Brave Warrior John Griffin, Blue Ridge Andreas Halvorsen, Viking Global Mason Hawkins, Southeastern Lance Helfert and Paul Orfalea, West Coast Chris Hohn, Children’s Investment Fund Carl Icahn, Icahn Robert Jaffe, Force Capital Rehan Jaffer, H Partners NEW Robert Karr, Joho Capital Seth Klarman, Baupost Eddie Lampert, ESL Investments Quincy Lee, Teton Capital Dan Loeb, Third Point Steve Mandel, Lone Pine Sandy Nairn, Edinburgh Partners Mohnish Pabrai, Pabrai Funds John Paulson, Paulson & Co. Boone Pickens, BP Capital Mark Rachesky, MHR Lisa Rapuano, Lane Five Larry Robbins, Glenview Alexander Roepers, Atlantic Investment Wilbur Ross, WL Ross Ken Shubin Stein, Spencer Toby Symonds, Altai Capital David Tepper, Appaloosa Steve Tananbaum, GoldenTree Jeffrey Ubben, ValueAct NEW Ed Wachenheim, Deephaven Prem Watsa, Fairfax Wally Weitz, Weitz Funds David Winters, Wintergreen Meryl Witmer, Eagle Value



Akre Capital (Chuck Akre) Chuck Akre has been in the investment business since 1968. While sometimes viewed as a small cap growth manager, Akre follows a value strategy that focuses on returns on equity, management quality and cash flow-oriented valuation analysis.

MOI Signal Rank™ – Top Current Ideas of Akre Capital

Market Price Shares Owned Holdings P/E (Est.) Price/ Value Recent from Recent from as % of This Next Tang.

Company / Ticker ($mn) ($) Jun. 30 (‘000) Mar. 31 Co. Fund* FY FY Book

1 Enstar Group / ESGR 1,324 91.56 -12% 469 2% 3% 9% 9x 8x 1.2x

2 MasterCard / MA 38,139 300.16 0% 186 17% <1% 11% 17x 14x >9.9x

3 Dollar Tree / DLTR 7,916 64.88 -3% 717 1% <1% 10% 17x 14x 5.6x

4 CarMax / KMX 5,768 25.49 -23% 799 62% <1% 4% 13x 12x 2.4x

5 Lamar Advertising / LAMR 1,712 18.43 -33% 1,590 26% 2% 6% >99x >99x n/m

6 Aeropostale / ARO 865 10.71 -39% 425 >100% <1% 1% 10x 8x 2.4x

7 CSX Corp. / CSX 22,344 20.40 -22% 53 >100% <1% 0% 12x 10x 2.5x

8 O’Reilly Automotive / ORLY 8,302 61.07 -7% 610 21% <1% 8% 17x 15x 3.5x

9 T. Rowe Price / TROW 11,906 46.44 -23% 101 14% <1% 1% 15x 13x 4.3x

10 Assured Guaranty / AGO 2,119 11.50 -29% 200 new <1% 0% 3x 4x .5x

Top Holdings of Akre Capital – By Dollar Value



1 American Tower / AMT 19,325 48.83 -7% 1,331 -4% <1% 13% 47x 36x n/m


3 Dollar Tree / DLTR 7,916 64.88 -3% 717 1% <1% 10% 17x 14x 5.6x

4 Ross Stores / ROST 8,191 70.03 -13% 632 0% <1% 9% 13x 12x 5.7x

5 Enstar Group / ESGR 1,324 91.56 -12% 469 2% 3% 9% 9x 8x 1.2x

6 Markel / MKL 3,655 377.04 -5% 112 0% 1% 9% 29x 24x 1.5x

7 O’Reilly Automotive / ORLY 8,302 61.07 -7% 610 21% <1% 8% 17x 15x 3.5x

8 Lamar Advertising / LAMR 1,712 18.43 -33% 1,590 26% 2% 6% >99x >99x n/m

9 CarMax / KMX 5,768 25.49 -23% 799 62% <1% 4% 13x 12x 2.4x

10 Hartford Financial / HIG 7,893 17.72 -33% 750 0% <1% 3% 6x 4x .4x

New Positions Sold Out Positions

Assured Guaranty / AGO

Diamond Hill Invest. / DHIL

Primo Water / PRMW

Kimberly-Clark / KMB

optionsXpress / OXPS

Portfolio Metrics * Sector Weightings *

Portfolio size $489 million

Top 10 as % of portfolio 81%

Median market value $4.7 billion

Average market value $23 billion

Median P/E (this FY) 14x

Median P/E (next FY) 12x

Median P / tangible book 2.4x

* Based on equity holdings disclosed in 13F-HR filings with the SEC. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services57%

Financial39%

Technology2%

Other2%



Altai Capital (Toby Symonds) Altai Capital was founded in 2009 by Rishi Bajaj, formerly of Greenwich-based Silver Point Capital, Toby Symonds, formerly of Stamford-based SAC Capital, and Steve Tesoriere, formerly of New York-based Anchorage Capital. The firm manages a highly concentrated portfolio of high-conviction, value-oriented equity investment ideas.

MOI Signal Rank™ – Top Current Ideas of Altai Capital



1 McMoRan Exploration / MMR 1,808 11.41 -38% 2,209 70% 1% 11% n/m n/m 1.9x

2 Six Flags / SIX 1,692 30.98 -17% 3,404 97% 6% 46% n/m 56x n/m

3 Dynegy / DYN 435 3.55 -43% 4,040 23% 3% 6% n/m n/m .2x

4 Blue Coat Systems / BCSI 544 12.54 -43% 529 new 1% 3% 20x 17x 3.1x

5 Energy XXI / EXXI 1,803 23.50 -29% 1,020 19% 1% 10% 9x 6x 1.9x

6 RealD / RLD 739 13.63 -42% 902 35% 2% 5% 32x 23x 5.1x

7 CapitalSource / CSE 1,769 5.48 -15% 1,877 83% <1% 4% 34x 14x .9x

8 MEMC Electronic / WFR 1,341 5.82 -32% 1,684 17% <1% 4% 7x 5x .7x

9 Leap Wireless / LEAP 671 8.53 -47% 1,793 0% 2% 7% n/m n/m n/m

10 XO Group / XOXO 250 8.24 -17% 1,013 -5% 3% 4% 59x 33x 2.0x

Top Holdings of Altai Capital – By Dollar Value



1 Six Flags / SIX 1,692 30.98 -17% 3,404 97% 6% 46% n/m 56x n/m

2 McMoRan Exploration / MMR 1,808 11.41 -38% 2,209 70% 1% 11% n/m n/m 1.9x



5 Dynegy / DYN 435 3.55 -43% 4,040 23% 3% 6% n/m n/m .2x

6 RealD / RLD 739 13.63 -42% 902 35% 2% 5% 32x 23x 5.1x


8 MEMC Electronic / WFR 1,341 5.82 -32% 1,684 17% <1% 4% 7x 5x .7x

9 XO Group / XOXO 250 8.24 -17% 1,013 -5% 3% 4% 59x 33x 2.0x

10 Blue Coat Systems / BCSI 544 12.54 -43% 529 new 1% 3% 20x 17x 3.1x


Blue Coat Systems / BCSI GenOn Energy / GEN





Average market value $1.2 billion





Services65%

Energy23%

Technology8%

Other5%



Ancient Art / Teton (Quincy Lee) Quincy Lee is an Austin, Texas-based value investor who is said to have compounded capital in his Teton investment partnership at an annual rate well in excess of 20%, net of fees.

MOI Signal Rank™ – Top Current Ideas of Teton Capital / Ancient Art



1 Microsoft / MSFT 201,497 24.05 -8% 865 new <1% 17% 8x 8x 4.6x

2 CBS / CBS 14,785 22.04 -23% 469 14% <1% 8% 12x 10x n/m

3 BofI Holding / BOFI 136 13.15 -9% 559 36% 5% 6% 5x 4x 1.0x

4 Aon / AON 14,466 44.28 -14% 360 0% <1% 13% 13x 11x n/m

5 NXP Semiconductors / NXPI 3,997 15.94 -40% 441 8% <1% 6% n/a n/a n/m

6 Gap / GPS 8,636 15.69 -13% 188 new <1% 2% 11x 9x >9.9x

7 Google / GOOG 158,512 490.92 -3% 10 new <1% 4% 14x 12x 3.6x

8 Bancorp / TBBK 241 7.25 -31% 610 0% 2% 4% 25x 11x .9x

9 Quality Distribution / QLTY 251 10.53 -19% 675 -19% 3% 6% 15x 11x n/m

10 Nicholas Financial / NICK 124 10.37 -13% 786 -9% 7% 6% n/a n/a 1.1x

Top Holdings of Teton Capital / Ancient Art – By Dollar Value



1 Microsoft / MSFT 201,497 24.05 -8% 865 new <1% 17% 8x 8x 4.6x

2 Aon / AON 14,466 44.28 -14% 360 0% <1% 13% 13x 11x n/m

3 CBS / CBS 14,785 22.04 -23% 469 14% <1% 8% 12x 10x n/m

4 Nicholas Financial / NICK 124 10.37 -13% 786 -9% 7% 6% n/a n/a 1.1x

5 BofI Holding / BOFI 136 13.15 -9% 559 36% 5% 6% 5x 4x 1.0x

6 Quality Distribution / QLTY 251 10.53 -19% 675 -19% 3% 6% 15x 11x n/m

7 NXP Semiconductors / NXPI 3,997 15.94 -40% 441 8% <1% 6% n/a n/a n/m

8 Valeant Pharma / VRX 11,699 39.66 -24% 176 -58% <1% 6% n/a n/a n/m

9 Liberty Global / LBTYA 10,304 36.64 -19% 171 -30% <1% 5% 28x 20x n/m

10 American Dental / ADPI 162 10.49 -19% 571 -37% 4% 5% 10x 10x n/m


Gap / GPS

Google / GOOG

Microsoft / MSFT

Ambassadors Group / EPAX

Credit Acceptance / CACC

Goldman Sachs / GS

Meta Financial / CASH

Northern Oil & Gas / NOG

Penn National Gaming / PENN

Sensata Tech / ST










Services30%

Financial29%

Technology26%

Other16%



Appaloosa (David Tepper) Tepper heads Appaloosa Management, which he founded in 1993 after leaving Goldman Sachs, where he had been the head trader on Goldman’s high-yield desk. Tepper’s specialty is in distressed investments and special situations.

MOI Signal Rank™ – Top Current Ideas of Appaloosa Market Price Shares Owned Holdings P/E (Est.) Price/ Value Recent from Recent from as % of This Next Tang.


1 Mosaic Company / MOS 28,144 63.02 -7% 2,390 new <1% 5% 11x 10x 2.9x

2 CVR Energy / CVI 2,118 24.46 -1% 7,335 >100% 8% 6% 7x 7x 2.3x

3 MPG Office Trust / MPG 127 2.49 -13% 4,702 new 9% 0% n/a n/a n/m

4 Valero Energy / VLO 10,768 18.82 -26% 7,762 >100% 1% 5% 5x 5x .7x

5 Mueller Water / MWA 317 2.04 -49% 11,231 20% 7% 1% n/m 29x n/m

6 Beazer Homes / BZH 120 1.58 -53% 2,653 94% 4% 0% n/m n/m .5x

7 Masco / MAS 2,706 7.56 -37% 2,472 >100% <1% 1% 84x 19x n/m

8 Marathon Oil / MRO 17,972 25.17 -21% 704 >100% <1% 1% 6x 6x 1.1x

9 Tesoro / TSO 2,757 19.16 -16% 1,530 >100% 1% 1% 5x 5x .8x

10 Western Refining / WNR 1,405 15.47 -14% 2,798 new 3% 1% 5x 5x 1.9x

Top Holdings of Appaloosa – By Dollar Value Market Price Shares Owned Holdings P/E (Est.) Price/ Value Recent from Recent from as % of This Next Tang.


1 Pfizer / PFE 137,864 17.67 -14% 14,495 -6% <1% 8% 8x 8x n/m

2 Citigroup / C 78,114 26.77 -36% 7,202 -6% <1% 6% 7x 5x .6x

3 CVR Energy / CVI 2,118 24.46 -1% 7,335 >100% 8% 6% 7x 7x 2.3x

4 Goodyear Tire / GT 2,659 10.88 -35% 14,199 -7% 6% 5% 7x 5x >9.9x


6 Macy’s / M 9,893 23.18 -21% 6,313 -6% 1% 5% 9x 8x 6.2x

7 Valero Energy / VLO 10,768 18.82 -26% 7,762 >100% 1% 5% 5x 5x .7x

8 CF Industries / CF 11,826 164.81 16% 867 -7% 1% 5% 8x 9x 4.2x

9 International Paper / IP 10,346 23.67 -21% 5,097 -11% 1% 4% 8x 7x 1.9x

10 United Continental / UAL 5,707 17.27 -24% 5,566 -3% 2% 3% 5x 3x n/m


Alpha Natural / ANR

Calumet Specialty / CLMT

Cliffs Natural / CLF

General Motors / GM

Google / GOOG

Mosaic Company / MOS

MPG Office Trust / MPG

Walter Energy / WLT

Western Refining / WNR

Banco Santander / STD

Morgans Hotel / MHGC

Newcastle Investment / NCT


Portfolio size $3.1 billion








Financial19%

Technology17%

Basic Materials14%

Other50%



Atlantic Investment (Alexander Roepers) Alexander Roepers founded Atlantic in 1988. In an interview with hedgefundnews.com Roepers described himself as “family-oriented, persistent, disciplined, optimistic and trying hard to not take himself (or life’s travail) too seriously.”

MOI Signal Rank™ – Top Current Ideas of Atlantic Investment Management



1 Ashland / ASH 3,705 47.49 -27% 2,200 new 3% 13% 13x 9x 2.8x

2 Owens Illinois / OI 2,708 16.49 -36% 6,350 4% 4% 13% 7x 6x n/m

3 Timken / TKR 3,255 33.16 -34% 450 new <1% 2% 7x 6x 1.8x

4 Nalco Holding / NLC 4,451 32.07 15% 5,000 >100% 4% 20% 19x 15x n/m

5 Raytheon / RTN 14,099 39.87 -20% 3,000 15% <1% 15% 8x 7x n/m

6 Oshkosh / OSK 1,460 16.01 -45% 4,200 83% 5% 8% 5x 8x n/m

7 Stanley Black Decker / SWK 9,448 56.12 -22% 350 >100% <1% 2% 11x 9x n/m

8 Mattel / MAT 8,120 23.68 -14% 700 75% <1% 2% 11x 10x 5.7x

9 Crown Holdings / CCK 5,063 33.50 -14% 680 70% <1% 3% 12x 10x n/m

10 TE Connectivity / TEL 12,174 28.09 -24% 365 new <1% 1% 9x 8x 3.7x

Top Holdings of Atlantic Investment Management – By Dollar Value



1 Nalco Holding / NLC 4,451 32.07 15% 5,000 >100% 4% 20% 19x 15x n/m

2 Raytheon / RTN 14,099 39.87 -20% 3,000 15% <1% 15% 8x 7x n/m

3 Energizer Holdings / ENR 4,804 69.86 -3% 1,620 -1% 2% 14% 13x 11x n/m

4 Owens Illinois / OI 2,708 16.49 -36% 6,350 4% 4% 13% 7x 6x n/m

5 Ashland / ASH 3,705 47.49 -27% 2,200 new 3% 13% 13x 9x 2.8x

6 Oshkosh / OSK 1,460 16.01 -45% 4,200 83% 5% 8% 5x 8x n/m

7 Crown Holdings / CCK 5,063 33.50 -14% 680 70% <1% 3% 12x 10x n/m

8 Stanley Black Decker / SWK 9,448 56.12 -22% 350 >100% <1% 2% 11x 9x n/m

9 Mattel / MAT 8,120 23.68 -14% 700 75% <1% 2% 11x 10x 5.7x

10 Timken / TKR 3,255 33.16 -34% 450 new <1% 2% 7x 6x 1.8x


Ashland / ASH

CIRCOR International / CIR

TE Connectivity / TEL

Timken / TKR FMC Corp. / FMC

General Cable / BGC

ITT Corp. / ITT

LyondellBasell / LYB

Tyco International / TYC

W.R. Grace / GRA




Median mar et value $4.4 billion






Basic Materials51%

Technology17%

Consumer Cyclical

15%

Other16%



Bares Capital (Brian Bares) Brian Bares started his investment firm, Bares Capital Management, in 2000, focusing initially on micro-cap public companies. The firm launched a small-cap institutional strategy in 2001 and now manages assets in two value-oriented strategies. Bares Capital Management is quite unique in the institutional asset management world, as it has adhered to a disciplined business strategy, limiting the growth of assets under management to benefit investment performance. Bares is author of The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns.* MOI Signal Rank™ – Top Current Ideas of Bares Capital Management



1 Dolan Media / DM 246 8.04 -5% 2,388 92% 8% 6% 17x 9x n/m

2 Female Health / FHCO 117 4.20 -16% 3,142 37% 11% 4% 70x 22x 8.6x

3 INTL FCStone / INTL 410 22.49 -7% 2,534 10% 14% 17% 12x 9x 1.9x

4 Tandy Leather / TLF 48 4.76 -7% 1,647 0% 16% 2% n/a n/a 1.6x

5 Winmark / WINA 215 43.30 0% 849 0% 17% 11% n/a n/a 7.9x

6 Stamps.com / STMP 219 15.31 15% 1,013 0% 7% 5% 13x 12x 4.4x

7 Middleby / MIDD 1,317 70.26 -25% 62 >100% <1% 1% 15x 13x n/m

8 American Science / ASEI 567 61.50 -23% 66 new <1% 1% 18x 18x 2.1x

9 American Public Ed. / APEI 621 34.84 -22% 294 0% 2% 3% 18x 14x 5.9x

10 American Dental / ADPI 162 10.49 -19% 900 0% 6% 3% 10x 10x n/m

Top Holdings of Bares Capital Management – By Dollar Value



1 Interactive Intell. / ININ 545 28.93 -17% 2,431 -2% 13% 21% 22x 21x 6.2x


3 Winmark / WINA 215 43.30 0% 849 0% 17% 11% n/a n/a 7.9x

4 Dolan Media / DM 246 8.04 -5% 2,388 92% 8% 6% 17x 9x n/m

5 Stamps.com / STMP 219 15.31 15% 1,013 0% 7% 5% 13x 12x 4.4x

6 Female Health / FHCO 117 4.20 -16% 3,142 37% 11% 4% 70x 22x 8.6x

7 Hallmark Financial / HALL 126 6.52 -17% 1,925 0% 10% 4% n/m 28x .9x

8 American Public Ed. / APEI 621 34.84 -22% 294 0% 2% 3% 18x 14x 5.9x

9 American Dental / ADPI 162 10.49 -19% 900 0% 6% 3% 10x 10x n/m

10 Utah Medical / UTMD 96 26.45 1% 331 0% 9% 3% n/a n/a n/m


Alleghany / Y

American Science / ASEI

Central European / CEDC

Cover-All Tech / COVR

Kinder Morgan Mgmt / KMR

MakeMusic / MMUS

White Mountains / WTM

Travelzoo / TZOO

Portfolio Metrics ** Sector Weightings *



Median market value $825 million





* Email [email protected] to request a free copy of Brian’s book.

** Based on equity holdings disclosed in 13F-HR filings with the SEC. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Financial34%

Technology25%

Services20%

Other21%



Baupost (Seth Klarman) Seth Klarman, founder and president of The Baupost Group, is the author of Margin of Safety and one of the most widely respected value-oriented investors. Since inception in February 1983, The Baupost Group has delivered a compounded annual return of approximately 20%. MOI Signal Rank™ – Top Current Ideas of Baupost



1 BP / BP 121,987 38.46 -13% 5,500 new <1% 11% 6x 5x 1.5x

2 Microsoft / MSFT 201,497 24.05 -8% 12,000 new <1% 15% 8x 8x 4.6x

3 Syneron Medical / ELOS 324 9.30 -23% 3,836 >100% 11% 2% n/m 40x 1.4x

4 AVEO Pharma / AVEO 684 15.86 -23% 4,433 26% 10% 4% 32x n/m 2.6x

5 ViaSat / VSAT 1,329 31.54 -27% 10,051 0% 24% 16% 35x 20x 1.9x

6 Enzon Pharma / ENZN 385 7.91 -21% 9,001 0% 18% 4% n/a n/a 1.6x

7 News Corp. / NWSA 41,066 15.56 -12% 19,050 0% <1% 15% 12x 9x 6.6x

8 Alliance One / AOI 264 3.03 -6% 8,787 0% 10% 1% 8x n/a 1.0x

9 Sycamore Networks / SCMR 473 16.50 -26% 225 >100% <1% 0% n/m n/m 1.1x

10 Alere / ALR 1,995 23.20 -37% 3,100 0% 4% 4% 9x 8x n/m

Top Holdings of Baupost – By Dollar Value



1 ViaSat / VSAT 1,329 31.54 -27% 10,051 0% 24% 16% 35x 20x 1.9x

2 News Corp. / NWSA 41,066 15.56 -12% 19,050 0% <1% 15% 12x 9x 6.6x

3 Microsoft / MSFT 201,497 24.05 -8% 12,000 new <1% 15% 8x 8x 4.6x

4 Theravance / THRX 1,483 17.50 -21% 12,961 0% 15% 12% n/m n/m n/m

5 BP / BP 121,987 38.46 -13% 5,500 new <1% 11% 6x 5x 1.5x

6 Allied Nevada Gold / ANV 3,555 39.81 13% 3,378 38% 4% 7% 78x 22x 6.7x

7 Alere / ALR 1,995 23.20 -37% 3,100 0% 4% 4% 9x 8x n/m


9 AVEO Pharma / AVEO 684 15.86 -23% 4,433 26% 10% 4% 32x n/m 2.6x

10 CapitalSource / CSE 1,769 5.48 -15% 10,450 0% 3% 3% 34x 14x .9x


BP / BP

Central Pacific Fin. / CPF

Idenix Pharma / IDIX

Microsoft / MSFT

None

Portfolio Metrics * Sector Weightings *, **









** A predominant portion of assets managed by Seth Klarman may be invested in non-equity securities and is therefore not shown in the chart or tables.

Technology31%

Health Care27%

Services17%

Other25%



Berkshire Hathaway (Warren Buffett) Warren Buffett has built an unparalleled investment track record over several decades, becoming widely regarded as the best investor of all time. Buffett has embraced a long term-oriented investment approach with an emphasis on investing in companies with durable competitive advantage, high returns on capital employed, and shareholder-friendly management. MOI Signal Rank™ – Top Current Ideas of Berkshire Hathaway



1 USG / USG 757 7.19 -50% 17,072 0% 16% 0% n/m n/m 1.7x

2 Wells Fargo / WFC 123,337 23.36 -17% 352,328 3% 7% 17% 8x 7x 1.7x

3 Moody’s / MCO 6,184 27.04 -29% 27,415 0% 12% 2% 11x 10x n/m

4 Washington Post / WPO 2,685 338.51 -19% 1,728 0% 22% 1% 15x 20x 4.1x

5 American Express / AXP 53,087 44.47 -14% 151,611 0% 13% 14% 11x 11x 2.9x

6 Procter & Gamble / PG 167,504 60.96 -4% 76,766 0% 3% 10% 14x 13x n/m

7 Coca-Cola / KO 154,068 67.10 0% 200,000 0% 9% 28% 17x 16x >9.9x

8 U.S. Bancorp / USB 39,494 20.56 -19% 69,039 0% 4% 3% 9x 8x 2.2x

9 ConocoPhillips / COP 87,311 63.59 -15% 29,102 0% 2% 4% 8x 7x 1.3x


Top Holdings of Berkshire Hathaway – By Dollar Value



1 Coca-Cola / KO 154,068 67.10 0% 200,000 0% 9% 28% 17x 16x >9.9x

2 Wells Fargo / WFC 123,337 23.36 -17% 352,328 3% 7% 17% 8x 7x 1.7x

3 American Express / AXP 53,087 44.47 -14% 151,611 0% 13% 14% 11x 11x 2.9x

4 Procter & Gamble / PG 167,504 60.96 -4% 76,766 0% 3% 10% 14x 13x n/m

5 Kraft Foods / KFT 59,076 33.45 -5% 99,468 -5% 6% 7% 15x 13x n/m

6 Johnson & Johnson / JNJ 173,026 63.14 -5% 42,625 0% 2% 6% 13x 12x 6.3x

7 Wal-Mart / WMT 181,615 52.30 -2% 39,037 0% 1% 4% 12x 11x 3.9x

8 ConocoPhillips / COP 87,311 63.59 -15% 29,102 0% 2% 4% 8x 7x 1.3x

9 U.S. Bancorp / USB 39,494 20.56 -19% 69,039 0% 4% 3% 9x 8x 2.2x

10 Moody’s / MCO 6,184 27.04 -29% 27,415 0% 12% 2% 11x 10x n/m


Dollar General / DG None


Portfolio size $47 billion


Median market value $53 billion






** A large portion of Berkshire’s asset value may be attributed to holdings that are not publicly traded and are therefore not shown in the chart or tables.

Consumer Non-Cyclical

45%

Financial36%

Services8%

Other11%



Blue Ridge (John Griffin) John Griffin was a merchant banking analyst at Morgan Stanley before joining Robertson’s Tiger Management in 1987. Griffin became president of Tiger in 1993 but chose to start long/short partnership Blue Ridge in 1996.

MOI Signal Rank™ – Top Current Ideas of Blue Ridge



1 Valeant Pharma / VRX 11,699 39.66 -24% 9,800 10% 3% 7% n/a n/a n/m

2 Netflix / NFLX 10,781 205.21 -22% 1,115 11% 2% 4% 44x 30x n/m

3 Apple / AAPL 330,072 356.03 6% 1,200 23% <1% 8% 13x 11x 4.9x


5 Thermo Fisher / TMO 19,269 50.46 -22% 4,000 43% 1% 4% 12x 11x n/m

6 Level 3 Comms / LVLT 2,959 1.66 -32% 83,164 >100% 5% 3% n/m n/m n/m

7 Global Crossing / GLBC 1,620 26.44 -31% 2,035 new 3% 1% n/m n/m n/m

8 NRG Energy / NRG 5,158 21.38 -13% 8,650 22% 4% 4% 20x 21x 1.1x

9 United Continental / UAL 5,707 17.27 -24% 6,575 new 2% 2% 5x 3x n/m

10 SanDisk / SNDK 7,775 32.50 -22% 4,640 new 2% 3% 7x 7x 1.3x

Top Holdings of Blue Ridge – By Dollar Value



1 Apple / AAPL 330,072 356.03 6% 1,200 23% <1% 8% 13x 11x 4.9x

2 Valeant Pharma / VRX 11,699 39.66 -24% 9,800 10% 3% 7% n/a n/a n/m

3 Amazon.com / AMZN 81,223 178.93 -12% 1,942 -1% <1% 7% 89x 55x >9.9x

4 Range Resources / RRC 9,253 57.45 4% 4,727 -17% 3% 5% 55x 36x 4.1x


6 JPMorgan Chase / JPM 133,932 34.35 -16% 5,903 -25% <1% 4% 7x 6x 1.2x

7 Thermo Fisher / TMO 19,269 50.46 -22% 4,000 43% 1% 4% 12x 11x n/m

8 Dollar Tree / DLTR 7,916 64.88 -3% 2,880 -17% 2% 4% 17x 14x 5.6x

9 NRG Energy / NRG 5,158 21.38 -13% 8,650 22% 4% 4% 20x 21x 1.1x



AIG / AIG

Arcos Dorados / ARCO

Delta Air Lines / DAL

Dynegy / DYN

Global Crossing / GLBC

Google / GOOG

Monsanto / MON

priceline.com / PCLN

SanDisk / SNDK

United Continental / UAL

Yandex / YNDX

Youku / YOKU

Ares Capital / ARCC

Covanta / CVA

Crown Castle / CCI

Microsoft / MSFT

Sohu.com / SOHU

Theravance / THRX










Technology28%

Services26%

Financial16%

Other30%



BP Capital (Boone Pickens) Pickens, born in 1928, was a prominent corporate raider during the 1980s. He founded energy fund BP Capital in 1997.

MOI Signal Rank™ – Top Current Ideas of BP Capital



1 Weatherford / WFT 11,300 15.05 -20% 1,104 13% <1% 6% 17x 9x 2.4x

2 Chesapeake Energy / CHK 19,369 29.31 -1% 1,034 17% <1% 12% 10x 10x 1.6x

3 SandRidge Energy / SD 2,772 6.72 -37% 1,959 1% <1% 5% >99x 17x 2.3x

4 Nat.-Oilwell Varco / NOV 25,722 60.71 -22% 208 24% <1% 5% 14x 11x 3.8x

5 Hess / HES 18,452 54.29 -27% 154 new <1% 3% 8x 7x 1.1x

6 Schlumberger / SLB 98,666 73.12 -15% 136 new <1% 4% 19x 13x 7.6x

7 McMoRan Exploration / MMR 1,808 11.41 -38% 1,131 -3% <1% 5% n/m n/m 1.9x

8 Plains Exploration / PXP 3,954 28.04 -26% 585 -3% <1% 6% 15x 9x 1.3x

9 Approach Resources / AREX 476 16.73 -26% 99 -3% <1% 1% 23x 14x 1.4x

10 Murphy Oil / MUR 9,422 48.69 -26% 181 -3% <1% 3% 8x 7x 1.1x

Top Holdings of BP Capital – By Dollar Value



1 Chesapeake Energy / CHK 19,369 29.31 -1% 1,034 17% <1% 12% 10x 10x 1.6x

2 BP / BP 121,987 38.46 -13% 583 -4% <1% 9% 6x 5x 1.5x

3 Noble Corp. / NE 7,486 29.66 -25% 674 -3% <1% 8% 17x 8x 1.0x

4 EOG Resources / EOG 23,524 87.57 -16% 193 -3% <1% 7% 24x 16x 1.9x

5 Weatherford / WFT 11,300 15.05 -20% 1,104 13% <1% 6% 17x 9x 2.4x

6 Plains Exploration / PXP 3,954 28.04 -26% 585 -3% <1% 6% 15x 9x 1.3x

7 Apache / APA 38,643 97.03 -21% 149 -3% <1% 6% 8x 8x 1.6x

8 SandRidge Energy / SD 2,772 6.72 -37% 1,959 1% <1% 5% >99x 17x 2.3x

9 McMoRan Exploration / MMR 1,808 11.41 -38% 1,131 -3% <1% 5% n/m n/m 1.9x

10 Nat.-Oilwell Varco / NOV 25,722 60.71 -22% 208 24% <1% 5% 14x 11x 3.8x


Hess / HES

Schlumberger / SLB

A123 Systems / AONE

ABB / ABB

Devon Energy / DVN

Oceaneering / OII

Portfolio Metrics * Sector Weightings *, ** Portfolio size $257 million








** A large portion of assets managed by Boone Pickens may be invested outside of BP Capital and are therefore not shown in the chart or tables.

Energy100%

Basic Materials



Brave Warrior (Glenn Greenberg) Brave Warrior, formerly called Chieftain Capital Management, was founded in 1984 by Glenn Greenberg and John Shapiro. The firm runs a concentrated portfolio focused on companies with high returns on capital and sustainable competitive advantage. Brave Warrior’s long-term performance record is believed to feature mid teens annualized investment returns. MOI Signal Rank™ – Top Current Ideas of Brave Warrior



1 Valeant Pharma / VRX 11,699 39.66 -24% 3,534 >100% 1% 14% n/a n/a n/m

2 Google / GOOG 158,512 490.92 -3% 290 >100% <1% 14% 14x 12x 3.6x

3 Aon / AON 14,466 44.28 -14% 2,290 39% <1% 10% 13x 11x n/m

4 Arch Capital / ACGL 4,313 32.37 1% 1,597 98% 1% 5% 17x 12x 1.0x

5 Comcast / CMCSA 54,767 19.96 -21% 4,229 -5% <1% 9% 12x 10x n/m

6 Fiserv / FISV 7,279 51.42 -18% 2,551 0% 2% 13% 11x 10x n/m

7 Wiley John & Sons / JW.A 2,639 43.21 -17% 488 -1% <1% 2% 14x 13x n/m

8 U.S. Bancorp / USB 39,494 20.56 -19% 2,716 -8% <1% 6% 9x 8x 2.2x

9 Lab Corp. of America / LH 8,020 79.09 -18% 983 -11% <1% 8% 12x 11x n/m

10 Ryanair / RYAAY 6,505 25.99 -11% 2,382 -30% <1% 6% 12x 11x 1.6x

Top Holdings of Brave Warrior – By Dollar Value



1 Google / GOOG 158,512 490.92 -3% 290 >100% <1% 14% 14x 12x 3.6x

2 Valeant Pharma / VRX 11,699 39.66 -24% 3,534 >100% 1% 14% n/a n/a n/m

3 Fiserv / FISV 7,279 51.42 -18% 2,551 0% 2% 13% 11x 10x n/m

4 MasterCard / MA 38,139 300.16 0% 411 -13% <1% 12% 17x 14x >9.9x

5 Aon / AON 14,466 44.28 -14% 2,290 39% <1% 10% 13x 11x n/m

6 Comcast / CMCSA 54,767 19.96 -21% 4,229 -5% <1% 9% 12x 10x n/m

7 Lab Corp. of America / LH 8,020 79.09 -18% 983 -11% <1% 8% 12x 11x n/m

8 Ryanair / RYAAY 6,505 25.99 -11% 2,382 -30% <1% 6% 12x 11x 1.6x

9 U.S. Bancorp / USB 39,494 20.56 -19% 2,716 -8% <1% 6% 9x 8x 2.2x

10 Arch Capital / ACGL 4,313 32.37 1% 1,597 98% 1% 5% 17x 12x 1.0x


None Hewlett-Packard / HPQ

Broadridge Financial / BR










Financial34%

Technology28%

Health Care22%

Other17%



Breeden Capital (Richard Breeden) Richard C. Breeden, born in 1949, is a former Chairman of the U.S. Securities and Exchange Commission. Breeden founded Breeden Capital Management in 2006. The fund applies a concentrated, activist investment approach. MOI Signal Rank™ – Top Current Ideas of Breeden Capital



1 Steris / STE 1,696 28.61 -18% 5,067 0% 9% 16% 12x 11x 3.6x

2 H&R Block / HRB 4,053 13.26 -17% 13,292 0% 4% 20% 8x 8x >9.9x

3 RSC Holdings / RRR 704 6.78 -43% 4,429 >100% 4% 3% >99x 9x n/m

4 Airgas / ARG 4,507 59.59 -15% 1,076 54% 1% 7% 15x 13x >9.9x

5 Stanley Black Decker / SWK 9,448 56.12 -22% 601 13% <1% 4% 11x 9x n/m

6 Casey’s General / CASY 1,534 40.33 -8% 319 56% <1% 1% 13x 11x 4.9x

7 American Science / ASEI 567 61.50 -23% 35 new <1% 0% 18x 18x 2.1x

8 Whirlpool / WHR 4,314 56.47 -31% 418 0% <1% 3% 5x 6x 4.9x

9 EMCOR Group / EME 1,392 20.80 -29% 2,256 -4% 3% 5% 11x 9x 5.4x

10 Zale / ZLC 117 3.65 -35% 5,935 -24% 18% 2% n/m n/m .8x

Top Holdings of Breeden Capital – By Dollar Value



1 H&R Block / HRB 4,053 13.26 -17% 13,292 0% 4% 20% 8x 8x >9.9x

2 Steris / STE 1,696 28.61 -18% 5,067 0% 9% 16% 12x 11x 3.6x

3 Helmerich & Payne / HP 5,284 49.34 -25% 1,662 -20% 2% 9% 13x 10x 1.6x

4 Iron Mountain / IRM 6,043 30.09 -12% 2,388 -21% 1% 8% 24x 20x n/m

5 Aon / AON 14,466 44.28 -14% 1,552 -28% <1% 8% 13x 11x n/m

6 Dun & Bradstreet / DNB 3,066 62.32 -18% 1,037 -7% 2% 7% 10x 9x n/m

7 Airgas / ARG 4,507 59.59 -15% 1,076 54% 1% 7% 15x 13x >9.9x

8 Flowserve / FLS 4,512 80.96 -26% 693 -14% 1% 6% 10x 9x 4.0x

9 EMCOR Group / EME 1,392 20.80 -29% 2,256 -4% 3% 5% 11x 9x 5.4x

10 Stanley Black Decker / SWK 9,448 56.12 -22% 601 13% <1% 4% 11x 9x n/m


American Science / ASEI None










Services35%

Health Care16%

Financial15%

Other34%



Centaur Value (Zeke Ashton) Zeke Ashton is founder and managing partner of Centaur Capital, a Dallas-based investment firm. Centaur Capital serves as advisor to the Centaur family of private partnerships using a value-oriented long/short equity strategy. Centaur is also the sub-advisor to the Tilson Dividend Fund, a mutual fund utilizing an income-oriented value investing strategy.

MOI Signal Rank™ – Top Current Ideas of Centaur Value Fund 1, 2



1 Activision Blizzard / ATVI 12,194 10.67 -9% 490 new <1% 7% 14x 11x 4.6x

2 Xerox / XRX 10,273 7.32 -30% 400 new <1% 4% 7x 6x >9.9x

3 Dell / DELL 26,403 14.00 -16% 490 9% <1% 9% 7x 7x >9.9x

4 Cisco Systems / CSCO 82,943 15.08 -3% 580 23% <1% 12% 9x 8x 3.0x

5 GameStop / GME 3,051 21.57 -19% 175 0% <1% 5% 8x 7x 3.4x

6 Aspen Insurance / AHL 1,696 23.94 -7% 375 0% <1% 12% n/m 8x .5x

7 Biglari Holdings / BH 459 320.08 -18% 7 new <1% 3% 13x 11x 2.1x

8 Western Digital / WDC 6,159 26.41 -27% 125 0% <1% 4% 7x 6x 1.2x

9 Telular / WRLS 90 5.94 -4% 232 >100% 2% 2% 21x 15x 1.5x

10 Transatlantic Petro / TAT 383 1.05 -38% 871 13% <1% 1% n/m 26x 1.4x

1 Excludes holdings of Tilson Dividend Fund, which is also managed by Zeke Ashton. 2 Includes shares underlying LEAPs and other option positions.

Top Holdings of Centaur Value Fund – By Dollar Value 1, 2



1 Aspen Insurance / AHL 1,696 23.94 -7% 375 0% <1% 12% n/m 8x .5x

2 Cisco Systems / CSCO 82,943 15.08 -3% 580 23% <1% 12% 9x 8x 3.0x

3 Dell / DELL 26,403 14.00 -16% 490 9% <1% 9% 7x 7x >9.9x

4 Activision Blizzard / ATVI 12,194 10.67 -9% 490 new <1% 7% 14x 11x 4.6x

5 GameStop / GME 3,051 21.57 -19% 175 0% <1% 5% 8x 7x 3.4x

6 Terra Nova Royalty / TTT 455 7.27 -4% 470 0% <1% 5% n/a n/a .8x

7 Western Digital / WDC 6,159 26.41 -27% 125 0% <1% 4% 7x 6x 1.2x

8 Coinstar / CSTR 1,247 40.58 -26% 81 -38% <1% 4% 13x 11x 7.0x

9 Target / TGT 34,402 49.92 6% 65 0% <1% 4% 12x 11x 2.3x

10 Xerox / XRX 10,273 7.32 -30% 400 new <1% 4% 7x 6x >9.9x

1 Excludes holdings of Tilson Dividend Fund, which is also managed by Zeke Ashton. 2 Includes shares underlying LEAPs and other option positions.


Activision Blizzard / ATVI

Biglari Holdings / BH

InterDigital / IDCC

Xerox / XRX Best Buy / BBY

Foot Locker / FL

Lab Corp. of America / LH

Madison Sq. Garden / MSG

Microsoft / MSFT









* Based on equity holdings disclosed in 13F-HR filings with the SEC. Excludes portfolio cash, certain non-U.S. holdings, and non-equity securities.

Technology54%

Financial26%

Services12%

Other8%



Centerbridge (Jeffrey Aronson and Mark Gallogly) Centerbridge, founded in 2006, engages in private and public equity as well as distressed debt investing. Prior to founding Centerbridge, Jeffrey Aronson headed distressed debt investing at Angelo, Gordon & Co., while Mark Gallogly ran a telecom and media buyout fund at Blackstone Group. For additional background, see http://bit.ly/pSlbTF and http://bit.ly/qpJ26Z

MOI Signal Rank™ – Top Current Ideas of Centerbridge Partners



1 General Motors / GM 33,253 22.16 -27% 1,075 new <1% 4% 5x 5x n/m

2 CIT Group / CIT 6,129 30.55 -31% 9,397 51% 5% 46% 50x 25x .7x

3 Quad Graphics / QUAD 916 19.36 -50% 2,229 0% 5% 7% 7x 5x 2.7x

4 iStar Financial / SFI 637 5.94 -27% 3,956 0% 4% 4% n/m n/m .4x

5 BankUnited / BKU 1,936 19.91 -25% 10,768 0% 11% 35% 12x 13x 1.4x

6 Penn National Gaming / PENN 2,835 35.92 -11% 45 0% <1% 0% 18x 16x 8.4x

7 Royal Bank Scotland / RBS 20,317 6.81 -45% 2,572 -19% <1% 3% n/a n/a .2x

8 LyondellBasell / LYB 15,993 27.98 -27% 300 -86% <1% 1% n/a n/a 1.5x

Top Holdings of Centerbridge Partners – By Dollar Value



1 CIT Group / CIT 6,129 30.55 -31% 9,397 51% 5% 46% 50x 25x .7x


3 Quad Graphics / QUAD 916 19.36 -50% 2,229 0% 5% 7% 7x 5x 2.7x

4 General Motors / GM 33,253 22.16 -27% 1,075 new <1% 4% 5x 5x n/m

5 iStar Financial / SFI 637 5.94 -27% 3,956 0% 4% 4% n/m n/m .4x

6 Royal Bank Scotland / RBS 20,317 6.81 -45% 2,572 -19% <1% 3% n/a n/a .2x

7 LyondellBasell / LYB 15,993 27.98 -27% 300 -86% <1% 1% n/a n/a 1.5x

8 Penn National Gaming / PENN 2,835 35.92 -11% 45 0% <1% 0% 18x 16x 8.4x


General Motors / GM None










Financial84%

Services11%

Consumer Cyclical

4%

Other1%



Children’s Investment (Chris Hohn) Chris Hohn is the founder of London-based The Children’s Investment Fund Management. TCI runs a concentrated portfolio that has historically been heavily weighted in industrials. Hohn has acquired a reputation as an aggressive shareholder activist, most notably forcing the resignation of the CEO of Deutsche Boerse after he refused to abandon a proposed takeover of the London Stock Exchange. Hohn also agitated for a sale of ABN Amro, ultimately pushing it into the hands of RBS.

MOI Signal Rank™ – Top Current Ideas of Children’s Investment Fund



1 Union Pacific / UNP 41,824 85.69 -18% 2,703 new <1% 11% 13x 11x 2.3x

2 Oracle / ORCL 125,524 24.78 -25% 4,785 >100% <1% 6% 10x 9x >9.9x

3 Walt Disney / DIS 59,114 31.85 -18% 20,810 85% 1% 32% 13x 11x >9.9x

4 Kansas City Southern / KSU 5,052 46.00 -22% 421 new <1% 1% 16x 13x 2.1x

5 Viacom / VIA.B 23,948 40.87 -20% 10,460 0% 2% 21% 11x 10x n/m

6 McDonald’s / MCD 90,000 87.23 3% 489 new <1% 2% 17x 15x 7.4x

7 Royal Bank Scotland / RBS 20,317 6.81 -45% 1,301 0% <1% 0% n/a n/a .2x

8 CME Group / CME 15,858 237.17 -19% 18 new <1% 0% 14x 12x n/m

9 CBS / CBS 14,785 22.04 -23% 21,607 -20% 3% 23% 12x 10x n/m

10 UPS / UPS 60,515 61.70 -15% 685 -46% <1% 2% 14x 12x >9.9x

Top Holdings of Children’s Investment Fund – By Dollar Value



1 Walt Disney / DIS 59,114 31.85 -18% 20,810 85% 1% 32% 13x 11x >9.9x

2 CBS / CBS 14,785 22.04 -23% 21,607 -20% 3% 23% 12x 10x n/m

3 Viacom / VIA.B 23,948 40.87 -20% 10,460 0% 2% 21% 11x 10x n/m

4 Union Pacific / UNP 41,824 85.69 -18% 2,703 new <1% 11% 13x 11x 2.3x

5 Oracle / ORCL 125,524 24.78 -25% 4,785 >100% <1% 6% 10x 9x >9.9x

6 McDonald’s / MCD 90,000 87.23 3% 489 new <1% 2% 17x 15x 7.4x

7 UPS / UPS 60,515 61.70 -15% 685 -46% <1% 2% 14x 12x >9.9x

8 Kansas City Southern / KSU 5,052 46.00 -22% 421 new <1% 1% 16x 13x 2.1x

9 WellPoint / WLP 20,951 58.09 -26% 218 -93% <1% 1% 8x 8x 6.9x

10 Royal Bank Scotland / RBS 20,317 6.81 -45% 1,301 0% <1% 0% n/a n/a .2x


CME Group / CME

Union Pacific / UNP

Coca-Cola / KO

Molson Coors / TAP










Services79%

Transportation14%

Technology6%

Other1%



Chou Associates (Francis Chou) Francis Chou arrived in Canada from India in 1976. Over the years, he worked for Bell Canada, Gardiner Watson, and Fairfax Financial. The roots of Chou Associates date back to 1986. Today, Chou manages several investment funds and has been repeatedly ranked one of the top investment managers in Canada. He follows a deep value-oriented investment style.

MOI Signal Rank™ – Top Current Ideas of Chou Associates



1 JPMorgan Chase / JPM 133,932 34.35 -16% 781 new <1% 8% 7x 6x 1.2x

2 Berkshire Hathaway / BRK.A 169,347 102,600 -12% 0 58% <1% 9% 16x 13x 1.5x

3 Bank of America / BAC 70,806 6.97 -36% 4,400 5% <1% 9% n/m 5x .6x

4 AbitibiBowater / ABH 1,560 16.09 -21% 2,394 1% 2% 11% 8x 5x .4x

5 Watson Pharma / WPI 8,261 61.59 -10% 635 0% <1% 12% 14x 11x n/m

6 Sears Holdings / SHLD 5,618 52.55 -26% 394 18% <1% 6% n/m n/m 1.6x

7 Sprint Nextel / S 10,241 3.42 -37% 6,123 0% <1% 6% n/m n/m n/m

8 Overstock.com / OSTK 229 9.82 -35% 2,220 0% 10% 6% 82x 45x >9.9x

9 Goldman Sachs / GS 56,528 111.76 -16% 115 new <1% 4% 10x 7x .9x

10 RadioShack / RSH 1,164 11.67 -12% 1,000 new 1% 3% 7x 6x 1.5x

Top Holdings of Chou Associates – By Dollar Value



1 Watson Pharma / WPI 8,261 61.59 -10% 635 0% <1% 12% 14x 11x n/m




5 JPMorgan Chase / JPM 133,932 34.35 -16% 781 new <1% 8% 7x 6x 1.2x

6 Wells Fargo / WFC 123,337 23.36 -17% 998 0% <1% 7% 8x 7x 1.7x


8 Sprint Nextel / S 10,241 3.42 -37% 6,123 0% <1% 6% n/m n/m n/m


10 Sanofi-Aventis / SNY 91,851 34.09 -15% 410 0% <1% 4% 7x 7x n/m


Gap / GPS

Goldman Sachs / GS

JPMorgan Chase / JPM

RadioShack / RSH

None










** A large portion of assets managed by Francis Chou may be invested in Canadian and other securities, which are not shown in the chart or tables.

Financial41%

Services27%

Health Care20%

Other12%



Eagle Capital (Boykin Curry) Ravenel Boykin Curry IV manages New York-based Eagle Capital Management, which started as a family investment partnership and has grown to more than $5 billion in assets invested in equities. Curry has a long term-oriented investment approach and looks for out-of-favor companies that trade at a significant discount to intrinsic value.

MOI Signal Rank™ – Top Current Ideas of Eagle Capital Management



1 Liberty Global / LBTYA 10,304 36.64 -19% 13,344 8% 5% 6% 28x 20x n/m

2 Aon / AON 14,466 44.28 -14% 10,191 14% 3% 5% 13x 11x n/m

3 Microsoft / MSFT 201,497 24.05 -8% 19,182 14% <1% 5% 8x 8x 4.6x

4 Wal-Mart / WMT 181,615 52.30 -2% 8,829 18% <1% 5% 12x 11x 3.9x

5 Coca-Cola / KO 154,068 67.10 0% 7,506 16% <1% 6% 17x 16x >9.9x

6 3M / MMM 54,542 76.87 -19% 4,318 25% <1% 4% 12x 11x 6.8x

7 Ecolab / ECL 10,329 44.53 -21% 7,324 15% 3% 4% 18x 15x >9.9x

8 Comcast / CMCSA 54,767 19.96 -21% 21,376 1% <1% 5% 12x 10x n/m

9 PepsiCo / PEP 98,232 62.07 -12% 5,241 13% <1% 4% 14x 13x n/m

10 W.R. Berkley / WRB 4,037 28.81 -11% 10,009 13% 7% 3% 12x 11x 1.1x

Top Holdings of Eagle Capital Management – By Dollar Value



1 Coca-Cola / KO 154,068 67.10 0% 7,506 16% <1% 6% 17x 16x >9.9x


3 Wal-Mart / WMT 181,615 52.30 -2% 8,829 18% <1% 5% 12x 11x 3.9x


5 Aon / AON 14,466 44.28 -14% 10,191 14% 3% 5% 13x 11x n/m

6 Comcast / CMCSA 54,767 19.96 -21% 21,376 1% <1% 5% 12x 10x n/m

7 Praxair / PX 27,243 90.16 -17% 3,962 1% 1% 4% 16x 14x 6.6x

8 3M / MMM 54,542 76.87 -19% 4,318 25% <1% 4% 12x 11x 6.8x

9 Ecolab / ECL 10,329 44.53 -21% 7,324 15% 3% 4% 18x 15x >9.9x

10 PepsiCo / PEP 98,232 62.07 -12% 5,241 13% <1% 4% 14x 13x n/m


CNA Financial / CNA

Goldman Sachs / GS

Google / GOOG

Education Management / EDMC

L-3 Comms / LLL

Liberty Starz / LSTZA










Services28%

Financial21%


20%

Other31%



Eagle Value (Meryl Witmer) Meryl Witmer manages New York City-based Eagle Value Partners with her husband Chuck and participates in the annual Barron’s Roundtable. She is a value-oriented equity investor and runs a concentrated portfolio.

MOI Signal Rank™ – Top Current Ideas of Eagle Value



1 Macquarie Infrastructure / MIC 1,017 22.10 -20% 272 new <1% 11% 7x 7x n/m

2 Six Flags / SIX 1,692 30.98 -17% 289 100% <1% 17% n/m 56x n/m

3 Calpine / CPN 6,098 13.27 -18% 367 79% <1% 9% 60x 60x 1.4x

4 Rockwood Holdings / ROC 3,361 43.84 -21% 162 13% <1% 13% 11x 10x n/m

5 Innophos / IPHS 850 39.04 -20% 119 new <1% 9% 10x 9x 3.0x

6 Globe Specialty / GSM 1,279 17.00 -24% 291 0% <1% 9% 20x 12x 3.1x

7 Gentium / GENT 100 6.65 -33% 55 84% <1% 1% 10x 4x 4.7x

8 Collective Brands / PSS 585 9.51 -35% 205 0% <1% 4% 10x 7x 3.8x

9 Spansion / CODE 875 14.16 -27% 156 0% <1% 4% 6x 5x 3.4x

10 Packaging Corp. / PKG 2,313 22.77 -19% 194 0% <1% 8% 13x 10x 2.4x

Top Holdings of Eagle Value – By Dollar Value



1 Six Flags / SIX 1,692 30.98 -17% 289 100% <1% 17% n/m 56x n/m

2 Rockwood Holdings / ROC 3,361 43.84 -21% 162 13% <1% 13% 11x 10x n/m

3 Macquarie Infrastructure / MIC 1,017 22.10 -20% 272 new <1% 11% 7x 7x n/m

4 Globe Specialty / GSM 1,279 17.00 -24% 291 0% <1% 9% 20x 12x 3.1x

5 Calpine / CPN 6,098 13.27 -18% 367 79% <1% 9% 60x 60x 1.4x

6 Innophos / IPHS 850 39.04 -20% 119 new <1% 9% 10x 9x 3.0x

7 Packaging Corp. / PKG 2,313 22.77 -19% 194 0% <1% 8% 13x 10x 2.4x

8 Compass Minerals / CMP 2,377 72.25 -16% 33 0% <1% 4% 14x 12x 6.7x

9 Spansion / CODE 875 14.16 -27% 156 0% <1% 4% 6x 5x 3.4x

10 Collective Brands / PSS 585 9.51 -35% 205 0% <1% 4% 10x 7x 3.8x


Innophos / IPHS

Macquarie Infrastructure / MIC

Motorola Solutions / MSI

Sealed Air Corp. / SEE










Basic Materials55%

Services23%

Transportation12%

Other10%



Edinburgh Partners (Sandy Nairn) Sandy Nairn follows a value-oriented investment style. He developed his approach during a ten-year “apprenticeship” under famed investor Sir John Templeton.

MOI Signal Rank™ – Top Current Ideas of Edinburgh Partners



1 Petroleo Brasileiro / PBR 170,639 27.17 -20% 11,262 20% <1% 15% n/a n/a 1.2x

2 D.R. Horton / DHI 2,828 8.95 -22% 22,726 13% 7% 10% 33x 15x 1.1x

3 Intel / INTC 100,767 19.19 -13% 13,752 11% <1% 13% 8x 8x 3.1x

4 Applied Materials / AMAT 14,264 10.82 -17% 15,198 new 1% 8% 8x 8x 2.2x

5 Cisco Systems / CSCO 82,943 15.08 -3% 19,682 19% <1% 14% 9x 8x 3.0x


7 SK Telecom / SKM 11,252 15.71 -16% 12,231 14% 2% 9% 8x 8x 3.4x

8 Microsoft / MSFT 201,497 24.05 -8% 1,673 >100% <1% 2% 8x 8x 4.6x

9 Hovnanian / HOV 125 1.57 -35% 54 new <1% 0% n/m n/m n/m

10 Symantec / SYMC 11,561 15.42 -22% 10,463 -7% 1% 8% 9x 8x n/m

Top Holdings of Edinburgh Partners – By Dollar Value



1 Petroleo Brasileiro / PBR 170,639 27.17 -20% 11,262 20% <1% 15% n/a n/a 1.2x


3 Intel / INTC 100,767 19.19 -13% 13,752 11% <1% 13% 8x 8x 3.1x

4 Zimmer Holdings / ZMH 9,710 50.98 -19% 4,358 -7% 2% 11% 11x 10x 3.9x

5 D.R. Horton / DHI 2,828 8.95 -22% 22,726 13% 7% 10% 33x 15x 1.1x


7 Applied Materials / AMAT 14,264 10.82 -17% 15,198 new 1% 8% 8x 8x 2.2x

8 Symantec / SYMC 11,561 15.42 -22% 10,463 -7% 1% 8% 9x 8x n/m


10 General Dynamics / GD 20,791 57.47 -23% 1,648 -41% <1% 5% 8x 8x n/m


Applied Materials / AMAT

Hovnanian / HOV

AMR Corp. / AMR

Fidelity National / FNF

Goodyear Tire / GT

Supervalu / SVU

Time Warner Cable / TWC










Technology44%

Energy15%

Capital Goods14%

Other27%



ESL Investments (Eddie Lampert) Eddie Lampert, founder and managing member of ESL Investments, is a value investor who started out working under Bob Rubin at the arbitrage desk of Goldman Sachs. When he left Goldman to start ESL in 1988, he received the support of Texas investor Richard Rainwater. Lampert compounded ESL’s capital at rates of more than 25% per annum for many years. His largest investment was the much-publicized taking control of Kmart during Kmart’s bankruptcy process in 2002. Lampert engineered the merger of Kmart and Sears in 2004. He is currently chairman and chief capital allocator of the combined firm, Sears Holdings (SHLD). He also still manages his investment partnership, which holds a concentrated investment portfolio. MOI Signal Rank™ – Top Current Ideas of ESL Investments



1 Gap / GPS 8,636 15.69 -13% 30,360 12% 6% 5% 11x 9x >9.9x

2 Wells Fargo / WFC 123,337 23.36 -17% 4,628 new <1% 1% 8x 7x 1.7x

3 Sears Holdings / SHLD 5,618 52.55 -26% 48,180 0% 45% 29% n/m n/m 1.6x

4 AutoNation / AN 5,207 35.72 -2% 62,227 0% 43% 25% 19x 17x 7.2x

5 CIT Group / CIT 6,129 30.55 -31% 5,370 30% 3% 2% 50x 25x .7x

6 Genworth Financial / GNW 3,067 6.25 -39% 10,863 0% 2% 1% 13x 4x .2x


8 Seagate Technology / STX 4,229 10.08 -38% 7,204 -9% 2% 1% 6x 4x 1.7x

9 Capital One / COF 18,972 41.30 -20% 6,254 -15% 1% 3% 6x 7x 1.3x

10 Big Lots / BIG 2,262 30.09 -9% 1,300 0% 2% 0% 10x 9x 2.2x

Top Holdings of ESL Investments – By Dollar Value



1 AutoZone / AZO 12,112 291.42 -1% 9,459 -11% 23% 31% 15x 13x n/m


3 AutoNation / AN 5,207 35.72 -2% 62,227 0% 43% 25% 19x 17x 7.2x

4 Gap / GPS 8,636 15.69 -13% 30,360 12% 6% 5% 11x 9x >9.9x

5 Capital One / COF 18,972 41.30 -20% 6,254 -15% 1% 3% 6x 7x 1.3x

6 CIT Group / CIT 6,129 30.55 -31% 5,370 30% 3% 2% 50x 25x .7x



9 Seagate Technology / STX 4,229 10.08 -38% 7,204 -9% 2% 1% 6x 4x 1.7x

10 Genworth Financial / GNW 3,067 6.25 -39% 10,863 0% 2% 1% 13x 4x .2x


Wells Fargo / WFC None










Services91%

Financial7%

Technology2%



Fairfax (Prem Watsa) Prem Watsa is the founder, chairman and CEO of Fairfax (Toronto: FFH), a Canadian property/casualty insurance and reinsurance firm. While managing Fairfax’s investment portfolio over the past couple of decades, Watsa has built a reputation as an astute value investor. Some have called him “Warren Buffett of Canada.”

MOI Signal Rank™ – Top Current Ideas of Fairfax



1 Research In Motion / RIMM 13,994 26.69 -7% 8,373 >100% 2% 10% n/a n/a 2.0x



4 Dell / DELL 26,403 14.00 -16% 22,693 0% 1% 14% 7x 7x >9.9x

5 Johnson & Johnson / JNJ 173,026 63.14 -5% 5,184 0% <1% 15% 13x 12x 6.3x

6 USG / USG 757 7.19 -50% 6,794 0% 6% 2% n/m n/m 1.7x

7 SandRidge Energy / SD 2,772 6.72 -37% 21,308 0% 5% 7% >99x 17x 2.3x

8 U.S. Bancorp / USB 39,494 20.56 -19% 4,448 0% <1% 4% 9x 8x 2.2x

9 Wells Fargo / WFC 123,337 23.36 -17% 4,512 0% <1% 5% 8x 7x 1.7x

10 Frontier Comms / FTR 6,937 6.97 -14% 18,620 0% 2% 6% 27x 22x n/m

Top Holdings of Fairfax – By Dollar Value



1 Johnson & Johnson / JNJ 173,026 63.14 -5% 5,184 0% <1% 15% 13x 12x 6.3x

2 Dell / DELL 26,403 14.00 -16% 22,693 0% 1% 14% 7x 7x >9.9x


4 Level 3 Comms / LVLT 2,959 1.66 -32% 138,376 -1% 8% 10% n/m n/m n/m

5 Research In Motion / RIMM 13,994 26.69 -7% 8,373 >100% 2% 10% n/a n/a 2.0x

6 Kraft Foods / KFT 59,076 33.45 -5% 5,366 0% <1% 8% 15x 13x n/m

7 SandRidge Energy / SD 2,772 6.72 -37% 21,308 0% 5% 7% >99x 17x 2.3x

8 Frontier Comms / FTR 6,937 6.97 -14% 18,620 0% 2% 6% 27x 22x n/m


10 U.S. Bancorp / USB 39,494 20.56 -19% 4,448 0% <1% 4% 9x 8x 2.2x


CNinsure / CISG Kennedy-Wilson / KW New York Times / NYT

Intel / INTC Stewart Enterprises / STEI










** A large portion of Fairfax’s asset value may be attributed to holdings that are not publicly traded and are therefore not shown in the chart or tables.

Technology25%

Services19%Health Care

15%

Other41%



Fairholme (Bruce Berkowitz) Bruce Berkowitz, manager of The Fairholme Fund, has been one of the most successful value-oriented investors of the past decade. From inception on December 29, 1999 through December 31, 2009, The Fairholme Fund delivered a cumulative return, net of expenses, of 253%, versus a return of -9%, before expenses, for the S&P 500 Index. This translates into annualized performance of 13.4% and -0.9% for The Fairholme Fund and the S&P 500 Index, respectively. MOI Signal Rank™ – Top Current Ideas of Fairholme



1 AIG / AIG 42,059 22.16 -24% 127,228 87% 7% 28% 6x 7x .5x

2 Citigroup / C 78,114 26.77 -36% 26,388 2% <1% 7% 7x 5x .6x

3 MBIA / MBI 1,246 6.33 -27% 46,832 14% 24% 3% n/m 5x .7x




7 Assured Guaranty / AGO 2,119 11.50 -29% 1,452 new <1% 0% 3x 4x .5x

8 Jefferies / JEF 2,931 14.50 -29% 4,124 new 2% 1% 10x 8x 1.0x

9 Regions Financial / RF 4,859 3.86 -38% 123,889 0% 10% 5% 28x 6x .7x

10 CIT Group / CIT 6,129 30.55 -31% 19,413 -2% 10% 6% 50x 25x .7x

Top Holdings of Fairholme – By Dollar Value



1 AIG / AIG 42,059 22.16 -24% 127,228 87% 7% 28% 6x 7x .5x

2 Berkshire Hathaway / BRK.A 169,347 102,600.00 -12% 10 11% <1% 10% 16x 13x 1.5x


4 Brookfield Asset / BAM 34,345 28.29 -15% 27,270 -1% 2% 8% n/a n/a 3.8x

5 Citigroup / C 78,114 26.77 -36% 26,388 2% <1% 7% 7x 5x .6x


7 Goldman Sachs / GS 56,528 111.76 -16% 6,002 -10% 1% 7% 10x 7x .9x

8 CIT Group / CIT 6,129 30.55 -31% 19,413 -2% 10% 6% 50x 25x .7x

9 Leucadia National / LUK 6,364 26.02 -24% 18,716 -1% 8% 5% n/a n/a .9x

10 Regions Financial / RF 4,859 3.86 -38% 123,889 0% 10% 5% 28x 6x .7x


Assured Guaranty / AGO

Jefferies / JEF

AstraZeneca / AZN

AT&T / T

Banco Santander / STD

Bristol Myers Squibb / BMY

Cisco Systems / CSCO

GlaxoSmithKline / GSK

Royal Dutch Shell / RDS.A

Spirit AeroSystems / SPR

Telefonica / TEF

Verizon / VZ










Financial75%

Services20%

Conglomerates5%



Force Capital (Robert Jaffe) Robert Jaffe founded Force Capital Management in 2002 after eight years at Steve Cohen’s SAC Capital.

MOI Signal Rank™ – Top Current Ideas of Force Capital Management



1 Sears Holdings / SHLD 5,618 52.55 -26% 898 >100% <1% 13% n/m n/m 1.6x


3 Copart / CPRT 2,682 38.98 -16% 737 47% 1% 8% 18x 15x 6.2x

4 Shutterfly / SFLY 1,435 41.53 -28% 525 16% 2% 6% 92x 41x >9.9x

5 AutoNation / AN 5,207 35.72 -2% 718 22% <1% 7% 19x 17x 7.2x

6 Iron Mountain / IRM 6,043 30.09 -12% 685 >100% <1% 6% 24x 20x n/m

7 Charter Comms / CHTR 5,126 46.59 -14% 364 91% <1% 5% n/m 21x n/m

8 SL Green Realty / SLG 5,621 65.77 -21% 318 48% <1% 6% 40x 82x 1.1x

9 First Indust. Realty / FR 711 8.21 -28% 2,339 27% 3% 5% n/m n/m .7x

10 iStar Financial / SFI 637 5.94 -27% 1,722 >100% 2% 3% n/m n/m .4x

Top Holdings of Force Capital Management – By Dollar Value



1 Sears Holdings / SHLD 5,618 52.55 -26% 898 >100% <1% 13% n/m n/m 1.6x

2 Copart / CPRT 2,682 38.98 -16% 737 47% 1% 8% 18x 15x 6.2x

3 AutoNation / AN 5,207 35.72 -2% 718 22% <1% 7% 19x 17x 7.2x


5 Shutterfly / SFLY 1,435 41.53 -28% 525 16% 2% 6% 92x 41x >9.9x

6 SL Green Realty / SLG 5,621 65.77 -21% 318 48% <1% 6% 40x 82x 1.1x

7 Iron Mountain / IRM 6,043 30.09 -12% 685 >100% <1% 6% 24x 20x n/m

8 First Indust. Realty / FR 711 8.21 -28% 2,339 27% 3% 5% n/m n/m .7x

9 Charter Comms / CHTR 5,126 46.59 -14% 364 91% <1% 5% n/m 21x n/m

10 Gap / GPS 8,636 15.69 -13% 1,007 -26% <1% 4% 11x 9x >9.9x


Cracker Barrel / CBRL

MGIC Investment / MTG

BankUnited / BKU

Coherent / COHR

TechTarget / TTGT

TravelCenters / TA










Services75%

Financial8%

Consumer Cyclical

6%

Other11%



Gates Capital (Jeff Gates) Jeff Gates has 25+ years of experience identifying undervalued securities. He started the ECF Value Fund in 1996 after spending 10+ years in high yield bond research and sales, including as a director at Schroder & Co. MOI Signal Rank™ – Top Current Ideas of Gates Capital



1 Ashland / ASH 3,705 47.49 -27% 970 >100% 1% 8% 13x 9x 2.8x

2 Solutia / SOA 1,832 14.98 -34% 3,410 24% 3% 8% 7x 6x n/m

3 W.R. Grace / GRA 2,592 35.17 -23% 1,185 16% 2% 7% 9x 9x n/m

4 Copart / CPRT 2,682 38.98 -16% 1,194 9% 2% 8% 18x 15x 6.2x

5 Blount International / BLT 721 14.79 -15% 3,461 7% 7% 8% 12x 11x n/m

6 Quanex Building / NX 405 10.70 -35% 2,319 60% 6% 4% 19x 12x 1.5x

7 Snap-on / SNA 2,672 45.92 -27% 885 23% 2% 7% 11x 9x 4.9x

8 Interval Leisure / IILG 650 11.29 -18% 2,929 32% 5% 5% 19x 15x n/m

9 Masco / MAS 2,706 7.56 -37% 2,873 71% <1% 4% 84x 19x n/m

10 Darling / DAR 1,693 14.46 -18% 2,084 5% 2% 5% 9x 8x >9.9x

Top Holdings of Gates Capital – By Dollar Value



1 Blount International / BLT 721 14.79 -15% 3,461 7% 7% 8% 12x 11x n/m

2 Solutia / SOA 1,832 14.98 -34% 3,410 24% 3% 8% 7x 6x n/m

3 Copart / CPRT 2,682 38.98 -16% 1,194 9% 2% 8% 18x 15x 6.2x

4 Ashland / ASH 3,705 47.49 -27% 970 >100% 1% 8% 13x 9x 2.8x

5 W.R. Grace / GRA 2,592 35.17 -23% 1,185 16% 2% 7% 9x 9x n/m

6 Snap-on / SNA 2,672 45.92 -27% 885 23% 2% 7% 11x 9x 4.9x

7 Interval Leisure / IILG 650 11.29 -18% 2,929 32% 5% 5% 19x 15x n/m

8 Bed Bath & Beyond / BBBY 12,623 50.64 -13% 647 4% <1% 5% 14x 12x 3.2x

9 Darling / DAR 1,693 14.46 -18% 2,084 5% 2% 5% 9x 8x >9.9x

10 McGraw-Hill / MHP 11,148 37.00 -12% 808 7% <1% 5% 13x 12x n/m


None Gap / GPS

Lorillard / LO










Services29%

Basic Materials25%

Capital Goods12%

Other33%



Glenview (Larry Robbins) Larry Robbins founded Glenview after working for buyout specialist Leon Cooperman’s Omega Advisors. Robbins’ hedge fund utilizes various value-oriented investment strategies in order to generate absolute returns.

MOI Signal Rank™ – Top Current Ideas of Glenview Capital



1 AIG / AIG 42,059 22.16 -24% 9,754 new <1% 4% 6x 7x .5x

2 Crown Castle / CCI 11,470 40.05 -2% 5,949 new 2% 4% 85x 50x n/m

3 Life Technologies / LIFE 6,468 35.84 -31% 12,762 42% 7% 7% 10x 9x n/m

4 Citigroup / C 78,114 26.77 -36% 14,233 11% <1% 6% 7x 5x .6x

5 Meritor / MTOR 690 7.30 -54% 7,484 39% 8% 1% 12x 4x n/m

6 Flextronics / FLEX 3,767 5.15 -20% 40,305 46% 6% 3% 6x 5x 1.9x

7 Textron / TXT 4,218 15.21 -36% 1,608 100% <1% 0% 13x 9x 2.8x

8 MetLife / MET 32,920 31.13 -29% 1,400 100% <1% 1% 6x 5x .8x

9 Lincare / LNCR 1,952 20.89 -29% 3,096 84% 3% 1% 11x 9x n/m

10 Corning / GLW 22,499 14.32 -21% 5,081 >100% <1% 1% 7x 7x 1.1x

Top Holdings of Glenview Capital – By Dollar Value



1 Life Technologies / LIFE 6,468 35.84 -31% 12,762 42% 7% 7% 10x 9x n/m

2 McKesson / MCK 18,190 73.85 -12% 5,432 -9% 2% 7% 12x 11x >9.9x

3 Citigroup / C 78,114 26.77 -36% 14,233 11% <1% 6% 7x 5x .6x

4 Crown Castle / CCI 11,470 40.05 -2% 5,949 new 2% 4% 85x 50x n/m

5 AIG / AIG 42,059 22.16 -24% 9,754 new <1% 4% 6x 7x .5x

6 Flextronics / FLEX 3,767 5.15 -20% 40,305 46% 6% 3% 6x 5x 1.9x

7 Fidelity National / FIS 8,158 26.66 -13% 7,733 -9% 3% 3% 12x 10x n/m

8 Thermo Fisher / TMO 19,269 50.46 -22% 4,073 -5% 1% 3% 12x 11x n/m

9 Aon / AON 14,466 44.28 -14% 4,339 -6% 1% 3% 13x 11x n/m

10 Expedia / EXPE 7,276 26.53 -8% 7,178 1% 3% 3% 14x 12x n/m


AIG / AIG American Tower / AMT Apple / AAPL Bank of America / BAC Chimera Investment / CIM Comcast / CMCSA Computer Sciences / CSC

Crown Castle / CCI General Motors / GM Lowe’s / LOW R.R. Donnelley / RRD Royal Bank Scotland / RBS Sprint Nextel / S Tellabs / TLAB

Amdocs / DOX AmerisourceBergen / ABC CVS Caremark / CVS DaVita / DVA Discover Financial / DFS DSW / DSW JPMorgan Chase / JPM

Lab Corp. of America / LH Medco Health / MHS Pfizer / PFE RadioShack / RSH










Financial29%

Services22%

Technology20%

Other30%



GoldenTree (Steve Tananbaum) Steve Tananbaum founded GoldenTree Asset Management in 2000. Prior to starting GoldenTree, Tananbaum spent more than ten years at MacKay Shields, including as lead portfolio manager of the firm’s hedge fund area. Prior to MacKay Shields, Tananbaum worked on high yield and M&A transactions in the corporate finance department of Kidder, Peabody.

MOI Signal Rank™ – Top Current Ideas of GoldenTree Asset Management



1 TRW Automotive / TRW 4,381 35.41 -40% 540 new <1% 8% 5x 5x 6.7x

2 Popular / BPOP 2,038 1.99 -28% 7,926 70% <1% 7% 8x 6x .6x

3 Gannett / GCI 2,420 10.05 -30% 4,467 63% 2% 20% 5x 4x n/m

4 Rowan Companies / RDC 4,074 31.97 -18% 444 62% <1% 6% 17x 9x 1.0x

5 Rock-Tenn / RKT 3,315 46.55 -30% 299 new <1% 6% 9x 7x 3.9x

6 American Capital / ACAS 2,742 7.75 -22% 1,702 new <1% 6% 9x 9x .6x

7 CONSOL Energy / CNX 9,458 41.71 -14% 257 new <1% 5% 14x 10x 2.9x

8 Whiting Petroleum / WLL 5,167 44.02 -23% 311 10% <1% 6% 11x 9x 1.9x

9 Tenet Healthcare / THC 2,537 4.65 -25% 1,872 new <1% 4% 11x 9x 8.3x

10 LifePoint Hospitals / LPNT 1,677 32.24 -18% 336 11% <1% 5% 10x 9x 4.8x

Top Holdings of GoldenTree Asset Management – By Dollar Value



1 Gannett / GCI 2,420 10.05 -30% 4,467 63% 2% 20% 5x 4x n/m

2 Charter Comms / CHTR 5,126 46.59 -14% 417 -25% <1% 9% n/m 21x n/m

3 TRW Automotive / TRW 4,381 35.41 -40% 540 new <1% 8% 5x 5x 6.7x

4 Popular / BPOP 2,038 1.99 -28% 7,926 70% <1% 7% 8x 6x .6x

5 Rowan Companies / RDC 4,074 31.97 -18% 444 62% <1% 6% 17x 9x 1.0x

6 Rock-Tenn / RKT 3,315 46.55 -30% 299 new <1% 6% 9x 7x 3.9x

7 Whiting Petroleum / WLL 5,167 44.02 -23% 311 10% <1% 6% 11x 9x 1.9x

8 American Capital / ACAS 2,742 7.75 -22% 1,702 new <1% 6% 9x 9x .6x

9 LifePoint Hospitals / LPNT 1,677 32.24 -18% 336 11% <1% 5% 10x 9x 4.8x

10 CONSOL Energy / CNX 9,458 41.71 -14% 257 new <1% 5% 14x 10x 2.9x


American Capital / ACAS

Booz Allen Hamilton / BAH

CONSOL Energy / CNX

Rock-Tenn / RKT

Tenet Healthcare / THC

TRW Automotive / TRW

Virgin Media / VMED

Avnet / AVT

Capital One / COF

Chemtura / CHMT

Dana Holding / DAN

Dillard’s / DDS

Doral Financial / DRL

KKR & Co. / KKR

Packaging Corp. / PKG










Services43%

Energy17%

Financial13%

Other27%



Greenhaven (Ed Wachenheim) Ed Wachenheim manages a $3+ billion value hedge fund with a long term-oriented, concentrated investment approach.

MOI Signal Rank™ – Top Current Ideas of Greenhaven Associates



1 Air Products & Chem / APD 16,036 75.24 -21% 3,300 16% 2% 9% 13x 12x 3.2x

2 FedEx / FDX 23,207 73.16 -23% 4,065 2% 1% 11% 11x 9x 1.8x

3 3M / MMM 54,542 76.87 -19% 3,673 1% <1% 11% 12x 11x 6.8x

4 Lowe’s / LOW 25,143 19.31 -17% 6,212 new <1% 4% 12x 11x 1.5x

5 Becton Dickinson / BDX 16,726 76.92 -11% 3,347 1% 2% 10% 14x 12x 4.8x

6 IBM / IBM 188,147 157.54 -8% 1,683 3% <1% 10% 12x 11x n/m

7 UPS / UPS 60,515 61.70 -15% 3,324 67% <1% 8% 14x 12x >9.9x

8 Whirlpool / WHR 4,314 56.47 -31% 763 new <1% 2% 5x 6x 4.9x

9 Rockwell Collins / COL 6,953 45.25 -27% 2,235 1% 1% 4% 11x 10x >9.9x

10 Equitable Resources / EQT 7,805 52.22 -1% 3,208 21% 2% 6% 24x 18x 2.4x

Top Holdings of Greenhaven Associates – By Dollar Value



1 FedEx / FDX 23,207 73.16 -23% 4,065 2% 1% 11% 11x 9x 1.8x

2 3M / MMM 54,542 76.87 -19% 3,673 1% <1% 11% 12x 11x 6.8x

3 IBM / IBM 188,147 157.54 -8% 1,683 3% <1% 10% 12x 11x n/m


5 Air Products & Chem / APD 16,036 75.24 -21% 3,300 16% 2% 9% 13x 12x 3.2x

6 Devon Energy / DVN 26,469 63.55 -19% 3,845 -2% <1% 9% 10x 8x 1.7x

7 UPS / UPS 60,515 61.70 -15% 3,324 67% <1% 8% 14x 12x >9.9x

8 Equitable Resources / EQT 7,805 52.22 -1% 3,208 21% 2% 6% 24x 18x 2.4x

9 Lowe’s / LOW 25,143 19.31 -17% 6,212 new <1% 4% 12x 11x 1.5x

10 Rockwell Collins / COL 6,953 45.25 -27% 2,235 1% 1% 4% 11x 10x >9.9x


Lowe’s / LOW

Whirlpool / WHR

Pall Corp. / PLL










Transportation21%

Technology19%

Energy14%

Other47%



Greenlight (David Einhorn) David Einhorn is the founder of Greenlight Capital, a value-oriented, research-driven investment firm with a market-beating long-term track record. Since inception in May 1996, Greenlight has reported a compounded annual return, net of fees and expenses, of approximately 20%. David is author of Fooling Some of the People All of the Time. MOI Signal Rank™ – Top Current Ideas of Greenlight




2 BioFuel Energy / BIOF 37 0.30 -27% 27,169 22% 22% 0% n/a n/a .4x

3 State Bank Financial / STBZ 449 14.19 -13% 2,100 new 7% 1% 13x 11x 1.2x

4 Apple / AAPL 330,072 356.03 6% 1,078 29% <1% 10% 13x 11x 4.9x

5 Travelers / TRV 20,711 49.46 -15% 4,198 0% 1% 6% 12x 8x 1.0x

6 Einstein Noah / BAGL 223 13.30 -11% 10,733 0% 64% 4% 17x 14x >9.9x

7 Aeropostale / ARO 865 10.71 -39% 3,434 new 4% 1% 10x 8x 2.4x

8 Seagate Technology / STX 4,229 10.08 -38% 11,505 >100% 3% 3% 6x 4x 1.7x

9 Best Buy / BBY 8,996 24.06 -23% 6,888 15% 2% 5% 7x 6x 2.6x

10 Republic Airways / RJET 157 3.26 -40% 3,413 0% 7% 0% n/m 5x .4x

Top Holdings of Greenlight – By Dollar Value



1 Pfizer / PFE 137,864 17.67 -14% 23,454 -6% <1% 11% 8x 8x n/m

2 Apple / AAPL 330,072 356.03 6% 1,078 29% <1% 10% 13x 11x 4.9x


4 CareFusion / CFN 5,335 23.86 -12% 9,525 -5% 4% 6% 13x 12x 4.3x

5 Travelers / TRV 20,711 49.46 -15% 4,198 0% 1% 6% 12x 8x 1.0x

6 Sprint Nextel / S 10,241 3.42 -37% 55,900 0% 2% 5% n/m n/m n/m


8 Ensco / ESV 9,755 42.32 -21% 4,224 -4% 2% 5% 12x 7x 1.3x

9 Best Buy / BBY 8,996 24.06 -23% 6,888 15% 2% 5% 7x 6x 2.6x

10 NCR / NCR 2,408 15.31 -19% 9,415 -8% 6% 4% 9x 8x 2.9x


Aeropostale / ARO

Huntington Ingalls / HII

Marathon Oil / MRO

State Bank Financial / STBZ

Cardinal Health / CAH

CIT Group / CIT

M.D.C. Holdings / MDC

MI Developments / MIM

Transatlantic / TRH

Xerox / XRX

Yahoo! / YHOO










Technology29%

Health Care24%

Services19%

Other28%



H Partners (Rehan Jaffer) Rehan Jaffer honed his investment approach at Dan Loeb’s activist hedge fund Third Point. He joined River Run Partners in 2004 and started H Partners shortly thereafter. Loeb was quoted in the book Hedge Hunters as saying the following about Jaffer: “He is super-hungry. He’s got a good nose. He’s very intelligent. So he’s got a great combination of having a high IQ, really strong financial analytics, a great nose for value, and great trader sense.”

MOI Signal Rank™ – Top Current Ideas of H Partners



1 Sealy Corp. / ZZ 168 1.71 -32% 14,616 >100% 15% 4% 17x 12x n/m

2 Foster Wheeler / FWLT 2,553 21.20 -30% 976 26% <1% 4% 13x 10x 3.1x


4 W.R. Grace / GRA 2,592 35.17 -23% 1,430 14% 2% 9% 9x 9x n/m

5 Cumulus Media / CMLS 145 2.76 -21% 677 new 1% 0% n/a n/a n/m

6 Boyd Gaming / BYD 462 5.35 -39% 3,800 7% 4% 4% n/m 25x 1.0x

7 Pulte Homes / PHM 1,497 3.91 -49% 1,150 0% <1% 1% n/m 15x .9x

8 NASDAQ OMX / NDAQ 3,754 21.20 -16% 725 0% <1% 3% 9x 8x n/m

9 Six Flags / SIX 1,692 30.98 -17% 12,833 -4% 24% 70% n/m 56x n/m


Top Holdings of H Partners – By Dollar Value



1 Six Flags / SIX 1,692 30.98 -17% 12,833 -4% 24% 70% n/m 56x n/m

2 W.R. Grace / GRA 2,592 35.17 -23% 1,430 14% 2% 9% 9x 9x n/m


4 Sealy Corp. / ZZ 168 1.71 -32% 14,616 >100% 15% 4% 17x 12x n/m

5 Foster Wheeler / FWLT 2,553 21.20 -30% 976 26% <1% 4% 13x 10x 3.1x

6 Boyd Gaming / BYD 462 5.35 -39% 3,800 7% 4% 4% n/m 25x 1.0x

7 NASDAQ OMX / NDAQ 3,754 21.20 -16% 725 0% <1% 3% 9x 8x n/m

8 Pulte Homes / PHM 1,497 3.91 -49% 1,150 0% <1% 1% n/m 15x .9x

9 Cumulus Media / CMLS 145 2.76 -21% 677 new 1% 0% n/a n/a n/m



Cumulus Media / CMLS CF Industries / CF










Services80%

Basic Materials9%

Capital Goods4%

Other7%



Harbinger (Phil Falcone) Phil Falcone founded Harbinger Capital Partners in 2001 in order to capitalize on distressed investment opportunities. The firm has since expanded into special situation investments and other value-oriented investment strategies.

MOI Signal Rank™ – Top Current Ideas of Harbinger Capital



1 N.A. Energy Partners / NOA 196 5.10 -33% 3,600 new 9% 1% n/a n/a 1.8x

2 Owens Corning / OC 3,075 24.91 -33% 475 new <1% 1% 11x 8x 1.9x

3 General Moly / GMO 326 3.59 -20% 1,398 new 2% 0% n/m n/m 2.2x

4 Harbinger Group / HRG 621 4.46 -27% 117,425 0% 84% 39% n/a n/a n/m

5 Cliffs Natural / CLF 9,877 67.64 -27% 450 0% <1% 2% 5x 4x 2.4x

6 Crosstex Energy / XTXI 426 9.02 -24% 4,600 0% 10% 3% n/m >99x n/m

7 Research In Motion / RIMM 13,994 26.69 -7% 300 new <1% 1% n/a n/a 2.0x

8 Southern Union / SUG 5,141 41.21 3% 250 new <1% 1% 22x 20x 2.0x

9 GenOn Energy / GEN 2,284 2.96 -23% 1,972 0% <1% 0% n/m n/m .4x

10 Media General / MEG 44 1.92 -50% 162 0% <1% 0% n/m n/m n/m

Top Holdings of Harbinger Capital – By Dollar Value



1 Spectrum Brands / SPB 1,283 24.51 -23% 27,937 -18% 53% 51% 13x 8x n/m

2 Harbinger Group / HRG 621 4.46 -27% 117,425 0% 84% 39% n/a n/a n/m

3 Crosstex Energy / XTXI 426 9.02 -24% 4,600 0% 10% 3% n/m >99x n/m

4 Cliffs Natural / CLF 9,877 67.64 -27% 450 0% <1% 2% 5x 4x 2.4x

5 N.A. Energy Partners / NOA 196 5.10 -33% 3,600 new 9% 1% n/a n/a 1.8x

6 Owens Corning / OC 3,075 24.91 -33% 475 new <1% 1% 11x 8x 1.9x

7 Southern Union / SUG 5,141 41.21 3% 250 new <1% 1% 22x 20x 2.0x

8 Research In Motion / RIMM 13,994 26.69 -7% 300 new <1% 1% n/a n/a 2.0x

9 GenOn Energy / GEN 2,284 2.96 -23% 1,972 0% <1% 0% n/m n/m .4x

10 General Moly / GMO 326 3.59 -20% 1,398 new 2% 0% n/m n/m 2.2x


CVR Energy / CVI

General Moly / GMO

N.A. Energy Partners / NOA

Owens Corning / OC

Research In Motion / RIMM

Solutia / SOA

Southern Union / SUG

Trina Solar / TSL

Barclays / BCS

Bunge / BG

Corn Products / CPO

New York Times / NYT

Petrohawk Energy / HK

Radian Group / RDN

Portfolio Metrics * Sector Weightings *, ** Portfolio size $1.4 billion








** A material portion of assets managed by Phil Falcone may be invested in private, non-equity or non-U.S. securities, which are not shown here.

Technology54%Financial

41%

Basic Materials3%

Other3%



Hawkshaw (Kian Ghazi) Kian Ghazi co-founded long/short investment partnership Hawkshaw in 2002. Ghazi looks for investments in which there is a disconnect between near-term market expectations and longer-term intrinsic value. He relies on in-depth primary research to form investment theses on individual companies.

MOI Signal Rank™ – Top Current Ideas of Hawkshaw Capital



1 Ingram Micro / IM 2,615 16.24 -10% 596 65% <1% 11% 9x 7x .8x

2 Talbots / TLB 195 2.76 -17% 2,570 new 4% 8% n/m n/m 2.6x

3 Frozen Food Express / FFEX 57 3.24 -9% 1,890 5% 11% 7% n/a n/a .8x

4 Aviat Networks / AVNW 169 2.79 -29% 2,170 1% 4% 7% n/m 13x .9x

5 FalconStor Software / FALC 133 2.84 -37% 234 0% <1% 1% n/m n/m 5.0x

6 Symantec / SYMC 11,561 15.42 -22% 940 -2% <1% 16% 9x 8x n/m

7 AnnTaylor Stores / ANN 1,130 21.70 -17% 205 -2% <1% 5% 12x 10x 2.9x

8 XO Group / XOXO 250 8.24 -17% 882 -3% 3% 8% 59x 33x 2.0x

9 Dell / DELL 26,403 14.00 -16% 954 -2% <1% 15% 7x 7x >9.9x

10 Abercrombie & Fitch / ANF 4,941 56.36 -16% 199 -2% <1% 13% 18x 12x 2.6x

Top Holdings of Hawkshaw Capital – By Dollar Value



1 Symantec / SYMC 11,561 15.42 -22% 940 -2% <1% 16% 9x 8x n/m

2 Dell / DELL 26,403 14.00 -16% 954 -2% <1% 15% 7x 7x >9.9x

3 Abercrombie & Fitch / ANF 4,941 56.36 -16% 199 -2% <1% 13% 18x 12x 2.6x

4 Ingram Micro / IM 2,615 16.24 -10% 596 65% <1% 11% 9x 7x .8x

5 Electronic Arts / ERTS 6,371 19.31 -18% 417 -54% <1% 9% 22x 16x 4.3x

6 XO Group / XOXO 250 8.24 -17% 882 -3% 3% 8% 59x 33x 2.0x

7 Talbots / TLB 195 2.76 -17% 2,570 new 4% 8% n/m n/m 2.6x

8 Frozen Food Express / FFEX 57 3.24 -9% 1,890 5% 11% 7% n/a n/a .8x

9 Aviat Networks / AVNW 169 2.79 -29% 2,170 1% 4% 7% n/m 13x .9x

10 AnnTaylor Stores / ANN 1,130 21.70 -17% 205 -2% <1% 5% 12x 10x 2.9x


Talbots / TLB IAC/InterActiveCorp / IACI










Technology59%

Services34%

Transportation7%



Hound Partners (Jonathan Auerbach) Jonathan Auerbach is a “Tiger seed,” having received an early-stage investment from Julian Robertson.

MOI Signal Rank™ – Top Current Ideas of Hound Partners



1 Ensco / ESV 9,755 42.32 -21% 859 32% <1% 8% 12x 7x 1.3x

2 Carter’s / CRI 1,613 27.78 -10% 1,523 52% 3% 9% 15x 12x 6.9x

3 Level 3 Comms / LVLT 2,959 1.66 -32% 16,452 new <1% 6% n/m n/m n/m


5 Ascent Media / ASCMA 647 42.59 -20% 647 66% 4% 6% n/a n/a n/m

6 Kronos Worldwide / KRO 2,319 20.01 -36% 401 >100% <1% 2% 7x 5x 2.7x

7 Warner Chilcott / WCRX 4,134 16.27 -33% 1,034 new <1% 4% 4x 4x n/m

8 Compass Minerals / CMP 2,377 72.25 -16% 422 2% 1% 7% 14x 12x 6.7x

9 Blount International / BLT 721 14.79 -15% 1,306 new 3% 4% 12x 11x n/m

10 Kinder Morgan Mgmt / KMR 5,419 56.98 -12% 236 57% <1% 3% 32x 24x 2.2x

Top Holdings of Hound Partners – By Dollar Value



1 Valeant Pharma / VRX 11,699 39.66 -24% 1,463 -3% <1% 13% n/a n/a n/m

2 W.R. Grace / GRA 2,592 35.17 -23% 1,625 -10% 2% 13% 9x 9x n/m

3 Carter’s / CRI 1,613 27.78 -10% 1,523 52% 3% 9% 15x 12x 6.9x

4 TransDigm / TDG 4,252 84.78 -7% 444 -13% <1% 8% 20x 16x n/m

5 Ensco / ESV 9,755 42.32 -21% 859 32% <1% 8% 12x 7x 1.3x

6 Compass Minerals / CMP 2,377 72.25 -16% 422 2% 1% 7% 14x 12x 6.7x

7 Liberty Interactive / LINTA 17,044 13.74 -18% 2,186 -8% <1% 7% 17x 14x n/m

8 Ascent Media / ASCMA 647 42.59 -20% 647 66% 4% 6% n/a n/a n/m

9 Level 3 Comms / LVLT 2,959 1.66 -32% 16,452 new <1% 6% n/m n/m n/m



Blount International / BLT

Google / GOOG

Level 3 Comms / LVLT

USEC / USU

Warner Chilcott / WCRX

Liberty Starz / LSTZA

SemGroup / SEMG

TiVo / TIVO










Services28%

Basic Materials22%

Health Care19%

Other31%



Icahn Entities (Carl Icahn) Carl Icahn is an activist investor with a long track record of success agitating for change at underperforming companies. Carl publishes an activist investing blog entitled The Icahn Report at www.icahnreport.com. MOI Signal Rank™ – Top Current Ideas of Icahn Entities



1 Vector Group / VGR 1,384 18.28 3% 14,095 new 19% 3% n/a n/a n/m

2 Motricity / MOTR 114 2.46 -68% 6,782 0% 15% 0% n/m n/m 3.0x

3 Dynegy / DYN 435 3.55 -43% 18,042 0% 15% 1% n/m n/m .2x

4 American Railcar / ARII 304 14.25 -39% 11,564 0% 54% 2% >99x 11x 1.0x

5 Federal-Mogul / FDML 1,471 14.87 -35% 75,242 0% 76% 11% 7x 6x n/m

6 Mentor Graphics / MENT 1,099 9.89 -23% 16,120 0% 15% 2% 10x 8x 4.1x


8 Icahn Enterprises / IEP 3,508 40.99 -5% 79,238 1% 93% 32% n/a n/a 2.1x

9 Motorola Solutions / MSI 13,286 38.72 -16% 38,292 0% 11% 15% 16x 14x 2.6x

10 Hain Celestial / HAIN 1,252 28.82 -14% 7,131 0% 16% 2% 22x 19x >9.9x

Top Holdings of Icahn Entities – By Dollar Value



1 Icahn Enterprises / IEP 3,508 40.99 -5% 79,238 1% 93% 32% n/a n/a 2.1x

2 Motorola Solutions / MSI 13,286 38.72 -16% 38,292 0% 11% 15% 16x 14x 2.6x

3 Motorola Mobility / MMI 11,242 37.86 72% 33,506 0% 11% 13% 73x 27x 3.4x

4 Federal-Mogul / FDML 1,471 14.87 -35% 75,242 0% 76% 11% 7x 6x n/m

5 Clorox / CLX 8,533 64.00 -5% 12,500 0% 9% 8% 16x 14x n/m

6 Forest Labs / FRX 9,014 32.83 -17% 19,896 >100% 7% 6% 9x 27x 3.2x

7 Lions Gate / LGF 971 7.08 7% 44,642 0% 33% 3% n/a n/a n/m

8 Vector Group / VGR 1,384 18.28 3% 14,095 new 19% 3% n/a n/a n/m

9 Hain Celestial / HAIN 1,252 28.82 -14% 7,131 0% 16% 2% 22x 19x >9.9x

10 American Railcar / ARII 304 14.25 -39% 11,564 0% 54% 2% >99x 11x 1.0x


Oshkosh / OSK

Vector Group / VGR

Adventrx Pharma / ANX

Amgen / AMGN

Biogen Idec / BIIB

Chesapeake Energy / CHK

Cyberonics / CYBX

Exelixis / EXEL

Mattel / MAT

NRG Energy / NRG

Regeneron Pharma / REGN











** A large portion of assets controlled by Carl Icahn may be attributed to entities other than Icahn Capital LP and are therefore not shown in the chart or tables.

Financial32%

Technology15%

Capital Goods15%

Other38%



International Value Advisers (Charles de Vaulx) IVA was formed in 2007 and recently managed $16 billion. CIO Charles de Vaulx was previously portfolio manager of the First Eagle Global, Overseas, U.S. Value, Gold and Variable Funds. At First Eagle, de Vaulx was mentored by, and ultimately succeeded, Jean-Marie Eveillard. de Vaulx is a value investor in the tradition of Graham and Dodd.

MOI Signal Rank™ – Top Current Ideas of International Value Advisers



1 Net1 UEPS / UEPS 319 7.01 -19% 11,950 30% 26% 2% 5x 4x n/m

2 TOTAL / TOT 108,119 45.75 -21% 7,965 13% <1% 8% 6x 6x 1.5x

3 Dell / DELL 26,403 14.00 -16% 19,272 10% 1% 6% 7x 7x >9.9x


5 MasterCard / MA 38,139 300.16 0% 1,281 9% 1% 9% 17x 14x >9.9x

6 Wal-Mart / WMT 181,615 52.30 -2% 5,369 4% <1% 6% 12x 11x 3.9x

7 Cisco Systems / CSCO 82,943 15.08 -3% 14,937 new <1% 5% 9x 8x 3.0x

8 News Corp. / NWSA 41,066 15.56 -12% 11,637 >100% <1% 4% 12x 9x 6.6x

9 Hewlett-Packard / HPQ 48,950 23.60 -35% 9,663 29% <1% 5% 5x 4x n/m

10 Washington Post / WPO 2,685 338.51 -19% 498 9% 6% 4% 15x 20x 4.1x

Top Holdings of International Value Advisers – By Dollar Value



1 MasterCard / MA 38,139 300.16 0% 1,281 9% 1% 9% 17x 14x >9.9x

2 TOTAL / TOT 108,119 45.75 -21% 7,965 13% <1% 8% 6x 6x 1.5x


4 Wal-Mart / WMT 181,615 52.30 -2% 5,369 4% <1% 6% 12x 11x 3.9x

5 Dell / DELL 26,403 14.00 -16% 19,272 10% 1% 6% 7x 7x >9.9x

6 Hewlett-Packard / HPQ 48,950 23.60 -35% 9,663 29% <1% 5% 5x 4x n/m

7 Cisco Systems / CSCO 82,943 15.08 -3% 14,937 new <1% 5% 9x 8x 3.0x


9 News Corp. / NWSA 41,066 15.56 -12% 11,637 >100% <1% 4% 12x 9x 6.6x

10 Washington Post / WPO 2,685 338.51 -19% 498 9% 6% 4% 15x 20x 4.1x


Amdocs / DOX


CVS Caremark / CVS

Walgreen / WAG

CBS / CBS

Cintas / CTAS










Technology36%

Services31%

Energy13%

Other19%



Joho Capital (Robert Karr) Robert Karr is a “Tiger Cub,” having previously worked under Julian Robertson of Tiger Management. Karr runs a concentrated investment fund, with the top three holdings occasionally comprising more than 50% of the equity portfolio.

MOI Signal Rank™ – Top Current Ideas of Joho Capital



1 Renren / RENN 2,732 6.97 -21% 3,544 new <1% 5% n/m >99x 2.2x

2 SINA Corp. / SINA 5,931 90.05 -13% 254 new <1% 5% 88x 51x 4.6x

3 Yahoo! / YHOO 16,313 12.92 -14% 6,013 0% <1% 17% 17x 15x 1.9x

4 Katy Industries / KT 9,199 17.32 -11% 3,389 0% <1% 13% 6x 7x 1.1x

5 Home Inns & Hotels / HMIN 1,447 35.27 -7% 1,012 0% 2% 8% 25x 17x >9.9x

6 Hexcel / HXL 1,885 19.17 -12% 821 new <1% 3% 17x 14x 2.6x

7 Google / GOOG 158,512 490.92 -3% 63 7% <1% 7% 14x 12x 3.6x

8 TAL Education / XRS 897 11.75 8% 1,821 0% 2% 5% 32x 23x 5.8x

9 7 Days Group / SVN 952 19.08 -1% 935 0% 2% 4% 38x 24x 4.3x

10 Jiayuan.com / DATE 409 13.09 15% 1,264 new 4% 4% 44x 26x 5.1x

Top Holdings of Joho Capital – By Dollar Value



1 Estee Lauder / EL 17,411 88.57 -16% 1,062 -9% <1% 20% 21x 18x 6.6x

2 Yahoo! / YHOO 16,313 12.92 -14% 6,013 0% <1% 17% 17x 15x 1.9x

3 Katy Industries / KT 9,199 17.32 -11% 3,389 0% <1% 13% 6x 7x 1.1x

4 New Oriental Edu. / EDU 4,224 27.50 -2% 1,429 0% <1% 8% 8x 6x 7.6x

5 Home Inns & Hotels / HMIN 1,447 35.27 -7% 1,012 0% 2% 8% 25x 17x >9.9x

6 Google / GOOG 158,512 490.92 -3% 63 7% <1% 7% 14x 12x 3.6x

7 Renren / RENN 2,732 6.97 -21% 3,544 new <1% 5% n/m >99x 2.2x

8 SINA Corp. / SINA 5,931 90.05 -13% 254 new <1% 5% 88x 51x 4.6x

9 TAL Education / XRS 897 11.75 8% 1,821 0% 2% 5% 32x 23x 5.8x

10 7 Days Group / SVN 952 19.08 -1% 935 0% 2% 4% 38x 24x 4.3x


Hexcel / HXL

Jiayuan.com / DATE

Renren / RENN

SINA Corp. / SINA

Baidu.com / BIDU

China Kanghui / KH

NVIDIA / NVDA










Services41%

Technology39%


20%



Lane Five (Lisa Rapuano) Yale-educated Lisa Rapuano spent ten years at Legg Mason Capital Management and two years as co-CIO at Matador Capital Management prior to founding Lane Five in 2006.

MOI Signal Rank™ – Top Current Ideas of Lane Five Capital



1 Skechers / SKX 720 14.44 0% 329 65% <1% 6% n/m 13x .8x

2 MedCath / MDTH 261 12.77 -6% 427 4% 2% 7% 71x 75x .8x

3 Learning Tree / LTRE 112 8.30 -7% 708 2% 5% 7% 29x 18x 3.0x

4 Williams Controls / WMCO 79 10.83 -6% 667 0% 9% 9% n/a n/a 4.6x


6 DeVry / DV 2,714 39.46 -33% 71 8% <1% 4% 9x 9x 4.0x

7 Healthsouth / HLS 1,766 18.53 -29% 219 5% <1% 5% 15x 13x n/m

8 Quiksilver / ZQK 580 3.52 -25% 320 new <1% 1% 15x 10x 5.5x

9 American Public Ed. / APEI 621 34.84 -22% 85 0% <1% 4% 18x 14x 5.9x

10 Progressive Waste / BIN 2,522 20.91 -16% 103 new <1% 3% 19x 16x 9.9x

Top Holdings of Lane Five Capital – By Dollar Value



1 Williams Controls / WMCO 79 10.83 -6% 667 0% 9% 9% n/a n/a 4.6x


3 Learning Tree / LTRE 112 8.30 -7% 708 2% 5% 7% 29x 18x 3.0x

4 MedCath / MDTH 261 12.77 -6% 427 4% 2% 7% 71x 75x .8x

5 Skechers / SKX 720 14.44 0% 329 65% <1% 6% n/m 13x .8x

6 Ares Capital / ARCC 2,816 13.73 -15% 338 0% <1% 6% 10x 9x .9x

7 Healthsouth / HLS 1,766 18.53 -29% 219 5% <1% 5% 15x 13x n/m

8 SBA Comms / SBAC 3,788 33.98 -11% 104 0% <1% 4% n/m n/m n/m

9 American Public Ed. / APEI 621 34.84 -22% 85 0% <1% 4% 18x 14x 5.9x

10 DeVry / DV 2,714 39.46 -33% 71 8% <1% 4% 9x 9x 4.0x


Berkshire Hills Banc / BHLB

OceanFirst Financial / OCFC

Progressive Waste / BIN

Quiksilver / ZQK

SI Financial / SIFI

Raymond James / RJF










Services47%

Financial22%

Consumer Cyclical

17%

Other14%



Leucadia (Ian Cumming and Joe Steinberg) Chairman Cumming and President Steinberg describe their approach in a 2008 letter: “We tend to be buyers of assets and companies that are troubled or out of favor and as a result are selling substantially below the values, which we believe, are there. From time to time, we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. While we are not perfect in executing this strategy, we are proud of our long-term track record. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.” MOI Signal Rank™ – Top Current Ideas of Leucadia



1 Jefferies / JEF 2,931 14.50 -29% 54,506 10% 27% 88% 10x 8x 1.0x

2 Mueller Industries / MLI 1,461 38.55 2% 1,893 10% 5% 8% 14x 12x 1.9x

3 Cowen / COWN 378 3.25 -14% 994 0% <1% 0% 18x 6x .9x


Top Holdings of Leucadia – By Dollar Value



1 Jefferies / JEF 2,931 14.50 -29% 54,506 10% 27% 88% 10x 8x 1.0x

2 Mueller Industries / MLI 1,461 38.55 2% 1,893 10% 5% 8% 14x 12x 1.9x


4 Cowen / COWN 378 3.25 -14% 994 0% <1% 0% 18x 6x .9x

5 Global Power Equip. / GLPW 373 23.04 -13% 37 -73% <1% 0% 16x 11x 2.7x


None Capital Southwest / CSWC

Winn-Dixie Stores / WINN





Average market value $886 million





** A large portion of Leucadia’s asset value may be attributed to holdings that are not publicly traded and are therefore not shown in the chart or tables.

Financial92%

Basic Materials8%



Lone Pine (Steve Mandel) Mandel founded long/short firm Lone Pine in 1997. He previously worked for Tiger Management, Goldman Sachs and Mars. MOI Signal Rank™ – Top Current Ideas of Lone Pine



1 VanceInfo / VIT 556 12.47 -46% 4,507 7% 10% 1% 14x 11x 2.3x

2 Cognizant Tech / CTSH 16,704 55.01 -25% 8,606 35% 3% 4% 20x 16x 4.6x

3 Polo Ralph Lauren / RL 11,200 121.12 -9% 4,086 14% 4% 5% 18x 16x 6.2x

4 Apple / AAPL 330,072 356.03 6% 1,977 27% <1% 6% 13x 11x 4.9x

5 Dollar General / DG 10,957 32.08 -5% 16,190 3% 5% 5% 14x 12x n/m


7 WABCO Holdings / WBC 2,706 40.29 -42% 4,059 >100% 6% 1% 9x 7x >9.9x

8 Crown Castle / CCI 11,470 40.05 -2% 12,086 0% 4% 4% 85x 50x n/m

9 iSoftStone / ISS 516 9.44 -38% 3,831 51% 7% 0% 17x 13x 2.2x

10 Teradata / TDC 7,296 43.35 -28% 2,753 new 2% 1% 19x 17x >9.9x

Top Holdings of Lone Pine – By Dollar Value



1 Apple / AAPL 330,072 356.03 6% 1,977 27% <1% 6% 13x 11x 4.9x

2 Dollar General / DG 10,957 32.08 -5% 16,190 3% 5% 5% 14x 12x n/m

3 Polo Ralph Lauren / RL 11,200 121.12 -9% 4,086 14% 4% 5% 18x 16x 6.2x

4 Crown Castle / CCI 11,470 40.05 -2% 12,086 0% 4% 4% 85x 50x n/m

5 Cognizant Tech / CTSH 16,704 55.01 -25% 8,606 35% 3% 4% 20x 16x 4.6x


7 Goodrich Corp. / GR 10,188 81.50 -15% 4,949 13% 4% 4% 14x 12x >9.9x

8 Express Scripts / ESRX 21,916 44.89 -17% 8,046 -17% 2% 3% 14x 12x n/m

9 Yum! Brands / YUM 22,947 49.41 -11% 7,282 -30% 2% 3% 17x 15x >9.9x

10 O’Reilly Automotive / ORLY 8,302 61.07 -7% 5,563 0% 4% 3% 17x 15x 3.5x


American Tower / AMT Arcos Dorados / ARCO Bed Bath & Beyond / BBBY Dollar Tree / DLTR Emerson Electric / EMR Google / GOOG Liberty Capital / LCAPA

Medco Health / MHS Netflix / NFLX New Oriental Edu. / EDU Oceaneering / OII Teradata / TDC Yandex / YNDX

Amphenol / APH Cablevision / CVC Citrix Systems / CTXS Informatica / INFA JPMorgan Chase / JPM Lincare / LNCR MasterCard / MA

Mead Johnson / MJN Scripps Networks / SNI Towers Watson / TW ViaSat / VSAT










Services44%

Technology29%

Capital Goods6%

Other21%



Markel Gayner (Tom Gayner) Tom Gayner has been President of Markel Gayner Asset Management since 1990 and EVP and CIO of Markel, a Richmond, Virginia-based international property and casualty insurance holding company, since 2004. Tom has been a disciplined steward of capital on behalf of Markel shareholders, and his long-term investment record is one of the best in the business.

MOI Signal Rank™ – Top Current Ideas of Markel Gayner



1 Union Bankshares / UBSH 1 270 10.37 -15% 3,505 0% 13% 2% 11x 11x .8x

2 Investors Title / ITIC 73 34.37 -14% 229 0% 11% 0% 15x 17x .7x


4 Fairfax Financial / FRFHF 7,889 373.85 -7% 279 0% 1% 6% n/a n/a 1.3x

5 Western Union / WU 9,924 15.81 -21% 118 93% <1% 0% 10x 9x n/m

6 UPS / UPS 60,515 61.70 -15% 719 0% <1% 3% 14x 12x >9.9x

7 Teva Pharma / TEVA 36,813 38.73 -20% 252 77% <1% 1% 8x 7x >9.9x

8 Wal-Mart / WMT 181,615 52.30 -2% 1,056 2% <1% 3% 12x 11x 3.9x

9 Intel / INTC 100,767 19.19 -13% 467 78% <1% 1% 8x 8x 3.1x

10 Contango Oil & Gas / MCF 870 55.53 -5% 51 77% <1% 0% n/a n/a 2.1x

11 Federated Investors / FII 1,709 16.39 -31% 283 15% <1% 0% 11x 9x n/m

1 Markel acquired UBSH shares in connection with a merger of a Markel subsidiary with First Market Bank, a private company in which Markel was a shareholder.

Top Holdings of Markel Gayner – By Dollar Value




2 CarMax / KMX 5,768 25.49 -23% 5,204 0% 2% 8% 13x 12x 2.4x

3 Fairfax Financial / FRFHF 7,889 373.85 -7% 279 0% 1% 6% n/a n/a 1.3x

4 Diageo / DEO 45,832 73.15 -11% 1,251 0% <1% 6% 14x 13x n/m

5 Brookfield Asset / BAM 34,345 28.29 -15% 3,094 0% <1% 5% n/a n/a 3.8x

6 Wal-Mart / WMT 181,615 52.30 -2% 1,056 2% <1% 3% 12x 11x 3.9x

7 Exxon Mobil / XOM 339,376 69.80 -14% 724 0% <1% 3% 8x 8x 2.2x

8 Walt Disney / DIS 59,114 31.85 -18% 1,485 0% <1% 3% 13x 11x >9.9x

9 UPS / UPS 60,515 61.70 -15% 719 0% <1% 3% 14x 12x >9.9x

10 Marriott / MAR 9,260 26.24 -26% 1,417 0% <1% 2% 19x 15x n/m


Brookfield Resident. / BRP

Lennar / LEN

Oracle / ORCL Forest City / FCE.A










** A large portion of Markel Corp.’s asset value may be attributed to holdings that are not publicly traded and are therefore not shown in the chart or tables.

Services33%

Financial32%


10%

Other25%



MHR (Mark Rachesky) Mark Rachesky worked for Carl Icahn from 1990 to 1996. He subsequently founded MHR Fund Management, which focuses on inefficient market sectors, including special situation equities and distressed investments. He runs a concentrated portfolio. MOI Signal Rank™ – Top Current Ideas of MHR Fund Management



1 Ensco / ESV 9,755 42.32 -21% 6,131 new 3% 18% 12x 7x 1.3x


3 Key Energy Services / KEG 1,794 12.54 -30% 16,666 0% 12% 14% 13x 7x 3.9x

4 Loral Space / LORL 1,596 51.98 -25% 8,130 0% 26% 29% n/a n/a 1.6x


6 MetroPCS / PCS 3,717 10.27 -40% 12,820 0% 4% 9% 12x 10x >9.9x

7 Omega Navigation / ONAV 5 0.27 -39% 1,358 0% 8% 0% n/a n/a n/m

8 Dynavax Tech / DVAX 256 2.07 -25% 445 0% <1% 0% n/m n/m 5.9x

9 M & F Worldwide / MFW 408 21.10 -18% 747 0% 4% 1% n/a n/a n/m

10 Rand Logistics / RLOG 99 6.64 -10% 462 0% 3% 0% 17x 14x 4.9x

Top Holdings of MHR Fund Management – By Dollar Value



1 Loral Space / LORL 1,596 51.98 -25% 8,130 0% 26% 29% n/a n/a 1.6x


3 Ensco / ESV 9,755 42.32 -21% 6,131 new 3% 18% 12x 7x 1.3x

4 Key Energy Services / KEG 1,794 12.54 -30% 16,666 0% 12% 14% 13x 7x 3.9x


6 MetroPCS / PCS 3,717 10.27 -40% 12,820 0% 4% 9% 12x 10x >9.9x

7 M & F Worldwide / MFW 408 21.10 -18% 747 0% 4% 1% n/a n/a n/m

8 Rand Logistics / RLOG 99 6.64 -10% 462 0% 3% 0% 17x 14x 4.9x

9 TIM Participacoes / TSU 19,996 27.59 -6% 51 0% <1% 0% 18x 18x 5.1x

10 Dynavax Tech / DVAX 256 2.07 -25% 445 0% <1% 0% n/m n/m 5.9x


Ensco / ESV Seahawk Drilling / HAWK










Services39%

Energy32%

Technology29%



MSD Capital (Glenn Fuhrman and John Phelan) Glenn Fuhrman and John Phelan are co-managing partners and co-founders of MSD, having teamed up with Michael Dell to manage his personal capital in the late 1990s. Fuhrman previously spent ten years at Goldman Sachs, where he was head of the Special Investments Group. Phelan previously spent five years at Eddie Lampert’s ESL Investments.

MOI Signal Rank™ – Top Current Ideas of MSD Capital



1 Bluenight Energy / BKEP 259 7.50 -7% 3,577 new 10% 3% n/m 28x n/m

2 EchoStar / SATS 1,955 22.60 -38% 2,731 0% 3% 8% 20x 14x 1.0x

3 School Specialty / SCHS 177 9.30 -35% 2,785 0% 15% 3% n/a n/a n/m

4 DineEquity / DIN 708 38.13 -27% 2,512 0% 14% 12% 9x 9x n/m

5 First Opportunity Fund / FF 425 10.30 -15% 3,600 new 9% 5% n/a n/a 1.6x

6 Wright Express / WXS 1,489 38.52 -26% 1,635 0% 4% 8% 11x 9x n/m

7 Macquarie Infrastr. / MIC 1,017 22.10 -20% 3,532 0% 8% 10% 7x 7x n/m

8 Asbury Automotive / ABG 530 16.39 -12% 3,686 0% 11% 8% 9x 8x 1.8x

9 Journal Comms / JRN 194 3.51 -32% 4,376 11% 8% 2% 12x 8x 1.9x


Top Holdings of MSD Capital – By Dollar Value



1 Domino’s Pizza / DPZ 1,521 25.02 -1% 4,528 -5% 7% 14% 16x 14x n/m


3 Macquarie Infrastr. / MIC 1,017 22.10 -20% 3,532 0% 8% 10% 7x 7x n/m

4 Wright Express / WXS 1,489 38.52 -26% 1,635 0% 4% 8% 11x 9x n/m

5 EchoStar / SATS 1,955 22.60 -38% 2,731 0% 3% 8% 20x 14x 1.0x

6 Asbury Automotive / ABG 530 16.39 -12% 3,686 0% 11% 8% 9x 8x 1.8x

7 Nalco Holding / NLC 4,451 32.07 15% 1,852 1% 1% 8% 19x 15x n/m


9 First Opportunity Fund / FF 425 10.30 -15% 3,600 new 9% 5% n/a n/a 1.6x

10 Tyler Tech / TYL 719 22.62 -16% 1,356 -30% 4% 4% 30x 23x n/m


Bluenight Energy / BKEP

First Opportunity Fund / FF

None










Services55%

Energy16%

Transportation10%

Other20%



Pabrai Funds (Mohnish Pabrai) Mohnish Pabrai is founder and managing partner of Pabrai Investment Funds, a family of value-oriented investment partnerships with a fee structure similar to that of the Buffett Partnerships of the 1950s and ‘60s, i.e. no management fee and 25% performance fee above 6% annual hurdle rate. Pabrai Funds have a long-term track record vastly superior to that of the S&P 500 Index. Pabrai follows an investment strategy built upon the principles of Graham, Buffett and Greenblatt.

MOI Signal Rank™ – Top Current Ideas of Pabrai Funds



1 Goldman Sachs / GS 56,528 111.76 -16% 231 >100% <1% 11% 10x 7x .9x

2 Pinnacle Airlines / PNCL 64 3.34 -26% 1,986 0% 10% 3% 16x 3x .9x

3 Brookfield Prop. / BPO 8,133 16.15 -16% 2,359 0% <1% 16% n/a n/a .9x

4 Cresud / CRESY 721 13.62 -16% 1,286 0% 2% 7% 20x 23x n/m

5 Potash / POT 43,322 50.65 -11% 995 0% <1% 21% n/a n/a 5.6x

6 Brookfield Infrastr. / BIP 2,950 26.11 4% 1,770 0% 2% 20% n/a n/a n/m

7 POSCO / PKX 30,634 88.53 -18% 71 10% <1% 3% 8x 7x 1.7x

8 Horsehead / ZINC 388 8.88 -33% 1,357 0% 3% 5% 16x 9x 1.0x


10 Berkshire Hathaway / BRK.A 169,347 102,600 -12% 0 >100% <1% 0% 16x 13x 1.5x

Top Holdings of Pabrai Funds – By Dollar Value



1 Potash / POT 43,322 50.65 -11% 995 0% <1% 21% n/a n/a 5.6x

2 Brookfield Infrastr. / BIP 2,950 26.11 4% 1,770 0% 2% 20% n/a n/a n/m

3 Brookfield Prop. / BPO 8,133 16.15 -16% 2,359 0% <1% 16% n/a n/a .9x

4 Goldman Sachs / GS 56,528 111.76 -16% 231 >100% <1% 11% 10x 7x .9x

5 Cresud / CRESY 721 13.62 -16% 1,286 0% 2% 7% 20x 23x n/m


7 Horsehead / ZINC 388 8.88 -33% 1,357 0% 3% 5% 16x 9x 1.0x


9 Pinnacle Airlines / PNCL 64 3.34 -26% 1,986 0% 10% 3% 16x 3x .9x

10 POSCO / PKX 30,634 88.53 -18% 71 10% <1% 3% 8x 7x 1.7x


Brookfield Resident. / BRP

Harvest Natural / HNR

Terex / TEX








Median P / tangible book .9x


Basic Materials36%

Financial27%

Services21%

Other16%



Paulson & Co. (John Paulson) John Paulson founded his firm with $2 million in 1994. He gained notoriety by profiting hugely from the crisis of 2008.

MOI Signal Rank™ – Top Current Ideas of Paulson & Co. Market Price Shares Owned Holdings P/E (Est.) Price/ Value Recent from Recent from as % of This Next Tang.


1 Capital One / COF 18,972 41.30 -20% 25,093 14% 5% 5% 6x 7x 1.3x


3 American Capital / ACAS 2,742 7.75 -22% 43,725 0% 12% 2% 9x 9x .6x

4 Rock-Tenn / RKT 3,315 46.55 -30% 4,438 >100% 6% 1% 9x 7x 3.9x

5 Ralcorp / RAH 4,500 81.62 -6% 3,692 >100% 7% 2% 16x 14x n/m


7 Beazer Homes / BZH 120 1.58 -53% 5,800 0% 8% 0% n/m n/m .5x

8 Dex One / DEXO 63 1.26 -50% 3,676 0% 7% 0% n/a n/a n/m

9 Life Technologies / LIFE 6,468 35.84 -31% 7,520 new 4% 1% 10x 9x n/m

10 Salix Pharma / SLXP 1,684 28.50 -28% 1,500 >100% 3% 0% 13x 11x 9.3x

Top Holdings of Paulson & Co. – By Dollar Value Market Price Shares Owned Holdings P/E (Est.) Price/ Value Recent from Recent from as % of This Next Tang.


1 AngloGold Ashanti / AU 17,352 45.84 9% 39,935 -3% 11% 9% 13x 11x 3.9x

2 Anadarko Petroleum / APC 32,900 66.09 -14% 16,712 -21% 3% 6% 19x 15x 2.1x

3 Capital One / COF 18,972 41.30 -20% 25,093 14% 5% 5% 6x 7x 1.3x

4 Transocean / RIG 16,597 51.43 -20% 18,810 -23% 6% 5% 14x 9x 1.3x

5 Citigroup / C 78,114 26.77 -36% 33,505 -19% 1% 5% 7x 5x .6x

6 JPMorgan Chase / JPM 133,932 34.35 -16% 23,400 -1% <1% 4% 7x 6x 1.2x


8 Lubrizol / LZ 8,665 134.42 0% 5,460 -9% 8% 4% 12x 11x 6.3x

9 Hartford Financial / HIG 7,893 17.72 -33% 40,518 -8% 9% 4% 6x 4x .4x

10 Bank of America / BAC 70,806 6.97 -36% 99,520 -39% <1% 4% n/m 5x .6x


Agnico-Eagle Mines / AEM

Grifols / GRFS

Life Technologies / LIFE


News Corp. / NWSA

NYSE Euronext / NYX

RLJ Lodging / RLJ


State Bank Financial / STBZ

Tenet Healthcare / THC

Walter Energy / WLT

Boston Scientific / BSX

CIT Group / CIT

Cooper Companies / COO

International Paper / IP

J.C. Penney / JCP

Kinross Gold / KGC

Lorillard / LO

Seagate Technology / STX

St. Jude Medical / STJ










Financial39%

Basic Materials23%

Energy12%

Other26%



Pennant (Alan Fournier) Alan Fournier started his career at Sanford Bernstein in 1988 and became a partner in 1990. He also worked for Rich Pzena’s firm and David Tepper’s Appaloosa, where he was responsible for global equities. Fournier founded Pennant in 2001.

MOI Signal Rank™ – Top Current Ideas of Pennant Capital



1 Universal Stainless / USAP 209 30.59 -35% 538 new 8% 0% 12x 8x 1.2x

2 DaVita / DVA 6,504 69.64 -20% 3,131 3% 3% 6% 14x 11x n/m

3 Qualcomm / QCOM 78,142 46.52 -18% 4,444 3% <1% 6% 15x 13x 3.9x

4 Fidelity National / FIS 8,158 26.66 -13% 7,340 4% 2% 5% 12x 10x n/m

5 Expedia / EXPE 7,276 26.53 -8% 5,546 new 2% 4% 14x 12x n/m

6 WESCO International / WCC 1,579 36.51 -33% 1,667 >100% 4% 2% 10x 8x >9.9x

7 Adobe Systems / ADBE 11,206 22.69 -28% 5,637 7% 1% 3% 10x 9x 9.3x

8 Kronos Worldwide / KRO 2,319 20.01 -36% 246 78% <1% 0% 7x 5x 2.7x

9 Terex / TEX 1,500 13.69 -52% 4,815 47% 4% 2% 27x 7x .9x

10 Dollar General / DG 10,957 32.08 -5% 3,363 >100% <1% 3% 14x 12x n/m

Top Holdings of Pennant Capital – By Dollar Value



1 TransDigm / TDG 4,252 84.78 -7% 3,190 0% 6% 7% 20x 16x n/m

2 DaVita / DVA 6,504 69.64 -20% 3,131 3% 3% 6% 14x 11x n/m

3 Qualcomm / QCOM 78,142 46.52 -18% 4,444 3% <1% 6% 15x 13x 3.9x

4 Sensata Tech / ST 5,066 28.80 -24% 7,024 -3% 4% 5% 14x 11x n/m

5 Fidelity National / FIS 8,158 26.66 -13% 7,340 4% 2% 5% 12x 10x n/m

6 Abercrombie & Fitch / ANF 4,941 56.36 -16% 2,978 -11% 3% 5% 18x 12x 2.6x

7 WellPoint / WLP 20,951 58.09 -26% 2,881 -13% <1% 4% 8x 8x 6.9x

8 Expedia / EXPE 7,276 26.53 -8% 5,546 new 2% 4% 14x 12x n/m

9 UnitedHealth / UNH 46,619 43.32 -16% 3,251 -10% <1% 4% 10x 9x >9.9x

10 Adobe Systems / ADBE 11,206 22.69 -28% 5,637 7% 1% 3% 10x 9x 9.3x


Broadcom / BRCM

Expedia / EXPE

Fluor / FLR

Universal Stainless / USAP

Amgen / AMGN

Baxter International / BAX

Celgene / CELG

Dyax / DYAX

McDermott / MDR

Old Republic / ORI

Omnicom / OMC

Western Union / WU










Financial23%

Technology20%

Capital Goods17%

Other41%



Pershing Square (Bill Ackman) Bill Ackman, managing member of Pershing Square Capital, is a value-oriented activist investor. He runs a concentrated portfolio with the largest ten equity investments accounting for the vast majority of his long book. Before the credit crunch developed into a full-blown economic crisis, Ackman made a strong case for why MBIA (MBI) and AMBAC (ABK) were overvalued and fundamentally more distressed than the market had judged at the time. On the long side, Ackman has approached large companies, including McDonald’s (MCD) and Target (TGT), with proposals for unlocking value. MOI Signal Rank™ – Top Current Ideas of Pershing Square



1 Citigroup / C 78,114 26.77 -36% 23,521 60% <1% 12% 7x 5x .6x

2 Fortune Brands / FO 7,951 51.47 -19% 20,819 25% 13% 21% 17x 15x n/m

3 General Growth / GGP 12,320 13.13 -21% 72,234 1% 8% 18% n/a n/a 1.3x

4 J.C. Penney / JCP 5,198 24.38 -29% 39,076 0% 18% 18% 14x 11x 1.1x

5 Family Dollar Stores / FDO 5,845 48.61 -8% 11,094 new 9% 10% 16x 14x 4.9x

6 Howard Hughes / HHC 1,904 50.18 -23% 3,568 0% 9% 3% n/m >99x .9x

7 Alexander & Baldwin / ALEX 1,558 37.36 -22% 3,562 0% 9% 3% 32x 16x 1.4x

8 Greenlight Re / GLRE 780 21.33 -19% 250 0% <1% 0% 26x 5x 1.0x

9 Kraft Foods / KFT 59,076 33.45 -5% 22,231 0% 1% 14% 15x 13x n/m

Top Holdings of Pershing Square – By Dollar Value



1 Fortune Brands / FO 7,951 51.47 -19% 20,819 25% 13% 21% 17x 15x n/m

2 J.C. Penney / JCP 5,198 24.38 -29% 39,076 0% 18% 18% 14x 11x 1.1x

3 General Growth / GGP 12,320 13.13 -21% 72,234 1% 8% 18% n/a n/a 1.3x

4 Kraft Foods / KFT 59,076 33.45 -5% 22,231 0% 1% 14% 15x 13x n/m

5 Citigroup / C 78,114 26.77 -36% 23,521 60% <1% 12% 7x 5x .6x

6 Family Dollar Stores / FDO 5,845 48.61 -8% 11,094 new 9% 10% 16x 14x 4.9x

7 Howard Hughes / HHC 1,904 50.18 -23% 3,568 0% 9% 3% n/m >99x .9x

8 Alexander & Baldwin / ALEX 1,558 37.36 -22% 3,562 0% 9% 3% 32x 16x 1.4x

9 Greenlight Re / GLRE 780 21.33 -19% 250 0% <1% 0% 26x 5x 1.0x


Family Dollar Stores / FDO Corrections Corp. / CXW










Services52%

Conglomerates21%


15%

Other13%



Sageview (Ed Gilhuly and Scott Stuart) Ed Gilhuly and Scott Stuart were classmates at Stanford Business School. After graduating in 1986, Gilhuly joined Kohlberg Kravis Roberts & Co. in San Francisco, while Stuart started with KKR in New York. Each became a partner of KKR at the end of 1994. They continued serving in leadership roles at KKR until 2005, at which time they teamed up to start Sageview. The firm follows a highly concentrated, value-oriented investment approach. MOI Signal Rank™ – Top Current Ideas of Sageview Capital




2 Arris Group / ARRS 1,176 9.85 -15% 3,849 0% 3% 20% 11x 10x 1.9x

3 Covidien / COV 23,596 47.82 -10% 666 0% <1% 17% 12x 11x n/m

4 Liberty Interactive / LINTA 17,044 13.74 -18% 1,261 >100% <1% 9% 17x 14x n/m

5 Petrohawk Energy / HK 11,755 38.68 57% 952 5% <1% 20% 43x 24x 4.4x

6 Life Technologies / LIFE 6,468 35.84 -31% 1,208 -19% <1% 23% 10x 9x n/m

Top Holdings of Sageview Capital – By Dollar Value



1 Life Technologies / LIFE 6,468 35.84 -31% 1,208 -19% <1% 23% 10x 9x n/m

2 Arris Group / ARRS 1,176 9.85 -15% 3,849 0% 3% 20% 11x 10x 1.9x

3 Petrohawk Energy / HK 11,755 38.68 57% 952 5% <1% 20% 43x 24x 4.4x

4 Covidien / COV 23,596 47.82 -10% 666 0% <1% 17% 12x 11x n/m


6 Liberty Interactive / LINTA 17,044 13.74 -18% 1,261 >100% <1% 9% 17x 14x n/m


State Bank Financial / STBZ None










Health Care40%

Technology20%

Energy20%

Other20%



Scout (James Crichton) James Crichton co-founded Scout with Adam Weiss in 1999. The firm runs a concentrated portfolio of undervalued equities.

MOI Signal Rank™ – Top Current Ideas of Scout Capital



1 Arcos Dorados / ARCO 4,907 23.42 11% 9,450 new 5% 10% 33x 23x 7.5x

2 Sensata Tech / ST 5,066 28.80 -24% 10,500 28% 6% 14% 14x 11x n/m

3 SodaStream / SODA 758 37.94 -38% 1,010 new 5% 2% 25x 19x 3.9x

4 Fresh Market / TFM 1,500 31.26 -19% 2,500 new 5% 4% 28x 24x >9.9x

5 Sherwin-Williams / SHW 7,394 69.57 -17% 1,450 new 1% 5% 14x 12x >9.9x

6 Domino’s Pizza / DPZ 1,521 25.02 -1% 5,890 16% 10% 7% 16x 14x n/m

7 American Tower / AMT 19,325 48.83 -7% 3,630 1% <1% 8% 47x 36x n/m

8 Visa / V 65,028 79.60 -6% 1,415 new <1% 5% 16x 14x >9.9x

9 McDonald’s / MCD 90,000 87.23 3% 2,310 11% <1% 9% 17x 15x 7.4x

10 MasterCard / MA 38,139 300.16 0% 405 new <1% 6% 17x 14x >9.9x

Top Holdings of Scout Capital – By Dollar Value



1 Sensata Tech / ST 5,066 28.80 -24% 10,500 28% 6% 14% 14x 11x n/m

2 Arcos Dorados / ARCO 4,907 23.42 11% 9,450 new 5% 10% 33x 23x 7.5x

3 McDonald’s / MCD 90,000 87.23 3% 2,310 11% <1% 9% 17x 15x 7.4x

4 American Tower / AMT 19,325 48.83 -7% 3,630 1% <1% 8% 47x 36x n/m

5 Domino’s Pizza / DPZ 1,521 25.02 -1% 5,890 16% 10% 7% 16x 14x n/m

6 TE Connectivity / TEL 12,174 28.09 -24% 5,040 15% 1% 7% 9x 8x 3.7x

7 MasterCard / MA 38,139 300.16 0% 405 new <1% 6% 17x 14x >9.9x

8 Visa / V 65,028 79.60 -6% 1,415 new <1% 5% 16x 14x >9.9x

9 Sherwin-Williams / SHW 7,394 69.57 -17% 1,450 new 1% 5% 14x 12x >9.9x

10 eBay / EBAY 35,003 27.16 -16% 3,500 6% <1% 4% 14x 12x 5.4x



Coca-Cola Enterprise / CCE

Fresh Market / TFM

Masco / MAS

MasterCard / MA

Seagate Technology / STX

Sherwin-Williams / SHW

SINA Corp. / SINA

SodaStream / SODA

Visa / V

Williams Companies / WMB

Bank of NY Mellon / BK

Fortune Brands / FO

Graham Packaging / GRM

Hansen Natural / HANS

HCA / HCA

Lamar Advertising / LAMR

Solutia / SOA

Textron / TXT

Youku / YOKU

Yum! Brands / YUM










Services51%

Technology23%

Financial11%

Other15%



Second Curve (Tom Brown) Tom Brown was a sell-side analyst focused on the financial services industry in the 1980s and 1990s, working at Smith Barney, PaineWebber and Donaldson Lufkin & Jenrette. In 1998, he joined Julian Robertson’s Tiger Management. He struck out on his own two years later, founding Second Curve Capital, a value-oriented firm with a focus on the financial sector.

MOI Signal Rank™ – Top Current Ideas of Second Curve



1 Citizens Republic / CRBC 282 7.00 1% 2,774 >100% 7% 10% n/m 5x .8x

2 NewStar Financial / NEWS 422 8.40 -21% 2,314 33% 5% 10% 34x 14x .8x

3 Primus Guaranty / PRS 196 5.28 1% 6,601 2% 18% 17% n/a n/a 3.7x

4 Bancorp / TBBK 241 7.25 -31% 1,083 28% 3% 4% 25x 11x .9x

5 First Merchants / FRME 173 6.75 -24% 646 >100% 3% 2% 10x 8x .7x

6 Sun Bancorp NJ / SNBC 245 2.95 -19% 1,328 >100% 2% 2% n/m 49x 1.0x

7 Tennessee Commerce / TNCC 15 1.20 -54% 1,219 -5% 10% 1% n/m 60x .2x

8 Bank of America / BAC 70,806 6.97 -36% 29 new <1% 0% n/m 5x .6x

9 Synovus Financial / SNV 1,068 1.35 -35% 6,605 -1% <1% 4% n/m 8x .6x

10 CoBiz Financial / COBZ 172 4.64 -29% 3,345 -3% 9% 8% 14x 9x .8x

Top Holdings of Second Curve – By Dollar Value



1 Primus Guaranty / PRS 196 5.28 1% 6,601 2% 18% 17% n/a n/a 3.7x

2 Banner Corp. / BANR 231 13.72 -22% 1,607 -85% 10% 11% n/m >99x .6x

3 Ocwen Financial / OCN 1,269 12.57 -1% 1,603 -10% 2% 10% 12x 10x 1.7x

4 NewStar Financial / NEWS 422 8.40 -21% 2,314 33% 5% 10% 34x 14x .8x

5 Citizens Republic / CRBC 282 7.00 1% 2,774 >100% 7% 10% n/m 5x .8x

6 CoBiz Financial / COBZ 172 4.64 -29% 3,345 -3% 9% 8% 14x 9x .8x

7 Taylor Capital / TAYC 127 6.24 -24% 2,024 -1% 10% 6% n/m 11x 1.2x

8 West. Alliance Banc / WAL 448 5.45 -23% 1,769 -19% 2% 5% 24x 10x 1.0x

9 Synovus Financial / SNV 1,068 1.35 -35% 6,605 -1% <1% 4% n/m 8x .6x

10 Bancorp / TBBK 241 7.25 -31% 1,083 28% 3% 4% 25x 11x .9x


AmeriServ Financial / ASRV

Bank of America / BAC

First Marblehead / FMD

MidWestOne Financial / MOFG

NewBridge Bancorp / NBBC

Suffolk Bancorp / SUBK

Altisource Portfolio / ASPS

Zions BanCorp / ZION








Median P / tangible book .8x


Financial100%



Southeastern (Mason Hawkins) Mason Hawkins is chairman and CEO of Southeastern Asset Management, a firm he founded in 1975. Southeastern serves as investment adviser to the Longleaf Partners Funds, a family of value-oriented mutual funds. The firm has $22 billion of assets under management, including $13 billion in separately managed accounts. MOI Signal Rank™ – Top Current Ideas of Southeastern



1 Global Crossing / GLBC 1,620 26.44 -31% 7,414 new 12% 1% n/m n/m n/m

2 Cemex / CX 5,120 4.98 -42% 159,778 17% 16% 4% n/m n/m .3x

3 Texas Industries / TXI 868 31.12 -25% 5,943 26% 21% 1% n/m n/m 1.3x

4 Lamar Advertising / LAMR 1,712 18.43 -33% 4,968 new 5% 0% >99x >99x n/m

5 Loews Corp. / L 14,245 35.25 -16% 32,890 19% 8% 6% 11x 11x .8x

6 Dell / DELL 26,403 14.00 -16% 149,795 2% 8% 10% 7x 7x >9.9x


8 Chesapeake Energy / CHK 19,369 29.31 -1% 87,098 10% 13% 12% 10x 10x 1.6x

9 Vail Resorts / MTN 1,254 34.76 -25% 2,711 25% 8% 0% 37x 25x 2.4x

10 Philips Electronics / PHG 19,194 18.94 -26% 14,955 92% 1% 1% n/m 14x 4.3x

Top Holdings of Southeastern – By Dollar Value



1 Chesapeake Energy / CHK 19,369 29.31 -1% 87,098 10% 13% 12% 10x 10x 1.6x

2 Dell / DELL 26,403 14.00 -16% 149,795 2% 8% 10% 7x 7x >9.9x

3 DIRECTV / DTV 30,956 41.93 -17% 36,621 -22% 5% 7% 12x 10x n/m

4 Yum! Brands / YUM 22,947 49.41 -11% 26,284 -11% 6% 6% 17x 15x >9.9x

5 Loews Corp. / L 14,245 35.25 -16% 32,890 19% 8% 6% 11x 11x .8x

6 Aon / AON 14,466 44.28 -14% 22,277 -3% 7% 5% 13x 11x n/m

7 News Corp. / NWSA 41,066 15.56 -12% 61,240 3% 2% 5% 12x 9x 6.6x

8 Walt Disney / DIS 59,114 31.85 -18% 26,051 -1% 1% 4% 13x 11x >9.9x

9 Liberty Interactive / LINTA 17,044 13.74 -18% 57,939 -3% 5% 4% 17x 14x n/m

10 Cemex / CX 5,120 4.98 -42% 159,778 17% 16% 4% n/m n/m .3x


Global Crossing / GLBC

Lamar Advertising / LAMR

Madison Sq. Garden / MSG

Diageo / DEO

Pioneer Natural / PXD

Sealed Air Corp. / SEE

Symantec / SYMC

Worthington / WOR










Services40%

Financial23%

Energy12%

Other25%



Spencer (Ken Shubin Stein) Dr. Shubin Stein is the founder of Spencer Capital, a deep value-oriented investment management firm.

MOI Signal Rank™ – Top Current Ideas of Spencer Capital



1 Fairfax Financial / FRFHF 7,889 373.85 -7% 1 new <1% 18% n/a n/a 1.3x

2 Howard Hughes / HHC 1,904 50.18 -23% 7 34% <1% 22% n/m >99x .9x

3 General Motors / GM 33,253 22.16 -27% 5 new <1% 7% 5x 5x n/m

4 General Growth / GGP 12,320 13.13 -21% 10 -69% <1% 8% n/a n/a 1.3x

5 Breeze-Eastern / BZC 100 10.60 -5% 15 -54% <1% 10% n/a n/a 3.0x

6 Berkshire Hathaway / BRK.A 169,347 102,600 -12% 0 -69% <1% 15% 16x 13x 1.5x

7 MRV Communications / MRVC 208 1.32 -4% 152 -57% <1% 12% 44x 15x 1.0x

Top Holdings of Spencer Capital – By Dollar Value



1 Howard Hughes / HHC 1,904 50.18 -23% 7 34% <1% 22% n/m >99x .9x

2 Fairfax Financial / FRFHF 7,889 373.85 -7% 1 new <1% 18% n/a n/a 1.3x

3 Berkshire Hathaway / BRK.A 169,347 102,600 -12% 0 -69% <1% 15% 16x 13x 1.5x

4 MRV Communications / MRVC 208 1.32 -4% 152 -57% <1% 12% 44x 15x 1.0x

5 Breeze-Eastern / BZC 100 10.60 -5% 15 -54% <1% 10% n/a n/a 3.0x

6 General Growth / GGP 12,320 13.13 -21% 10 -69% <1% 8% n/a n/a 1.3x

7 Markel / MKL 3,655 377.04 -5% 0 -69% <1% 7% 29x 24x 1.5x

8 General Motors / GM 33,253 22.16 -27% 5 new <1% 7% 5x 5x n/m


Fairfax Financial / FRFHF

General Motors / GM

Immucor / BLUD

Iridium Comms / IRDM

J.C. Penney / JCP

Myriad Genetics / MYGN

PNI Digital Media / PNDMF

Quest Diagnostics / DGX









* Based on information provided to The Manual of Ideas by Spencer Capital. Excludes portfolio cash, certain non-U.S. holdings, and non-equity securities.

Financial40%

Services31%

Technology12%

Other17%



Third Point (Dan Loeb) Loeb is the founder of long/short activist fund Third Point, which has amassed a respectable long-term investment record. MOI Signal Rank™ – Top Current Ideas of Third Point




2 Sara Lee Corp. / SLE 10,093 17.25 -9% 6,650 >100% 1% 5% 19x 16x >9.9x

3 Xerium Technologies / XRM 205 13.57 -27% 1,700 15% 11% 1% 10x 7x n/m

4 LyondellBasell / LYB 15,993 27.98 -27% 4,000 8% <1% 5% n/a n/a 1.5x

5 El Paso Corp. / EP 13,364 17.35 -14% 13,000 18% 2% 11% 15x 13x 2.9x

6 Barrick Gold / ABX 50,805 50.78 12% 1,850 new <1% 4% n/a n/a 4.4x

7 CIT Group / CIT 6,129 30.55 -31% 3,000 94% 1% 4% 50x 25x .7x

8 Pall Corp. / PLL 5,127 44.08 -22% 2,100 75% 2% 4% 15x 13x 4.6x

9 Swift Transportation / SWFT 893 6.40 -53% 6,000 >100% 4% 2% 9x 6x n/m

10 Mead Johnson / MJN 13,609 66.73 -1% 1,600 78% <1% 5% 24x 21x n/m

Top Holdings of Third Point – By Dollar Value



1 El Paso Corp. / EP 13,364 17.35 -14% 13,000 18% 2% 11% 15x 13x 2.9x

2 CVR Energy / CVI 2,118 24.46 -1% 6,300 -14% 7% 7% 7x 7x 2.3x


4 Sara Lee / SLE 10,093 17.25 -9% 6,650 >100% 1% 5% 19x 16x >9.9x

5 LyondellBasell / LYB 15,993 27.98 -27% 4,000 8% <1% 5% n/a n/a 1.5x

6 Mead Johnson / MJN 13,609 66.73 -1% 1,600 78% <1% 5% 24x 21x n/m

7 Sunoco / SUN 4,116 33.98 -19% 3,000 40% 2% 5% 72x 15x 1.5x

8 Barrick Gold / ABX 50,805 50.78 12% 1,850 new <1% 4% n/a n/a 4.4x

9 Pall Corp. / PLL 5,127 44.08 -22% 2,100 75% 2% 4% 15x 13x 4.6x

10 CIT Group / CIT 6,129 30.55 -31% 3,000 94% 1% 4% 50x 25x .7x


Abraxas Petroleum / AXAS Accuride / ACW Barrick Gold / ABX BP / BP Cablevision / CVC Expedia / EXPE Freeport-McMoRan / FCX Freescale Semi / FSL Lone Pine Resources / LPR

Mosaic Company / MOS Newell Rubbermaid / NWL ON Semiconductor / ONNN Quest Diagnostics / DGX SanDisk / SNDK

Apple / AAPL Aspen Technology / AZPN Capitol Federal / CFFN CareFusion / CFN CBS / CBS KKR & Co. / KKR Madison Sq. Garden / MSG Marathon Oil / MRO Nabi Biopharma / NABI

Oneida Financial / ONFC Oritani Financial / ORIT PHH / PHH Tesoro / TSO Textron / TXT Vantage Drilling / VTG ViewPoint Financial / VPFG YPF S.A. / YPF










Basic Materials24%

Services21%Energy

17%

Other38%



Tiger Global (Chase Coleman) Chase Coleman, a descendant of early New York Governor Peter Stuyvesant, worked for Julian Robertson’s Tiger Management prior to founding Tiger Global in 2001. He has been an active investor in global technology companies.

MOI Signal Rank™ – Top Current Ideas of Tiger Global



1 Yandex / YNDX 9,602 29.99 -16% 54,058 new 17% 31% 52x 34x >9.9x

2 MakeMyTrip / MMYT 685 18.71 -24% 6,180 50% 17% 2% n/a n/a 6.5x


4 Apple / AAPL 330,072 356.03 6% 2,161 53% <1% 15% 13x 11x 4.9x

5 Bitauto / BITA 253 6.11 -22% 3,021 47% 7% 0% 15x 10x 1.9x

6 Baidu.com / BIDU 44,292 126.98 -9% 1,000 59% <1% 2% 44x 29x >9.9x


8 Longtop Fin. Tech / LFT 69 1.20 -95% 2,587 0% 5% 0% n/a n/a .2x


10 Visa / V 65,028 79.60 -6% 1,897 26% <1% 3% 16x 14x >9.9x

Top Holdings of Tiger Global – By Dollar Value



1 Yandex / YNDX 9,602 29.99 -16% 54,058 new 17% 31% 52x 34x >9.9x

2 Apple / AAPL 330,072 356.03 6% 2,161 53% <1% 15% 13x 11x 4.9x


4 Viacom / VIA.B 23,948 40.87 -20% 7,112 -10% 1% 6% 11x 10x n/m

5 Amazon.com / AMZN 81,223 178.93 -12% 1,305 -7% <1% 4% 89x 55x >9.9x



8 Visa / V 65,028 79.60 -6% 1,897 26% <1% 3% 16x 14x >9.9x

9 priceline.com / PCLN 22,344 448.95 -12% 323 -33% <1% 3% 20x 15x >9.9x

10 Baidu.com / BIDU 44,292 126.98 -9% 1,000 59% <1% 2% 44x 29x >9.9x


Alaska Comms / ALSK


Coca-Cola Enterprise / CCE

Google / GOOG

LinkedIn / LNKD

McClatchy / MNI

Rubicon Technology / RBCN

Sky-mobi / MOBI

Yandex / YNDX

Chinacast Education / CAST

Demand Media / DMD

MercadoLibre / MELI










Technology53%

Services36%

Financial8%

Other3%



ValueAct (Jeffrey Ubben) Prior to founding ValueAct in 2000, Jeffrey Ubben was a managing partner at Blum Capital for more than five years. Previously, he spent eight years at Fidelity where he managed the Fidelity Value Fund. ValueAct’s strategy combines intensive due diligence, a concentrated portfolio, and active involvement in the value creation at those investments.

MOI Signal Rank™ – Top Current Ideas of ValueAct



1 Motorola Solutions / MSI 13,286 38.72 -16% 20,538 >100% 6% 19% 16x 14x 2.6x

2 C.R. Bard / BCR 7,579 87.47 -20% 4,611 0% 5% 10% 14x 12x >9.9x

3 Willis Group / WSH 6,214 35.91 -13% 8,578 0% 5% 7% 13x 11x n/m

4 Immucor / BLUD 1,890 26.81 31% 7,541 0% 11% 5% 22x 21x 4.5x

5 Moody’s / MCO 6,184 27.04 -29% 11,052 34% 5% 7% 11x 10x n/m

6 Adobe Systems / ADBE 11,206 22.69 -28% 4,709 >100% <1% 3% 10x 9x 9.3x

7 Rockwell Collins / COL 6,953 45.25 -27% 2,077 new 1% 2% 11x 10x >9.9x

8 Intercont. Exchange / ICE 7,717 105.05 -16% 525 new <1% 1% 16x 14x >9.9x

9 Fidelity National / FNF 3,533 15.81 0% 5,413 new 2% 2% 10x 13x 2.4x

10 Cephalon / CEPH 6,225 79.87 0% 1,915 0% 2% 4% 10x 15x 8.8x

Top Holdings of ValueAct – By Dollar Value



1 Motorola Solutions / MSI 13,286 38.72 -16% 20,538 >100% 6% 19% 16x 14x 2.6x

2 Valeant Pharma / VRX 11,699 39.66 -24% 15,095 -23% 5% 14% n/a n/a n/m

3 C.R. Bard / BCR 7,579 87.47 -20% 4,611 0% 5% 10% 14x 12x >9.9x

4 Sara Lee / SLE 10,093 17.25 -9% 20,405 -26% 3% 9% 19x 16x >9.9x

5 Willis Group / WSH 6,214 35.91 -13% 8,578 0% 5% 7% 13x 11x n/m

6 Moody’s / MCO 6,184 27.04 -29% 11,052 34% 5% 7% 11x 10x n/m

7 Verisign / VRSN 4,781 28.73 -14% 8,246 -18% 5% 6% 20x 16x n/m

8 Immucor / BLUD 1,890 26.81 31% 7,541 0% 11% 5% 22x 21x 4.5x

9 Gartner / IT 3,107 32.19 -20% 5,080 -28% 5% 4% 23x 18x n/m

10 Cephalon / CEPH 6,225 79.87 0% 1,915 0% 2% 4% 10x 15x 8.8x


Fidelity National / FNF

Intercont. Exchange / ICE

Rockwell Collins / COL

None










Health Care35%

Capital Goods23%

Services13%

Other29%



Weitz Funds (Wally Weitz) Wally Weitz, sometimes called “The Other Oracle of Omaha,” founded Wallace R. Weitz & Co. in 1983 with $10 million under management. The firm has since grown into a $2 billion asset manager best known for the Weitz Value Fund.

MOI Signal Rank™ – Top Current Ideas of Weitz





3 Aon / AON 14,466 44.28 -14% 2,384 2% <1% 6% 13x 11x n/m

4 Intelligent Systems / INS 15 1.71 27% 2,270 0% 25% 0% n/a n/a 3.1x

5 Texas Industries / TXI 868 31.12 -25% 572 >100% 2% 1% n/m n/m 1.3x

6 Cabela’s / CAB 1,423 20.48 -25% 120 >100% <1% 0% 10x 9x 1.3x

7 Redwood Trust / RWT 952 12.10 -20% 6,486 3% 8% 4% 14x 10x .9x

8 Google / GOOG 158,512 490.92 -3% 140 36% <1% 4% 14x 12x 3.6x

9 Liberty Global / LBTYA 10,304 36.64 -19% 2,287 1% <1% 4% 28x 20x n/m

10 XO Group / XOXO 250 8.24 -17% 2,254 1% 7% 1% 59x 33x 2.0x

Top Holdings of Weitz – By Dollar Value



1 Microsoft / MSFT 201,497 24.05 -8% 4,485 -6% <1% 6% 8x 8x 4.6x

2 Aon / AON 14,466 44.28 -14% 2,384 2% <1% 6% 13x 11x n/m

3 Liberty Interactive / LINTA 17,044 13.74 -18% 7,188 -3% <1% 5% 17x 14x n/m


5 Dell / DELL 26,403 14.00 -16% 6,213 -5% <1% 5% 7x 7x >9.9x

6 Liberty Global / LBTYA 10,304 36.64 -19% 2,287 1% <1% 4% 28x 20x n/m


8 Redwood Trust / RWT 952 12.10 -20% 6,486 3% 8% 4% 14x 10x .9x

9 Google / GOOG 158,512 490.92 -3% 140 36% <1% 4% 14x 12x 3.6x

10 ConocoPhillips / COP 87,311 63.59 -15% 1,056 0% <1% 4% 8x 7x 1.3x



CNA Financial / CNA

ITT Educational / ESI

Kenneth Cole / KCP


National CineMedia / NCMI

Newcastle Investment / NCT

Skechers / SKX

Wells Fargo / WFC

Baxter International / BAX

SAIC / SAI










Services38%

Technology18%

Financial17%

Other27%



West Coast (Lance Helfert and Paul Orfalea) Lace Helfert and Paul Orfalea co-founded West Coast Asset Management in 2000. Helfert, who directs the firm’s investments, previously oversaw a $1 billion portfolio at Wilshire Associates. Orfalea is the founder of Kinko’s copy shops. West Coast invests in undervalued equities and follows a concentrated investment approach. MOI Signal Rank™ – Top Current Ideas of West Coast Asset Management



1 American Defense / EAG 6 0.11 38% 10,778 28% 20% 2% n/a n/a 2.6x

2 Live Nation / LYV 1,596 8.44 -26% 494 -1% <1% 5% n/m 29x n/m

3 Sonde Resources / SOQ 157 2.50 -23% 744 -2% 1% 2% n/a n/a 1.0x

4 Broadridge Financial / BR 2,420 19.59 -19% 200 -1% <1% 5% 13x 10x n/m

5 Automatic Data / ADP 23,146 46.32 -12% 126 -2% <1% 7% 17x 15x 3.9x

6 McCormick / MKC 5,305 44.29 -11% 192 -4% <1% 11% 16x 14x n/m

7 Microsoft / MSFT 201,497 24.05 -8% 284 -2% <1% 9% 8x 8x 4.6x

8 Johnson & Johnson / JNJ 173,026 63.14 -5% 159 -2% <1% 13% 13x 12x 6.3x

9 Clorox / CLX 8,533 64.00 -5% 96 -2% <1% 8% 16x 14x n/m

10 Kraft Foods / KFT 59,076 33.45 -5% 136 -5% <1% 6% 15x 13x n/m

Top Holdings of West Coast Asset Management – By Dollar Value



1 Kimberly-Clark / KMB 25,604 65.35 -2% 154 -7% <1% 13% 13x 12x >9.9x

2 Johnson & Johnson / JNJ 173,026 63.14 -5% 159 -2% <1% 13% 13x 12x 6.3x

3 Molson Coors / TAP 8,080 42.87 -4% 227 -8% <1% 12% 12x 11x 4.4x

4 McCormick / MKC 5,305 44.29 -11% 192 -4% <1% 11% 16x 14x n/m

5 Microsoft / MSFT 201,497 24.05 -8% 284 -2% <1% 9% 8x 8x 4.6x

6 Clorox / CLX 8,533 64.00 -5% 96 -2% <1% 8% 16x 14x n/m

7 Constellation Energy / CEG 7,346 36.74 -3% 164 -1% <1% 8% 12x 15x .9x

8 Automatic Data / ADP 23,146 46.32 -12% 126 -2% <1% 7% 17x 15x 3.9x

9 Kraft Foods / KFT 59,076 33.45 -5% 136 -5% <1% 6% 15x 13x n/m

10 Live Nation / LYV 1,596 8.44 -26% 494 -1% <1% 5% n/m 29x n/m


None None











40%

Services19%

Basic Materials14%

Other27%



Wintergreen (David Winters) David Winters joined Mutual Series in 1987 and was mentored by famed value investor Michael Price. Winters became president and CIO of Mutual Series in 2001. He left in 2005 to form Wintergreen Advisers and manage the Wintergreen Fund, a mutual fund that follows an active, value-oriented investment approach.

MOI Signal Rank™ – Top Current Ideas of Wintergreen Advisers



1 Canadian Natural / CNQ 36,678 33.43 -20% 2,237 3% <1% 15% 14x 9x 1.7x


3 Consolidated-Tomoka / CTO 153 26.70 -7% 1,543 0% 27% 8% n/a n/a 1.4x

4 Philip Morris / PM 120,900 68.83 3% 689 0% <1% 9% 14x 13x n/m

5 Google / GOOG 158,512 490.92 -3% 37 >100% <1% 4% 14x 12x 3.6x

6 MasterCard / MA 38,139 300.16 0% 146 >100% <1% 9% 17x 14x >9.9x

7 Norfolk Southern / NSC 21,931 63.06 -16% 125 >100% <1% 2% 12x 11x 2.1x

8 General Dynamics / GD 20,791 57.47 -23% 366 0% <1% 4% 8x 8x n/m

9 Franklin Resources / BEN 24,398 110.63 -16% 500 -2% <1% 11% 12x 11x 3.7x

10 Goldman Sachs / GS 56,528 111.76 -16% 128 -10% <1% 3% 10x 7x .9x

Top Holdings of Wintergreen Advisers – By Dollar Value



1 Canadian Natural / CNQ 36,678 33.43 -20% 2,237 3% <1% 15% 14x 9x 1.7x


3 Franklin Resources / BEN 24,398 110.63 -16% 500 -2% <1% 11% 12x 11x 3.7x

4 Philip Morris / PM 120,900 68.83 3% 689 0% <1% 9% 14x 13x n/m

5 Reynolds American / RAI 20,845 35.76 -3% 1,224 -2% <1% 9% 13x 13x n/m

6 MasterCard / MA 38,139 300.16 0% 146 >100% <1% 9% 17x 14x >9.9x

7 Consolidated-Tomoka / CTO 153 26.70 -7% 1,543 0% 27% 8% n/a n/a 1.4x

8 Coca-Cola / KO 154,068 67.10 0% 341 -5% <1% 5% 17x 16x >9.9x

9 General Dynamics / GD 20,791 57.47 -23% 366 0% <1% 4% 8x 8x n/m

10 Google / GOOG 158,512 490.92 -3% 37 >100% <1% 4% 14x 12x 3.6x


None Barrick Gold / ABX

Potash / POT










Financial34%


26%

Energy15%

Other25%



WL Ross & Co. (Wilbur Ross) Wilbur Ross, born in 1937, has become well-known for restructuring failed companies in a variety of industries. He has been a leveraged buyout and distressed investor in steel, coal, telecom, financial and other companies.

MOI Signal Rank™ – Top Current Ideas of WL Ross & Co.



1 Assured Guaranty / AGO 2,119 11.50 -29% 16,016 0% 9% 20% 3x 4x .5x


3 Sun Bancorp NJ / SNBC 245 2.95 -19% 20,657 11% 25% 7% n/m 49x 1.0x

4 EXCO Resources / XCO 2,622 12.25 -31% 21,000 0% 10% 29% 16x 10x 1.8x

5 Cascade Bancorp / CACB 357 7.56 -25% 11,469 0% 24% 10% 10x >99x 1.7x

6 United Continental / UAL 5,707 17.27 -24% 377 24% <1% 1% 5x 3x n/m

7 Delta Air Lines / DAL 6,100 7.21 -21% 584 14% <1% 0% 8x 4x n/m

8 Hanesbrands / HBI 2,305 23.73 -17% 353 0% <1% 1% 8x 7x >9.9x

9 Buffalo Wild Wings / BWLD 1,039 56.62 -15% 41 new <1% 0% 21x 17x 3.8x

10 Cooper Tire & Rubber / CTB 666 10.69 -46% 259 -39% <1% 0% 8x 6x 1.6x

Top Holdings of WL Ross & Co. – By Dollar Value




2 EXCO Resources / XCO 2,622 12.25 -31% 21,000 0% 10% 29% 16x 10x 1.8x

3 Assured Guaranty / AGO 2,119 11.50 -29% 16,016 0% 9% 20% 3x 4x .5x

4 Cascade Bancorp / CACB 357 7.56 -25% 11,469 0% 24% 10% 10x >99x 1.7x

5 Sun Bancorp NJ / SNBC 245 2.95 -19% 20,657 11% 25% 7% n/m 49x 1.0x

6 Hanesbrands / HBI 2,305 23.73 -17% 353 0% <1% 1% 8x 7x >9.9x

7 United Continental / UAL 5,707 17.27 -24% 377 24% <1% 1% 5x 3x n/m

8 Key Energy Services / KEG 1,794 12.54 -30% 507 -18% <1% 1% 13x 7x 3.9x

9 Delta Air Lines / DAL 6,100 7.21 -21% 584 14% <1% 0% 8x 4x n/m

10 BioScrip / BIOS 327 5.97 -8% 602 -26% 1% 0% 24x 12x n/m


Buffalo Wild Wings / BWLD

Cincinnati Bell / CBB

Manitowoc / MTW

Dynegy / DYN










Financial67%

Energy30%

Consumer Cyclical

1%

Other2%



Screening 900+ Holdings of 50+ Superinvestors

Top 100, by Market Value

Move to Market Enter. Trailing Twelve Months’ P/E (Est.) Tang. 5-Yr. Rev./

Price 52-Week Value Value Rev./ GP/ NI/ FCF This Next Div. Book/ EBIT Empl.

($) Low High ($bn) ($bn) Enter. Value MV Yield Fiscal Year Yield MV Margin ($’000)

Exxon Mobil / XOM 70 -17% 26% 339 346 127% 40% 11% 5% 8x 8x 2.7% 46% 16% 5,263

Apple / AAPL 356 -34% 14% 330 302 33% 13% 7% 9% 13x 11x -- 20% 22% 2,153

Microsoft / MSFT 24 -3% 22% 201 161 44% 34% 11% 9% 8x 8x 2.7% 22% 37% 777

Shell / RDS.A 62 -15% 26% 197 220 192% 43% 14% 0% 7x 6x 5.4% 82% 11% 4,357

IBM / IBM 158 -22% 18% 188 206 51% 24% 8% 6% 12x 11x 1.9% -3% 16% 245

Wal-Mart / WMT 52 -8% 11% 182 231 187% 47% 9% 3% 12x 11x 2.8% 26% 6% 206

Johnson & Johnson / JNJ 63 -10% 8% 173 162 39% 27% 7% 4% 13x 12x 3.6% 16% 26% 551

Petroleo Brasileiro / PBR 27 -10% 57% 171 256 49% 20% 13% -10% n/m n/m 4.6% 85% 23% 1,554

Berkshire Hath. / BRK.A 103K -2% 28% 169 n/m n/m n/m 8% 8% 16x 13x -- 67% 13% 556

Procter & Gamble / PG 61 -6% 11% 168 198 42% 21% 7% 5% 14x 13x 3.4% -14% 20% 650

AT&T / T 28 -6% 14% 166 229 55% 31% 12% 3% 12x 11x 6.1% -12% 13% 486

General Electric / GE 15 -6% 43% 160 541 28% 6% 9% 10% 11x 9x 4.0% 29% 12% 503

Google / GOOG 491 -9% 31% 159 124 27% 18% 6% 5% 14x 12x -- 28% 32% 1,158

Coca-Cola / KO 67 -18% 4% 154 166 25% 16% 8% 1% 17x 16x 2.8% 5% 26% 302

Pfizer / PFE 18 -11% 21% 138 154 44% 34% 6% 11% 8x 8x 4.5% -10% 20% 608

Vodafone / VOD 26 -13% 25% 134 185 41% 13% 10% -3% 9x 8x 5.5% 23% 14% 901

JPMorgan / JPM 34 -2% 41% 134 n/m n/m n/m 15% 5% 7x 6x 2.9% 82% 33% 249

Oracle / ORCL 25 -13% 47% 126 113 32% 24% 7% 8% 10x 9x 1.0% 8% 34% 329

Wells Fargo / WFC 23 -3% 47% 123 n/m n/m n/m 12% 23% 8x 7x 2.1% 60% 45% 191

BP / BP 38 -11% 29% 122 149 236% 41% 17% -10% 6x 5x 4.4% 67% 9% 4,402

Philip Morris / PM 69 -27% 6% 121 136 53% 14% 7% 4% 14x 13x 3.7% -9% 16% 913

TOTAL / TOT 46 -4% 41% 108 136 163% 52% 16% -3% 6x 6x 7.1% 69% 16% 2,373

GlaxoSmithKline / GSK 41 -11% 11% 104 120 38% 28% 5% 0% 11x 10x 5.3% -6% 28% 466

Intel / INTC 19 -8% 25% 101 91 53% 33% 12% 5% 8x 8x 4.4% 33% 22% 502

Schlumberger / SLB 73 -28% 31% 99 103 35% 8% 5% 0% 19x 13x 1.4% 13% 23% 330

Verizon / VZ 35 -16% 12% 98 145 74% 44% 14% 4% 15x 13x 5.6% -64% 13% 548

PepsiCo / PEP 62 -3% 16% 98 121 52% 28% 6% 5% 14x 13x 3.3% -11% 17% 212

Merck / MRK 31 -6% 21% 96 101 47% 30% 5% 4% 8x 8x 4.9% 6% 29% 516

Sanofi-Aventis / SNY 34 -18% 20% 92 111 44% 31% 5% 2% 7x 7x 5.2% -12% 18% 482

McDonald’s / MCD 87 -17% 3% 90 100 25% 10% 6% 2% 17x 15x 2.8% 14% 25% 64

Telefonica / TEF 20 -5% 42% 90 167 54% 37% 15% 3% 8x 8x 10.1% -52% 23% 316

ConocoPhillips / COP 64 -18% 29% 87 102 223% 38% 13% 4% 8x 7x 4.2% 75% 8% 7,625

Anheuser-Busch / BUD 54 -9% 20% 86 126 29% 16% 7% 7% 14x 13x 2.2% -47% 27% 323

Cisco Systems / CSCO 15 -12% 63% 83 55 78% 48% 8% 10% 9x 8x 1.6% 34% 22% 611

Amazon.com / AMZN 179 -32% 27% 81 75 54% 12% 1% 2% 89x 55x -- 7% 4% 932

Qualcomm / QCOM 47 -19% 29% 78 69 20% 14% 6% 3% 15x 13x 1.8% 26% 28% 788

Citigroup / C 27 -2% 92% 78 n/m n/m n/m 13% -2% 7x 5x 0.1% 177% 25% 285

Abbott Labs / ABT 49 -8% 11% 76 86 44% 25% 7% 7% 11x 10x 3.9% -3% 18% 414

Banco Santander / STD 9 -8% 55% 74 n/m n/m n/m 17% -17% n/m n/m 9.9% 57% 40% 229

Bank of America / BAC 7 -9% 120% 71 n/m n/m n/m -22% 134% n/m 5x 0.6% 159% 24% 248

Occidental Petro / OXY 81 -11% 46% 66 68 32% 22% 8% -6% 10x 9x 2.3% 53% 41% 1,960

Visa / V 80 -18% 14% 65 n/m n/m n/m 5% 5% 16x 14x 0.8% 5% 22% 1,312

AstraZeneca / AZN 45 -9% 19% 61 60 55% 45% 13% 8% 6x 7x 6.0% 0% 31% 540

UPS / UPS 62 -2% 25% 61 67 77% 20% 7% 1% 14x 12x 3.4% 9% 9% 128

Walt Disney / DIS 32 -7% 39% 59 69 58% 11% 8% 5% 13x 11x 1.3% 9% 18% 270

Kraft Foods / KFT 33 -14% 9% 59 86 60% 22% 5% -1% 15x 13x 3.5% -45% 12% 410

Goldman Sachs / GS 112 -2% 57% 57 n/m n/m n/m 14% 0% 10x 7x 1.3% 113% -3% 1,156

Comcast / CMCSA 20 -16% 36% 55 92 49% 22% 8% 10% 12x 10x 2.3% -114% 19% 448

3M / MMM 77 0% 28% 55 56 51% 24% 8% 4% 12x 11x 2.9% 15% 23% 357

Altria Group / MO 26 -13% 9% 53 65 37% 14% 6% -1% 13x 12x 5.9% -24% 24% 2,389



Move to Market Enter. Trailing Twelve Months’ P/E (Est.) Tang. 5-Yr. Rev./

Price 52-Week Value Value Rev./ GP/ NI/ FCF This Next Div. Book/ EBIT Empl.

($) Low High ($bn) ($bn) Enter. Value MV Yield Fiscal Year Yield MV Margin ($’000)

American Express / AXP 44 -16% 21% 53 n/m n/m n/m 9% 14% 11x 11x 1.6% 34% 16% 499

Caterpillar / CAT 80 -21% 46% 52 75 68% 18% 8% 4% 12x 9x 2.3% 19% 9% 473

Barrick Gold / ABX 51 -16% 10% 51 61 20% 12% 8% -1% n/m n/m 0.9% 23% 12% 611

Home Depot / HD 32 -15% 24% 51 59 117% 40% 7% 6% 14x 12x 3.1% 34% 9% 363

Novo Nordisk / NVO 106 -24% 25% 51 48 26% 20% 6% 4% 19x 17x 1.8% 13% 27% 389

Hewlett-Packard / HPQ 24 -4% 109% 49 62 208% 51% 19% 16% 5x 4x 2.0% -14% 9% 396

Amgen / AMGN 52 -8% 18% 48 43 36% 30% 9% 11% 10x 9x 2.2% 23% 33% 896

Bristol Myers / BMY 28 -10% 7% 48 45 45% 33% 10% 4% 12x 14x 4.7% 17% 23% 754

UnitedHealth / UNH 43 -29% 23% 47 n/m n/m n/m 11% 12% 10x 9x 1.5% 2% 9% 1,131

Suncor Energy / SU 30 -1% 64% 46 54 69% 36% 8% 2% 10x 8x 1.6% 74% 15% 3,129

Diageo / DEO 73 -11% 17% 46 58 28% 16% 7% 1% 14x 13x 3.4% -6% 28% 692

ABB / ABB 19 -5% 42% 45 44 80% 24% 7% 1% 12x 10x 3.5% 16% 13% 302

Baidu.com / BIDU 127 -40% 31% 44 43 4% 3% 2% 0% 44x 29x -- 4% 37% 152

CVS Caremark / CVS 32 -17% 22% 44 52 193% 39% 8% 8% 12x 10x 1.5% 4% 6% 503

Potash / POT 51 -13% 26% 43 48 17% 8% 6% 2% n/m n/m 0.6% 18% 34% 1,443

AIG / AIG 22 -2% 138% 42 n/m n/m n/m 24% 225% 6x 7x -- 220% 1,189

EMC / EMC 20 -12% 42% 42 40 46% 28% 5% 7% 14x 12x -- 10% 12% 383

Union Pacific / UNP 86 -18% 26% 42 50 37% 27% 7% 4% 13x 11x 2.2% 44% 23% 404

Colgate Palmolive / CL 85 -14% 5% 41 46 35% 21% 6% 3% 17x 15x 2.7% -3% 21% 411

News Corp. / NWSA 16 -23% 18% 41 44 76% 28% 8% 7% 12x 9x 1.2% 15% 7% 655

Eli Lilly / LLY 35 -4% 14% 41 41 58% 47% 12% 10% 8x 9x 5.6% 23% 18% 629

Freeport-McMoRan / FCX 42 -22% 46% 40 39 57% 31% 18% 10% 7x 7x 2.4% 36% 21% 750

U.S. Bancorp / USB 21 -1% 41% 39 n/m n/m n/m 10% 24% 9x 8x 2.4% 45% 40% 204

Apache / APA 97 -12% 38% 39 47 32% 26% 10% 6% 8x 8x 0.6% 63% 30% 3,306

MasterCard / MA 300 -36% 13% 38 n/m n/m n/m 6% 5% 17x 14x 0.2% 10% 23% 1,078

Teva Pharma / TEVA 39 -7% 47% 37 42 40% 22% 9% 11% 8x 7x 2.2% 5% 17% 404

Nike / NKE 79 -13% 20% 37 33 64% 29% 6% 2% 16x 14x 1.6% 25% 13% 549

Canadian Natural / CNQ 33 -10% 56% 37 45 28% 16% 3% -1% 14x 9x 1.1% 59% 29% 2,740

Monsanto / MON 66 -29% 17% 35 36 32% 16% 5% 5% 23x 19x 1.8% 20% 20% 537

eBay / EBAY 27 -18% 30% 35 33 30% 22% 5% 7% 14x 12x -- 19% 19% 568

Halliburton / HAL 38 -28% 52% 35 37 57% 11% 7% 0% 11x 8x 0.9% 29% 20% 351

Santander Brasil / BSBR 9 -7% 79% 35 n/m n/m n/m 14% -95% 9x 7x 7.8% 77% 565

Target / TGT 50 -9% 22% 34 51 134% 41% 9% 4% 12x 11x 2.4% 44% 7% 193

Brookfield Asset / BAM 28 -14% 21% 34 67 22% 6% 13% -1% n/m n/m 1.8% 27% 9% 830

Accenture / ACN 47 -23% 34% 34 28 92% 28% 7% 6% 14x 12x 1.9% 8% 12% 117

Enterprise Products / EPD 39 -29% 12% 34 48 82% 5% 5% -17% 20x 19x 6.1% 22% 6% 7,702

General Motors / GM 22 -2% 78% 33 23 640% 79% 21% 7% 5x 5x -- -31% 704

Medtronic / MDT 31 -4% 38% 33 41 39% 30% 9% 7% 9x 8x 3.1% 11% 23% 354

MetLife / MET 31 0% 57% 33 n/m n/m n/m 8% 28% 6x 5x 2.4% 125% 6% 884

Anadarko Petroleum / APC 66 -32% 29% 33 43 28% 24% 3% 0% 19x 15x 0.5% 48% 29% 2,766

Costco Wholesale / COST 74 -27% 13% 33 28 298% 38% 5% 4% 22x 19x 1.3% 37% 3% 1,035

Emerson Electric / EMR 42 -3% 47% 32 35 67% 27% 7% 5% 13x 11x 3.3% -1% 14% 184

Walgreen / WAG 34 -22% 32% 31 31 230% 65% 8% 8% 13x 11x 2.6% 41% 6% 402

DIRECTV / DTV 42 -12% 27% 31 42 61% 30% 8% 7% 12x 10x -- -22% 14% 1,102

Morgan Stanley / MS 16 -4% 94% 31 n/m n/m n/m 14% 20% 14x 6x 1.3% 152% -192% 617

Barclays / BCS 10 0% 119% 30 n/m n/m n/m 20% 169% 6x 3x 3.5% 233% 27% 230

BCE / BCE 39 -21% 5% 30 48 39% 22% 8% 0% 12x 12x 5.5% -14% 19% 375

Baxter International / BAX 52 -18% 21% 29 32 43% 21% 7% 4% 12x 11x 2.4% 14% 19% 282

Texas Instruments / TXN 25 -8% 48% 29 26 55% 29% 11% 6% 11x 10x 2.1% 34% 24% 497

Mosaic Company / MOS 63 -14% 42% 28 25 40% 12% 9% 4% 11x 10x 0.3% 35% 22% 1,325

Abbreviations: MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, FCF = free cash flow.



Top 100, by This FY P/E (consensus estimates) Price to Market Enter. Trailing 12 Months’ P/E (Est.) Greenblatt’s Tang. 5-Yr.

52-Week Value Value Rev./ GP/ FCF This Next TTM EBIT/ Div. Book/ EBIT

Low High ($mn) ($mn) Enter. Value Yield Fiscal Year EV Cap. Yield MV Margin

Corinthian / COCO -1% 225% 191 355 543% 226% -37% 2x 10x 49% 73% -- 94% 7%

Newcastle Investment / NCT -48% 92% 366 3,573 8% 4% 16% 3x 2x 3% 234% 8.7% 29% -94%

Assured Guaranty / AGO -16% 94% 2,119 n/m n/m n/m 7% 3x 4x 6% 15% 1.6% 186% --

DepoMed / DEPO -32% 108% 277 163 89% 85% 30% 4x n/m 34% n/m -- 45% -89%

McClatchy / MNI -17% 230% 145 1,827 72% 37% 85% 4x 5x 12% 30% -- <0% -12%

Warner Chilcott / WCRX -1% 88% 4,134 7,945 36% 31% -36% 4x 4x 9% 454% -- <0% 7%

Gannett / GCI -6% 88% 2,420 4,276 125% 56% 26% 5x 4x 24% 57% 3.2% <0% -5%

Net1 UEPS / UEPS -14% 105% 319 354 89% 62% 9% 5x 4x 22% 404% -- <0% 39%

Hewlett-Packard / HPQ -4% 109% 48,950 61,693 208% 51% 16% 5x 4x 21% 115% 2.0% <0% 9%

Tesoro / TSO -44% 50% 2,757 3,873 654% 80% 11% 5x 5x 22% 15% -- 120% 3%

United Continental / UAL -8% 72% 5,707 10,726 297% 72% 30% 5x 3x 19% 29% -- <0% 21%

TRW Automotive / TRW -7% 79% 4,381 4,935 314% 38% 13% 5x 5x 27% 70% -- 15% 3%

Whirlpool / WHR -1% 63% 4,314 5,990 312% 44% -2% 5x 6x 16% 29% 3.5% 21% 5%

PDL BioPharma / PDLI -19% 16% 808 1,094 34% 0% 2% 5x 4x 31% n/m 10.4% <0% 79%

General Motors / GM -2% 78% 33,253 22,896 640% 79% 7% 5x 5x 26% 616% -- <0% --

Cliffs Natural / CLF -18% 52% 9,877 13,600 42% 17% 14% 5x 4x 14% 29% 1.7% 42% 20%

Trina Solar / TSL -2% 145% 1,033 1,129 183% 56% 21% 5x 5x 38% 41% -- 115% 15%

Valero Energy / VLO -18% 65% 10,768 14,284 706% 61% 22% 5x 5x 18% 10% 1.1% 146% 4%

BofI Holding / BOFI -18% 29% 136 n/m n/m n/m 2% 5x 4x n/m n/m -- 101% 35%

Oshkosh / OSK -1% 151% 1,460 2,178 348% 57% 19% 5x 8x 31% 96% -- <0% 5%

Western Refining / WNR -74% 41% 1,405 2,289 363% 25% 24% 5x 5x 15% 16% -- 52% 2%

Chimera Invest. / CIM -13% 45% 3,081 n/m n/m n/m -8% 5x 6x 7% 23% 17.3% 112% --

Atlas Pipeline / APL -42% 33% 1,525 1,883 58% 9% -1% 5x 16x 2% 3% 6.6% 76% -14%

Supervalu / SVU -3% 83% 1,443 7,957 466% 104% 29% 5x 5x 11% 13% 5.1% <0% 1%

BP / BP -11% 29% 121,987 148,715 236% 41% -10% 6x 5x 23% 30% 4.4% 67% 9%

Capital One / COF -13% 36% 18,972 n/m n/m n/m 38% 6x 7x n/m n/m 0.5% 76% 37%

Flextronics / FLEX -6% 65% 3,767 4,423 671% 36% 11% 6x 5x 16% 27% -- 54% -3%

Barclays / BCS 0% 119% 30,301 n/m n/m n/m 169% 6x 3x n/m n/m 3.5% 233% 27%

Hartford Financial / HIG -2% 75% 7,893 n/m n/m n/m 35% 6x 4x 71% n/m 2.3% 254% -4%

Computer Sciences / CSC -2% 110% 4,174 5,356 302% 57% 10% 6x 6x 18% 21% 3.0% 53% 6%

Avnet / AVT -10% 54% 3,782 4,623 574% 67% 3% 6x 6x 22% 33% -- 81% 2%

MetLife / MET 0% 57% 32,920 n/m n/m n/m 28% 6x 5x 23% 94% 2.4% 125% 6%

Seagate / STX -2% 82% 4,229 4,590 239% 47% 7% 6x 4x 18% 32% 7.1% 58% 2%

TOTAL / TOT -4% 41% 108,119 135,520 163% 52% -3% 6x 6x 26% 36% 7.1% 69% 16%

Pennsylvania REIT / PEI 0% 78% 541 2,724 17% 9% 6% 6x 6x 2% 2% 6.2% 115% 17%

Marathon Oil / MRO -28% 39% 17,972 18,283 338% 62% 19% 6x 6x 33% 24% 2.4% 90% 9%

Spansion / CODE -3% 53% 875 1,010 122% 24% 2% 6x 5x n/m n/m -- 30% -24%

Rubicon Tech / RBCN -12% 145% 280 197 66% 41% -8% 6x 9x 34% 61% -- 84% -3%

AstraZeneca / AZN -9% 19% 61,011 59,824 55% 45% 8% 6x 7x 21% 292% 6.0% 0% 31%

Discover Financial / DFS -40% 22% 12,501 n/m n/m n/m 29% 6x 8x n/m n/m 1.0% 57% 12%

Navistar / NAV -6% 99% 2,610 6,308 201% 40% 27% 6x 5x 10% 20% -- <0% 1%

AIG / AIG -2% 138% 42,059 n/m n/m n/m 225% 6x 7x 13% 30% -- 220% --

CVR Energy / CVI -72% 16% 2,118 1,961 244% 31% 14% 7x 7x 21% 32% -- 44% 5%

Citigroup / C -2% 92% 78,114 n/m n/m n/m -2% 7x 5x n/m n/m 0.1% 177% 25%

ON Semi / ONNN -10% 78% 3,008 3,425 86% 29% 9% 7x 6x 9% 25% -- 33% 9%

Western Digital / WDC -13% 59% 6,159 2,963 322% 60% 14% 7x 6x 27% 36% -- 86% 10%

KKR & Co. / KKR -12% 73% 7,568 n/m n/m n/m 122% 7x 5x n/m n/m 6.9% 20% --

MEMC Electronic / WFR -15% 158% 1,341 2,094 135% 24% -45% 7x 5x 5% 5% -- 143% 23%

Air Transport / ATSG -1% 94% 286 563 127% 47% -8% 7x 5x 15% 13% -- 77% 6%

Veeco / VECO -12% 67% 1,415 839 131% 62% 9% 7x 9x 37% 257% -- 53% 3%



Price to Market Enter. Trailing 12 Months’ P/E (Est.) Greenblatt’s Tang. 5-Yr.

52-Week Value Value Rev./ GP/ FCF This Next TTM EBIT/ Div. Book/ EBIT

Low High ($mn) ($mn) Enter. Value Yield Fiscal Year EV Cap. Yield MV Margin

Xerox / XRX 0% 65% 10,273 18,834 119% 40% 11% 7x 6x 10% 35% 2.3% 9% 4%

Annaly Capital / NLY -21% 6% 17,240 96,550 3% 2% 44% 7x 7x 2% 3% 14.6% 79% 31%

ITT Educational / ESI -29% 37% 1,891 1,735 91% 59% 25% 7x 9x 34% n/m -- 5% 32%

Goodyear Tire / GT -16% 73% 2,659 6,659 316% 56% -39% 7x 5x 13% 10% -- 4% --

Dana Holding / DAN -13% 70% 1,674 2,569 265% 31% -2% 7x 6x 14% 18% -- 28% -3%

Solutia / SOA -11% 81% 1,832 3,025 68% 21% 11% 7x 6x 12% 33% -- <0% 19%

Kronos / KRO -28% 72% 2,319 2,679 64% 20% 3% 7x 5x 13% 41% 3.0% 37% 6%

JPMorgan / JPM -2% 41% 133,932 n/m n/m n/m 5% 7x 6x n/m n/m 2.9% 82% 33%

Walter Energy / WLT -11% 94% 4,614 6,879 30% 14% 8% 7x 6x 9% 18% 0.7% 38% 25%

Best Buy / BBY -3% 90% 8,996 8,948 564% 141% 14% 7x 6x 26% 50% 2.7% 39% 5%

Quad Graphics / QUAD -4% 155% 916 2,505 190% 43% -14% 7x 5x 12% 13% 4.1% 37% --

SLM Corp. / SLM -14% 34% 6,547 n/m n/m n/m 47% 7x 7x 1% 3% 3.1% 60% 9%

Chinacast Edu. / CAST -14% 70% 230 133 65% 32% 14% 7x 6x 22% 71% -- 63% 29%

Dell / DELL -19% 26% 26,403 19,534 316% 63% 13% 7x 7x 23% n/m -- 4% 5%

Sanofi-Aventis / SNY -18% 20% 91,851 110,968 44% 31% 2% 7x 7x 9% 52% 5.2% <0% 18%

Health Net / HNT -4% 59% 1,913 n/m n/m n/m -9% 7x 7x 22% n/m -- 45% 2%

Central European / CEDC -4% 414% 397 1,661 45% 19% -15% 7x 5x 4% 11% -- <0% 18%

Ameriprise / AMP 0% 67% 9,217 n/m n/m n/m 9% 7x 6x 13% n/m 2.4% 114% 9%

Freeport-McMoRan / FCX -22% 46% 39,754 38,918 57% 31% 10% 7x 7x 29% 60% 2.4% 36% 21%

Federal-Mogul / FDML -5% 83% 1,471 3,287 196% 31% 1% 7x 6x 10% 11% -- <0% 2%

Owens Illinois / OI 0% 102% 2,708 6,788 105% 20% 3% 7x 6x 11% 21% -- <0% 5%

Aeroflex / ARX -12% 148% 696 1,355 54% 29% -5% 7x 7x 6% 27% -- <0% 0%

Shell / RDS.A -15% 26% 196,636 219,670 192% 43% 0% 7x 6x n/m n/m 5.4% 82% 11%

L-3 Comms / LLL 0% 41% 6,687 10,275 150% 16% 14% 7x 7x 16% 60% 2.9% <0% 10%

Boise / BZ -17% 87% 641 1,168 193% 42% 12% 7x 6x 19% 15% -- 111% --

Symetra Financial / SYA -16% 42% 1,212 n/m n/m n/m 65% 7x 7x n/m n/m 2.3% 216% 12%

Corning / GLW -8% 64% 22,499 18,416 40% 18% 7% 7x 7x 8% 16% 1.4% 91% 19%

RadioShack / RSH -1% 100% 1,164 1,274 335% 147% 7% 7x 6x 23% 34% 2.1% 66% 7%

HCA / HCA -12% 84% 9,966 34,747 91% 76% 0% 7x 7x 12% 29% -- <0% 6%

Timken / TKR -5% 74% 3,255 3,143 150% 39% -7% 7x 6x 20% 28% 2.4% 56% 6%

R.R. Donnelley / RRD -1% 55% 2,584 6,298 165% 39% 6% 7x 7x 11% 24% 7.6% <0% 4%

Power-One / PWER -1% 95% 687 601 197% 75% 18% 7x 6x 54% 162% -- 51% 0%

Macquarie Infrastr. / MIC -43% 30% 1,017 2,102 44% 18% 6% 7x 7x 3% 13% 3.6% <0% 2%

SanDisk / SNDK 0% 65% 7,775 6,840 76% 35% 16% 7x 7x 22% 353% -- 76% 1%

Lear / LEA -14% 39% 4,256 3,182 414% 36% 9% 8x 7x 21% 64% 1.2% 50% --

GameStop / GME -18% 33% 3,051 3,075 313% 85% 16% 8x 7x 21% 89% -- 30% 7%

Aetna / AET -26% 30% 13,231 n/m n/m n/m 9% 8x 7x 19% 968% 1.7% 27% 8%

Alliance One / AOI -3% 59% 264 1,429 138% 18% -38% 8x n/m 10% 11% -- 105% 7%

Torchmark / TMK -11% 29% 3,703 n/m n/m n/m 23% 8x 7x 32% 882% 1.4% 91% 21%

ConocoPhillips / COP -18% 29% 87,311 102,367 223% 38% 4% 8x 7x 22% 28% 4.2% 75% 8%

Hess / HES -9% 61% 18,452 21,799 174% 48% -5% 8x 7x 23% 25% 0.7% 89% 10%

Popular / BPOP -15% 80% 2,038 n/m n/m n/m -13% 8x 6x n/m n/m -- 158% 18%

Teva Pharma / TEVA -7% 47% 36,813 42,034 40% 22% 11% 8x 7x 10% 53% 2.2% 5% 17%

Bridgepoint Edu. / BPI -39% 46% 1,104 816 105% 77% 19% 8x 8x 34% n/m -- 27% 10%

Telefonica / TEF -5% 42% 89,678 167,370 54% 37% 3% 8x 8x 14% 65% 10.1% <0% 23%

CNO Financial / CNO -20% 44% 1,449 n/m n/m n/m 61% 8x 7x 47% 314% -- 315% 3%

Delta Air Lines / DAL -11% 102% 6,100 16,939 199% 56% 19% 8x 4x 14% 18% -- <0% -11%

Royal Caribbean / RCL 0% 124% 4,854 12,907 55% 27% -4% 8x 7x n/m n/m 1.8% 156% 13%

New Oriental Edu. / EDU -21% 21% 4,224 3,610 15% 9% 0% 8x 6x n/m n/m -- 13% 20%

Applied Materials / AMAT -5% 56% 14,264 11,161 98% 39% 10% 8x 8x 21% 101% 3.0% 46% 14%

Abbreviations: MV = market value, EV = enterprise value, Cap. = capital employed, Rev. = revenue, GP = gross profit, NI = net income, FCF = free cash flow.



Top 100, by Next FY P/E (consensus estimates) Price to Market Enter. Trailing 12 Months’ P/E (Est.) Tang. 5-Yr. Rev./

52-Week Value Value Rev./ GP/ FCF This Next Div. Book/ EBIT Empl.

Low High ($mn) ($mn) Enter. Value Yield Fiscal Year Yield MV Margin ($’000)

Newcastle Investment / NCT -48% 92% 366 3,573 8% 4% 16% 3x 2x 8.7% 29% -94% n/m

Doral Financial / DRL -24% 101% 172 n/m n/m n/m 150% 34x 3x -- 228% 20% 286

United Continental / UAL -8% 72% 5,707 10,726 297% 72% 30% 5x 3x -- <0% 21% 390

Pinnacle Airlines / PNCL -10% 160% 64 770 157% 34% 125% 16x 3x -- 113% 9% 186

Barclays / BCS 0% 119% 30,301 n/m n/m n/m 169% 6x 3x 3.5% 233% 27% 230

Meritor / MTOR -2% 210% 690 1,523 289% 31% -2% 12x 4x -- <0% 2% 314

BofI Holding / BOFI -18% 29% 136 n/m n/m n/m 2% 5x 4x -- 101% 35% 981

Assured Guaranty / AGO -16% 94% 2,119 n/m n/m n/m 7% 3x 4x 1.6% 186% -- 1,849

Delta Air Lines / DAL -11% 102% 6,100 16,939 199% 56% 19% 8x 4x -- <0% -11% 409

Gentium / GENT -32% 106% 100 90 41% 32% 6% 10x 4x -- 21% -213% 605

Warner Chilcott / WCRX -1% 88% 4,134 7,945 36% 31% -36% 4x 4x -- <0% 7% 1,046

US Airways / LCC -4% 139% 833 2,928 429% 178% 48% 47x 4x -- <0% 0% 401

Net1 UEPS / UEPS -14% 105% 319 354 89% 62% 9% 5x 4x -- <0% 39% 144

PDL BioPharma / PDLI -19% 16% 808 1,094 34% 0% 2% 5x 4x 10.4% <0% 79% 46,000

Seagate Technology / STX -2% 82% 4,229 4,590 239% 47% 7% 6x 4x 7.1% 58% 2% 208

Gannett / GCI -6% 88% 2,420 4,276 125% 56% 26% 5x 4x 3.2% <0% -5% 164

Genworth Financial / GNW -16% 136% 3,067 n/m n/m n/m 53% 13x 4x -- 405% 3% 1,612

Hewlett-Packard / HPQ -4% 109% 48,950 61,693 208% 51% 16% 5x 4x 2.0% <0% 9% 396

Take-Two / TTWO -27% 61% 949 809 135% 54% 9% 68x 4x -- 29% -5% 517

Cliffs Natural / CLF -18% 52% 9,877 13,600 42% 17% 14% 5x 4x 1.7% 42% 20% 877

Hartford Financial / HIG -2% 75% 7,893 n/m n/m n/m 35% 6x 4x 2.3% 254% -4% 912

Flextronics / FLEX -6% 65% 3,767 4,423 671% 36% 11% 6x 5x -- 54% -3% 169

McClatchy / MNI -17% 230% 145 1,827 72% 37% 85% 4x 5x -- <0% -12% 169

Bank of America / BAC -9% 120% 70,806 n/m n/m n/m 134% n/m 5x 0.6% 159% 24% 248

Trina Solar / TSL -2% 145% 1,033 1,129 183% 56% 21% 5x 5x -- 115% 15% 161

General Motors / GM -2% 78% 33,253 22,896 640% 79% 7% 5x 5x -- <0% -- 704

Goodyear Tire / GT -16% 73% 2,659 6,659 316% 56% -39% 7x 5x -- 4% -- 292

Valero Energy / VLO -18% 65% 10,768 14,284 706% 61% 22% 5x 5x 1.1% 146% 4% 5,039

Central European / CEDC -4% 414% 397 1,661 45% 19% -15% 7x 5x -- <0% 18% 182

Navistar / NAV -6% 99% 2,610 6,308 201% 40% 27% 6x 5x -- <0% 1% 803

Accuride / ACW -1% 137% 326 614 141% 13% -8% 15x 5x -- <0% -7% 273

Quad Graphics / QUAD -4% 155% 916 2,505 190% 43% -14% 7x 5x 4.1% 37% -- 227

MBIA / MBI -4% 136% 1,246 n/m n/m n/m -140% n/m 5x -- 149% -- 0

Greenlight Re / GLRE -4% 40% 780 n/m n/m n/m 6% 26x 5x -- 96% -- 24,765

TravelCenters / TA -30% 216% 112 71 9791% 1395% -135% 10x 5x -- 255% -1% 458

Kronos Worldwide / KRO -28% 72% 2,319 2,679 64% 20% 3% 7x 5x 3.0% 37% 6% 700

TRW Automotive / TRW -7% 79% 4,381 4,935 314% 38% 13% 5x 5x -- 15% 3% 253

Citizens Republic / CRBC -21% 43% 282 n/m n/m n/m 60% n/m 5x -- 132% 18% 217

Citigroup / C -2% 92% 78,114 n/m n/m n/m -2% 7x 5x 0.1% 177% 25% 285

Western Refining / WNR -74% 41% 1,405 2,289 363% 25% 24% 5x 5x -- 52% 2% 2,814

Flagstone Re / FSR -4% 75% 527 n/m n/m n/m 5% n/m 5x 2.1% 171% 20% 2,165

Spansion / CODE -3% 53% 875 1,010 122% 24% 2% 6x 5x -- 30% -24% 361

BP / BP -11% 29% 121,987 148,715 236% 41% -10% 6x 5x 4.4% 67% 9% 4,402

Supervalu / SVU -3% 83% 1,443 7,957 466% 104% 29% 5x 5x 5.1% <0% 1% 265

KKR & Co. / KKR -12% 73% 7,568 n/m n/m n/m 122% 7x 5x 6.9% 20% -- 848

Air Transport / ATSG -1% 94% 286 563 127% 47% -8% 7x 5x -- 77% 6% 399

MEMC Electronic / WFR -15% 158% 1,341 2,094 135% 24% -45% 7x 5x -- 143% 23% 506

MetLife / MET 0% 57% 32,920 n/m n/m n/m 28% 6x 5x 2.4% 125% 6% 884

Tesoro / TSO -44% 50% 2,757 3,873 654% 80% 11% 5x 5x -- 120% 3% 4,778

Republic Airways / RJET -1% 194% 157 2,407 115% 33% 113% n/m 5x -- 279% 15% 280



Price to Market Enter. Trailing 12 Months’ P/E (Est.) Tang. 5-Yr. Rev./



Popular / BPOP -15% 80% 2,038 n/m n/m n/m -13% 8x 6x -- 158% 18% 248

Avnet / AVT -10% 54% 3,782 4,623 574% 67% 3% 6x 6x -- 81% 2% 1,508

Freescale Semi / FSL -20% 77% 2,907 9,564 50% 20% -1% 10x 6x -- <0% -38% 250

ON Semiconductor / ONNN -10% 78% 3,008 3,425 86% 29% 9% 7x 6x -- 33% 9% 207

Owens Illinois / OI 0% 102% 2,708 6,788 105% 20% 3% 7x 6x -- <0% 5% 296

Computer Sciences / CSC -2% 110% 4,174 5,356 302% 57% 10% 6x 6x 3.0% 53% 6% 174

TOTAL / TOT -4% 41% 108,119 135,520 163% 52% -3% 6x 6x 7.1% 69% 16% 2,373

Cooper Tire & Rubber / CTB -1% 159% 666 1,010 360% 39% -16% 8x 6x 3.9% 63% 0% 282

Pennsylvania REIT / PEI 0% 78% 541 2,724 17% 9% 6% 6x 6x 6.2% 115% 17% 643

Walter Energy / WLT -11% 94% 4,614 6,879 30% 14% 8% 7x 6x 0.7% 38% 25% 512

Dana Holding / DAN -13% 70% 1,674 2,569 265% 31% -2% 7x 6x -- 28% -3% 303

Morgan Stanley / MS -4% 94% 30,896 n/m n/m n/m 20% 14x 6x 1.3% 152% -192% 617

Solutia / SOA -11% 81% 1,832 3,025 68% 21% 11% 7x 6x -- <0% 19% 622

Chimera Investment / CIM -13% 45% 3,081 n/m n/m n/m -8% 5x 6x 17.3% 112% -- n/m

Federal-Mogul / FDML -5% 83% 1,471 3,287 196% 31% 1% 7x 6x -- <0% 2% 151

Energy XXI / EXXI -28% 58% 1,803 2,908 30% 21% 5% 9x 6x -- 53% -6% 4,620

New Oriental Edu. / EDU -21% 21% 4,224 3,610 15% 9% 0% 8x 6x -- 13% 20% 57

Western Digital / WDC -13% 59% 6,159 2,963 322% 60% 14% 7x 6x -- 86% 10% 146

Xerox / XRX 0% 65% 10,273 18,834 119% 40% 11% 7x 6x 2.3% 9% 4% 168

Audiovox / VOXX -3% 54% 135 194 308% 72% 27% 8x 6x -- 113% -1% 585

Energy Partners / EPL -17% 59% 468 596 45% 34% -28% 8x 6x -- 104% -10% 2,711

Ameriprise Financial / AMP 0% 67% 9,217 n/m n/m n/m 9% 7x 6x 2.4% 114% 9% 964

JPMorgan Chase / JPM -2% 41% 133,932 n/m n/m n/m 5% 7x 6x 2.9% 82% 33% 249

Royal Dutch Shell / RDS.A -15% 26% 196,636 219,670 192% 43% 0% 7x 6x 5.4% 82% 11% 4,357

Marathon Oil / MRO -28% 39% 17,972 18,283 338% 62% 19% 6x 6x 2.4% 90% 9% 2,080

Boise / BZ -17% 87% 641 1,168 193% 42% 12% 7x 6x -- 111% -- 450

Power-One / PWER -1% 95% 687 601 197% 75% 18% 7x 6x -- 51% 0% 342

Whirlpool / WHR -1% 63% 4,314 5,990 312% 44% -2% 5x 6x 3.5% 21% 5% 263

Cowen / COWN -8% 55% 378 n/m n/m n/m 25% 18x 6x -- 110% -32% 444

RadioShack / RSH -1% 100% 1,164 1,274 335% 147% 7% 7x 6x 2.1% 66% 7% 129

Timken / TKR -5% 74% 3,255 3,143 150% 39% -7% 7x 6x 2.4% 56% 6% 236

Fifth Third Bancorp / FITB 0% 70% 8,536 n/m n/m n/m 58% 8x 6x 2.6% 104% 21% 207

Swift Transportation / SWFT -1% 143% 893 2,537 124% 61% -22% 9x 6x -- <0% 3% 175

Regions Financial / RF -1% 110% 4,859 n/m n/m n/m 82% 28x 6x 1.0% 149% 28% 164

Chinacast Education / CAST -14% 70% 230 133 65% 32% 14% 7x 6x -- 63% 29% 54

Best Buy / BBY -3% 90% 8,996 8,948 564% 141% 14% 7x 6x 2.7% 39% 5% 280

Terex / TEX -1% 181% 1,500 1,970 261% 37% -43% 27x 7x -- 111% 2% 324

Health Net / HNT -4% 59% 1,913 n/m n/m n/m -9% 7x 7x -- 45% 2% 1,632

Royal Caribbean / RCL 0% 124% 4,854 12,907 55% 27% -4% 8x 7x 1.8% 156% 13% 124

R.R. Donnelley / RRD -1% 55% 2,584 6,298 165% 39% 6% 7x 7x 7.6% <0% 4% 177

Aeroflex / ARX -12% 148% 696 1,355 54% 29% -5% 7x 7x -- <0% 0% 247

Symetra Financial / SYA -16% 42% 1,212 n/m n/m n/m 65% 7x 7x 2.3% 216% 12% 1,785

Murphy Oil / MUR -1% 61% 9,422 9,617 298% 60% -2% 8x 7x 2.3% 93% 7% 8,279

Corning / GLW -8% 64% 22,499 18,416 40% 18% 7% 7x 7x 1.4% 91% 19% 278

SLM Corp. / SLM -14% 34% 6,547 n/m n/m n/m 47% 7x 7x 3.1% 60% 9% 782

HCA / HCA -12% 84% 9,966 34,747 91% 76% 0% 7x 7x -- <0% 6% 216

Commercial Metals / CMC -2% 69% 1,244 2,213 337% 27% -11% 54x 7x 4.5% 100% 3% 646

Spirit AeroSystems / SPR -2% 81% 2,090 3,131 147% 17% -12% 10x 7x -- 90% 7% 364

Rock-Tenn / RKT -1% 69% 3,315 6,747 55% 11% 11% 9x 7x 1.7% 26% 9% 360

Goldman Sachs / GS -2% 57% 56,528 n/m n/m n/m 0% 10x 7x 1.3% 113% -3% 1,156




Top 100, by Trailing Gross Profit to Enterprise Value Price to Market Enter. Trailing 12 Months’ P/E (Est.) Tang. 5-Yr. Rev./




Winn-Dixie Stores / WINN -2% 66% 338 209 3350% 946% -4% n/m n/m -- 191% 2% 318

Richardson Electron. / RELL -37% 14% 232 9 1869% 542% 0% 35x 24x 1.5% 97% -4% 539

Ambassadors Group / EPAX 0% 93% 113 23 318% 280% 0% 21x 14x 3.8% 63% 29% 342

Frozen Food Express / FFEX -17% 54% 57 72 532% 268% -51% n/m n/m -- 119% -2% 167

Office Depot / ODP 0% 180% 625 1,339 862% 250% -24% n/m 15x -- 96% -1% 289

Corinthian Colleges / COCO -1% 225% 191 355 543% 226% -37% 2x 10x -- 94% 7% 168

Tellabs / TLAB 0% 119% 1,346 288 519% 214% -2% n/m 123x 2.2% 116% -5% 438

Zale / ZLC -61% 89% 117 456 375% 190% -38% n/m n/m -- 120% -2% 134

MRV Communications / MRVC -15% 44% 208 62 446% 182% -13% 44x 15x -- 97% 0% 369

Telecom Argentina / TEO -17% 21% 2,129 1,831 217% 180% 5% 8x 7x 7.1% 75% 17% 252

US Airways / LCC -4% 139% 833 2,928 429% 178% 48% 47x 4x -- <0% 0% 401

MedCath / MDTH -43% 17% 261 154 211% 164% -2% 71x 75x -- 119% -1% 194

hhgregg / HGG -15% 155% 401 399 520% 157% 7% 9x 8x -- 74% 4% 426

Talbots / TLB -16% 387% 195 273 437% 156% 3% n/m n/m -- 38% 1% 343

Aviat Networks / AVNW -4% 133% 169 88 514% 150% -30% n/m 13x -- 110% -17% 327

RadioShack / RSH -1% 100% 1,164 1,274 335% 147% 7% 7x 6x 2.1% 66% 7% 129

Best Buy / BBY -3% 90% 8,996 8,948 564% 141% 14% 7x 6x 2.7% 39% 5% 280

Coca-Cola FEMSA / KOF -24% 7% 2,548 2,984 291% 134% 5% 18x 16x 2.2% 232% 15% 127

Sears Holdings / SHLD -1% 80% 5,618 8,599 498% 134% -11% n/m n/m -- 63% 2% 137

Blue Coat Systems / BCSI -2% 157% 544 281 169% 131% 16% 20x 17x -- 32% 5% 356

Skechers / SKX -8% 102% 720 607 316% 127% -27% n/m 13x -- 125% 7% 763

Collective Brands / PSS -4% 152% 585 978 344% 120% 15% 10x 7x -- 26% 4% 258

Cracker Barrel / CBRL -3% 48% 897 1,410 173% 119% 6% 10x 9x 2.3% 29% 7% 36

AnnTaylor Stores / ANN -31% 50% 1,130 984 214% 118% 5% 12x 10x -- 35% 1% 568

Nokia / NOK -17% 103% 21,842 15,851 387% 113% 2% 19x 16x 9.8% 32% 9% 442

Kenneth Cole / KCP -6% 94% 207 168 274% 111% -6% 37x 15x -- 60% -1% 657

Scholastic / SCHL -7% 34% 744 929 205% 110% 12% 13x 10x 1.7% 49% 7% 214

Overstock.com / OSTK -1% 80% 229 176 623% 108% 10% 82x 45x -- 9% -3% 730

Safeway / SWY 0% 49% 5,982 10,794 391% 108% 11% 10x 9x 3.4% 71% 3% 234

Washington Post / WPO -2% 35% 2,685 2,436 185% 105% 11% 15x 20x 2.8% 24% 9% 225

Supervalu / SVU -3% 83% 1,443 7,957 466% 104% 29% 5x 5x 5.1% <0% 1% 265

Westell Technologies / WSTL -35% 63% 166 59 312% 103% 7% 12x 10x -- 102% -1% 502

Health Mgmt Assoc. / HMA -13% 67% 1,786 4,576 119% 103% 13% 9x 8x -- <0% 10% 191

Telephone & Data / TDS -10% 67% 2,342 3,019 168% 103% 16% 12x 12x 2.1% 72% 11% 578

Ingram Micro / IM -9% 33% 2,615 1,891 1894% 102% 10% 9x 7x -- 128% 1% 2,288

J.C. Penney / JCP -20% 68% 5,198 6,746 263% 102% 6% 14x 11x 3.3% 90% 7% 114

Big Lots / BIG -8% 48% 2,262 1,978 250% 101% 10% 10x 9x -- 45% 6% 380

Booz Allen Hamilton / BAH -5% 31% 2,070 2,828 201% 99% 118% 10x 9x -- <0% 2% 228

Learning Tree / LTRE -7% 35% 112 72 186% 99% -22% 29x 18x -- 33% 5% 285

Aeropostale / ARO -3% 159% 865 792 301% 97% 16% 10x 8x -- 41% 14% 572

Multimedia Games / MGAM -19% 42% 113 108 114% 94% 20% 42x 21x -- 75% -6% 309

Eastman Kodak / EK -42% 96% 818 1,312 495% 91% -70% n/m n/m -- <0% -4% 345

Kroger / KR -13% 14% 13,742 20,691 410% 90% 6% 11x 10x 1.8% 30% 3% 251

New York Times / NYT -1% 77% 972 1,570 150% 89% 10% 10x 9x -- 5% 0% 318

GameStop / GME -18% 33% 3,051 3,075 313% 85% 16% 8x 7x -- 30% 7% 566

Syneron Medical / ELOS -18% 60% 324 126 165% 85% -3% n/m 40x -- 70% -3% 359

DepoMed / DEPO -32% 108% 277 163 89% 85% 30% 4x n/m -- 45% -89% 2,106

Quiksilver / ZQK -4% 62% 580 1,175 157% 84% 15% 15x 10x -- 18% 7% 297

Motricity / MOTR -25% 1199% 114 111 127% 81% -18% n/m n/m -- 33% -86% 415






Dillard’s / DDS -48% 55% 2,137 2,915 217% 80% 17% 10x 9x 0.5% 90% 1% 214

Tesoro / TSO -44% 50% 2,757 3,873 654% 80% 11% 5x 5x -- 120% 3% 4,778

General Motors / GM -2% 78% 33,253 22,896 640% 79% 7% 5x 5x -- <0% -- 704

Research In Motion / RIMM -19% 164% 13,994 11,605 177% 78% 13% n/m n/m -- 49% 25% 1,176

Bridgepoint Edu. / BPI -39% 46% 1,104 816 105% 77% 19% 8x 8x -- 27% 10% 8,526

Foot Locker / FL -35% 43% 2,737 2,192 246% 77% 7% 11x 10x 3.7% 77% 2% 426

Con-way / CNW 0% 84% 1,278 1,633 311% 76% 0% 13x 10x 1.7% 39% 4% 182

HCA / HCA -12% 84% 9,966 34,747 91% 76% 0% 7x 7x -- <0% 6% 216

Power-One / PWER -1% 95% 687 601 197% 75% 18% 7x 6x -- 51% 0% 342

American Eagle / AEO -2% 59% 2,138 1,533 191% 75% 2% 12x 10x 4.0% 61% 15% 424

Audiovox / VOXX -3% 54% 135 194 308% 72% 27% 8x 6x -- 113% -1% 585

United Continental / UAL -8% 72% 5,707 10,726 297% 72% 30% 5x 3x -- <0% 21% 390

Gap / GPS -3% 51% 8,636 8,103 181% 71% 10% 11x 9x 2.9% 7% 11% 110

U.S. Cellular / USM -10% 32% 3,344 3,700 115% 70% 9% 22x 22x -- 47% 6% 1,617

Mentor Graphics / MENT -14% 67% 1,099 1,198 83% 69% 3% 10x 8x -- 24% -18% 211

Vishay Precision / VPG -6% 42% 190 122 186% 68% 2% 15x 11x -- 91% 3% 99

Philips Electronics / PHG 0% 81% 19,194 19,411 178% 68% -4% n/m 14x 5.9% 23% 4% 287

Ruddick / RDK -17% 24% 1,829 2,002 231% 68% 5% 15x 13x 1.4% 52% 4% 183

Macy’s / M -18% 32% 9,893 15,474 166% 68% 11% 9x 8x 1.7% 16% 2% 155

Avnet / AVT -10% 54% 3,782 4,623 574% 67% 3% 6x 6x -- 81% 2% 1,508

School Specialty / SCHS -7% 79% 177 463 165% 66% 25% n/m n/m -- <0% -4% 397

Teradyne / TER -19% 76% 2,029 1,277 125% 66% 19% 8x 8x -- 60% -1% 552

Motorola Solutions / MSI -23% 24% 13,286 8,813 164% 66% -14% 16x 14x 2.3% 39% -1% 453

Walgreen / WAG -22% 32% 31,192 30,935 230% 65% 8% 13x 11x 2.6% 41% 6% 402

Live Nation / LYV -3% 47% 1,596 2,325 236% 65% 2% n/m 29x -- <0% -2% 843

Journal Comms / JRN 0% 76% 194 253 146% 65% 23% 12x 8x -- 54% -5% 205

FalconStor Software / FALC -18% 82% 133 95 88% 64% -1% n/m n/m -- 20% -6% 168

EMCOR Group / EME 0% 57% 1,392 1,139 469% 63% 9% 11x 9x -- 18% 3% 223

Dell / DELL -19% 26% 26,403 19,534 316% 63% 13% 7x 7x -- 4% 5% 616

Symmetricom / SYMM -4% 57% 206 143 146% 63% 2% 11x 10x -- 88% -1% 297

Quest Software / QSFT -1% 85% 1,325 1,111 72% 62% 12% 12x 9x -- 1% 12% 232

Net1 UEPS / UEPS -14% 105% 319 354 89% 62% 9% 5x 4x -- <0% 39% 144

Marathon Oil / MRO -28% 39% 17,972 18,283 338% 62% 19% 6x 6x 2.4% 90% 9% 2,080

Veeco Instruments / VECO -12% 67% 1,415 839 131% 62% 9% 7x 9x -- 53% 3% 1,218

Sprint Nextel / S -13% 89% 10,241 24,504 135% 61% 16% n/m n/m -- <0% -16% 827


Staples / SPLS -12% 75% 9,602 11,071 225% 61% 8% 10x 9x 3.0% 25% 7% 471

Swift Transportation / SWFT -1% 143% 893 2,537 124% 61% -22% 9x 6x -- <0% 3% 175

XO Group / XOXO -15% 48% 250 155 75% 61% 4% 59x 33x -- 49% 6% 194

Western Digital / WDC -13% 59% 6,159 2,963 322% 60% 14% 7x 6x -- 86% 10% 146

Apollo Group / APOL -25% 21% 6,189 4,958 98% 60% 11% 9x 14x -- 18% 24% 87

Murphy Oil / MUR -1% 61% 9,422 9,617 298% 60% -2% 8x 7x 2.3% 93% 7% 8,279

ITT Educational / ESI -29% 37% 1,891 1,735 91% 59% 25% 7x 9x -- 5% 32% 251

W.R. Grace / GRA -31% 49% 2,592 1,755 165% 59% 2% 9x 9x -- <0% 4% 483

Himax Tech / HIMX -13% 89% 251 204 285% 59% -15% 13x 8x 8.5% 143% 8% 433

Brunswick / BC -8% 103% 1,216 1,397 260% 58% 6% 19x 10x 0.4% <0% -5% 237

Tenet Healthcare / THC -16% 66% 2,537 6,724 140% 58% 0% 11x 9x -- 12% 2% 220

Dean Foods / DF -11% 73% 1,478 5,252 239% 57% 11% 12x 9x -- <0% 5% 487

Oshkosh / OSK -1% 151% 1,460 2,178 348% 57% 19% 5x 8x -- <0% 5% 611

Sealy Corp. / ZZ -4% 82% 168 876 142% 57% 1% 17x 12x -- <0% 10% 291




Top 100, by Tangible Book Value to Market Value Price to Market Enter. Trailing 12 Months’ P/E (Est.) Tang. 5-Yr. Rev./



RAIT Financial / RAS -15% 209% 141 1,933 12% 5% 9% n/m 122x 6.5% 664% -13% 580

Dynegy / DYN 0% 95% 435 4,990 41% 18% -67% n/m n/m -- 562% 2% 1,354

Royal Bank Scotland / RBS 0% 132% 20,317 n/m n/m n/m 46% n/m n/m -- 482% 21% 244

USEC / USU -15% 175% 282 640 323% 21% 12% n/m 14x -- 468% 5% 853

Genworth Financial / GNW -16% 136% 3,067 n/m n/m n/m 53% 13x 4x -- 405% 3% 1,612

MGIC Investment / MTG -5% 521% 382 n/m n/m n/m -288% n/m 7x -- 396% -56% 1,449

Radian Group / RDN -12% 348% 301 n/m n/m n/m -337% n/m n/m .4% 375% -245% 2,100

CNO Financial / CNO -20% 44% 1,449 n/m n/m n/m 61% 8x 7x -- 315% 3% 1,144

Cemex / CX -2% 115% 5,120 21,068 69% 19% 24% n/m n/m -- 298% 8% 319

Republic Airways / RJET -1% 194% 157 2,407 115% 33% 113% n/m 5x -- 279% 15% 280

iStar Financial / SFI -55% 76% 637 6,641 8% 2% -22% n/m n/m -- 266% -32% 2,538


Hartford Financial / HIG -2% 75% 7,893 n/m n/m n/m 35% 6x 4x 2.3% 254% -4% 912

Barclays / BCS 0% 119% 30,301 n/m n/m n/m 169% 6x 3x 3.5% 233% 27% 230

Coca-Cola FEMSA / KOF -24% 7% 2,548 2,984 291% 134% 5% 18x 16x 2.2% 232% 15% 127

GenOn Energy / GEN -5% 47% 2,284 4,240 68% 11% 0% n/m n/m -- 229% 15% 829

Doral Financial / DRL -24% 101% 172 n/m n/m n/m 150% 34x 3x -- 228% 20% 286

AIG / AIG -2% 138% 42,059 n/m n/m n/m 225% 6x 7x -- 220% -- 1,189

Symetra Financial / SYA -16% 42% 1,212 n/m n/m n/m 65% 7x 7x 2.3% 216% 12% 1,785

CFS Bancorp / CITZ -19% 16% 57 n/m n/m n/m 2% n/m n/m .8% 203% 44% 140

Beazer Homes / BZH -4% 294% 120 1,334 50% 2% -130% n/m n/m -- 202% -12% 748

CNA Financial / CNA -1% 44% 5,900 n/m n/m n/m -6% 8x 8x 1.8% 194% 8% 1,147

Winn-Dixie Stores / WINN -2% 66% 338 209 3350% 946% -4% n/m n/m -- 191% 2% 318

Vantage Drilling / VTG -25% 75% 375 1,506 26% 10% -198% n/m n/m -- 190% -- 1,046

Assured Guaranty / AGO -16% 94% 2,119 n/m n/m n/m 7% 3x 4x 1.6% 186% -- 1,849

Aspen Insurance / AHL -1% 32% 1,696 n/m n/m n/m 27% n/m 8x 2.5% 182% 20% 3,134

Citigroup / C -2% 92% 78,114 n/m n/m n/m -2% 7x 5x .1% 177% 25% 285

Synovus Financial / SNV -13% 121% 1,068 n/m n/m n/m 60% n/m 8x 3.0% 175% 11% 222

Ashford Hospitality / AHT -8% 94% 501 2,793 31% 9% 3% n/m n/m 5.4% 174% 8% 12,931

Endurance Specialty / ENH -2% 44% 1,428 n/m n/m n/m 24% 64x 7x 3.4% 173% 22% 2,428

Flagstone Re / FSR -4% 75% 527 n/m n/m n/m 5% n/m 5x 2.1% 171% 20% 2,165

Capital Southwest / CSWC -2% 36% 310 n/m n/m n/m -6% n/m n/m 1.0% 170% 51% 527

Suffolk Bancorp / SUBK 0% 239% 80 n/m n/m n/m 32% n/m n/m 7.3% 167% 74% 235

Banner Corp. / BANR -20% 47% 231 n/m n/m n/m 38% n/m 172x .3% 166% 37% 203

American Capital / ACAS -38% 40% 2,742 n/m n/m n/m 6% 9x 9x -- 166% 40% 2,344

Old Republic / ORI 0% 53% 2,409 n/m n/m n/m -17% n/m 24x 7.5% 165% -1% 548

Bank of America / BAC -9% 120% 70,806 n/m n/m n/m 134% n/m 5x .6% 159% 24% 248

MVC Capital / MVC -3% 38% 262 n/m n/m n/m 18% 137x 37x 4.4% 158% 16% n/m

Popular / BPOP -15% 80% 2,038 n/m n/m n/m -13% 8x 6x -- 158% 18% 248

NewBridge Bancorp / NBBC -30% 23% 70 n/m n/m n/m 47% 112x 23x -- 157% 41% 182

XL Group / XL -9% 36% 5,588 n/m n/m n/m 3% 14x 8x 2.3% 157% 8% 1,823

Mercantile Bank / MBWM -53% 25% 71 n/m n/m n/m 41% 10x 9x -- 157% 23% 332

Sunstone Hotel / SHO -1% 109% 631 2,549 27% 15% -29% 10x n/m -- 156% 11% 19,389

Royal Caribbean / RCL 0% 124% 4,854 12,907 55% 27% -4% 8x 7x 1.8% 156% 13% 124

Micron Technology / MU -1% 128% 5,271 4,448 206% 50% 20% 15x 7x -- 155% -8% 353

Morgan Stanley / MS -4% 94% 30,896 n/m n/m n/m 20% 14x 6x 1.3% 152% -192% 617

Regions Financial / RF -1% 110% 4,859 n/m n/m n/m 82% 28x 6x 1.0% 149% 28% 164

MBIA / MBI -4% 136% 1,246 n/m n/m n/m -140% n/m 5x -- 149% -- 0


Everest Re / RE -7% 20% 4,274 n/m n/m n/m 15% 40x 7x 2.4% 144% 15% 4,953






MEMC Electronic / WFR -15% 158% 1,341 2,094 135% 24% -45% 7x 5x -- 143% 23% 506

First Merchants / FRME 0% 44% 173 n/m n/m n/m 53% 10x 8x .6% 143% 41% 161

Himax Tech / HIMX -13% 89% 251 204 285% 59% -15% 13x 8x 8.5% 143% 8% 433

CIT Group / CIT 0% 62% 6,129 n/m n/m n/m -9% 50x 25x -- 140% -17% 815

Investors Title / ITIC -23% 27% 73 n/m n/m n/m 8% 15x 17x .8% 140% 10% 460

First Indust. Realty / FR -49% 57% 711 2,226 12% 8% 2% n/m n/m -- 140% -29% 1,416

RLJ Lodging / RLJ -1% 50% 1,303 2,344 27% 11% 4% 136x 20x 4.9% 139% -- 12,814

Transatlantic / TRH -12% 8% 3,124 n/m n/m n/m 30% 67x 8x 1.8% 136% 11% 6,801

Meta Financial / CASH -36% 104% 58 n/m n/m n/m 31% n/m n/m 2.8% 135% 44% 93

NewStar Financial / NEWS -24% 48% 422 n/m n/m n/m 11% 34x 14x -- 133% 22% 1,351

Citizens Republic / CRBC -21% 43% 282 n/m n/m n/m 60% n/m 5x -- 132% 18% 217

SI Financial / SIFI -35% 12% 99 n/m n/m n/m -1% 35x 24x 1.3% 131% 53% 161

Bunge / BG -16% 27% 8,834 13,475 379% 21% -35% 9x 9x 1.7% 129% 3% 1,596

Dover Downs Gaming / DDE -3% 49% 87 149 163% 31% 10% 14x 10x 4.5% 128% 14% 224

Crexus Investment / CXS -3% 47% 702 n/m n/m n/m 1% 10x 8x 10.9% 128% -- n/m

SunTrust Banks / STI 0% 96% 9,079 n/m n/m n/m 53% 15x 8x 1.2% 128% 30% 215

Harvest Natural / HNR -29% 91% 311 207 0% 0% -36% 15x 8x -- 128% -- 0

Ingram Micro / IM -9% 33% 2,615 1,891 1894% 102% 10% 9x 7x -- 128% 1% 2,288

Loews Corp. / L -3% 29% 14,245 n/m n/m n/m -5% 11x 11x .7% 127% 16% 795

Zions BanCorp / ZION 0% 70% 2,783 n/m n/m n/m 46% 18x 8x .3% 126% 38% 215

MetLife / MET 0% 57% 32,920 n/m n/m n/m 28% 6x 5x 2.4% 125% 6% 884

Skechers / SKX -8% 102% 720 607 316% 127% -27% n/m 13x -- 125% 7% 763

CompuCredit / CCRT -21% 166% 62 n/m n/m n/m 184% n/m n/m -- 124% -- 396

Terra Nova Royalty / TTT -32% 24% 455 n/m n/m n/m 21% n/m n/m 2.8% 123% 8% 521

Tesoro / TSO -44% 50% 2,757 3,873 654% 80% 11% 5x 5x -- 120% 3% 4,778

Union Bankshares / UBSH -3% 51% 270 n/m n/m n/m 24% 11x 11x 2.7% 120% 55% 191

First Horizon / FHN 0% 97% 1,696 n/m n/m n/m 63% 11x 8x .6% 120% 20% 173

Zale / ZLC -61% 89% 117 456 375% 190% -38% n/m n/m -- 120% -2% 134

CoBiz Financial / COBZ -1% 51% 172 n/m n/m n/m 30% 14x 9x .9% 119% 40% 208

White River Capital / RVR -22% 17% 71 n/m n/m n/m -1% n/m n/m 5.1% 119% 74% 273

MedCath / MDTH -43% 17% 261 154 211% 164% -2% 71x 75x -- 119% -1% 194

Frozen Food Express / FFEX -17% 54% 57 72 532% 268% -51% n/m n/m -- 119% -2% 167

M.D.C. Holdings / MDC -4% 96% 787 1,283 68% 13% -23% n/m n/m 6.0% 119% -13% 778

BreitBurn Energy / BBEP -16% 30% 1,054 1,479 15% 5% 2% 357x 17x 9.5% 117% -1% 574

Hallmark Financial / HALL -2% 48% 126 n/m n/m n/m 21% n/m 28x -- 117% 9% 887

Fifth Street Finance / FSC -9% 52% 666 n/m n/m n/m -99% 9x 8x 13.9% 116% -- n/m

Lennar / LEN -6% 69% 2,281 5,139 59% 4% -1% 24x 13x 1.3% 116% -12% 736

Tellabs / TLAB 0% 119% 1,346 288 519% 214% -2% n/m 123x 2.2% 116% -5% 438

PennyMac Mortgage / PMT -6% 19% 452 n/m n/m n/m -22% 8x 7x 12.3% 116% -- 321

Pennsylvania REIT / PEI 0% 78% 541 2,724 17% 9% 6% 6x 6x 6.2% 115% 17% 643

Trina Solar / TSL -2% 145% 1,033 1,129 183% 56% 21% 5x 5x -- 115% 15% 161

Winthrop Realty / FUR -5% 64% 293 492 14% 10% -9% n/m n/m 7.3% 114% -41% n/m

Ameriprise Financial / AMP 0% 67% 9,217 n/m n/m n/m 9% 7x 6x 2.4% 114% 9% 964

MidWestOne Financial / MOFG -15% 11% 125 n/m n/m n/m 14% 11x 10x 1.7% 114% 52% 181

Goldman Sachs / GS -2% 57% 56,528 n/m n/m n/m 0% 10x 7x 1.3% 113% -3% 1,156

Audiovox / VOXX -3% 54% 135 194 308% 72% 27% 8x 6x -- 113% -1% 585

Pinnacle Airlines / PNCL -10% 160% 64 770 157% 34% 125% 16x 3x -- 113% 9% 186

Chimera Investment / CIM -13% 45% 3,081 n/m n/m n/m -8% 5x 6x 17.3% 112% -- n/m

White Mountains / WTM -28% 7% 3,248 n/m n/m n/m -5% 74x 25x .2% 111% 3% 661

Ares Capital / ARCC -7% 31% 2,816 n/m n/m n/m -22% 10x 9x 10.2% 111% 61% 1,598




Profiling 20 Superinvestor Holdings BP (BP) – Baupost , BP Capital , Chou , Greenlight , Third Point

Energy: Oil & Gas - Integrated London, United Kingdom, 44--207-4000 www.bp.com

Trading Data Consensus EPS Estimates Valuation

Price: $38.46 (as of 8/19/11) Month # of P/E FYE 12/31/10 n/m

52-week range: $34.16 - $49.50 Latest Ago Ests P/E FYE 12/31/11 6x

Market value: $122.0 billion This quarter $1.76 $1.92 7 P/E FYE 12/30/12 5x

Enterprise value: $148.7 billion Next quarter 1.69 1.77 6 P/E FYE 12/30/13 5x

Shares out: 3,171.8 million FYE 12/31/11 6.92 7.25 10 EV/ LTM revenue 0.4x

Ownership Data FYE 12/30/12 7.36 7.54 12 EV/ LTM EBIT 5x

Insider ownership: <1% FYE 12/30/13 8.41 8.25 3 P / tangible book 1.5x

Insider buys (last six months): 0 LT growth 5.0% 5.0% 1 Greenblatt Criteria

Insider sales (last six months): 0 EPS Surprise Actual Estimate LTM EBIT yield 21%

Institutional ownership: 11% 7/26/11 $1.69 $1.96 LTM pre-tax ROC 28%

Operating Performance and Financial Position

($ millions, except Fiscal Years Ended LTME FQE FQE

per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 196,604 245,486 274,316 291,438 367,053 246,138 308,928 350,800 75,871 103,848

Gross profit 51,219 60,868 63,840 64,757 73,315 59,164 28,102 60,243 (16,644) 19,367

Operating income 25,746 32,182 35,658 32,352 35,239 26,426 (3,702) 31,706 (24,129) 8,979

Net income 17,088 22,024 22,313 20,843 21,155 16,576 (3,721) 20,094 (17,151) 5,619

Diluted EPS 4.78 6.13 6.64 6.47 6.69 5.25 (1.19) 6.33 (5.48) 1.76

Shares out (avg) 3,637 3,521 3,338 3,194 3,132 3,122 3,131 3,135 3,131 3,148

Cash from operations 23,378 26,721 28,172 24,709 38,095 27,716 13,616 9,422 6,753 7,848

Capex 12,286 12,281 15,125 17,830 22,658 20,650 18,421 19,922 4,273 4,289

Free cash flow 11,092 14,440 13,047 6,879 15,437 7,066 (4,805) (10,500) 2,480 3,559

Cash & investments 1,359 2,960 2,590 3,562 8,197 8,339 20,088 20,162 8,964 20,162

Total current assets 61,443 75,290 75,339 80,202 66,384 67,653 96,853 109,031 77,249 109,031

Intangible assets 15,062 15,143 16,026 17,658 20,138 20,168 22,896 26,238 22,448 26,238

Total assets 194,630 206,914 217,601 236,076 228,238 235,968 272,262 290,995 248,615 290,995

Short-term debt 10,184 8,932 12,924 15,394 15,740 9,109 14,626 12,445 8,321 12,445

Total current liabilities 63,126 71,997 75,352 77,231 69,793 59,320 83,879 86,924 80,306 86,924

Long-term debt 12,907 10,230 11,086 15,651 17,464 25,518 30,710 34,445 22,259 34,445

Total liabilities 117,738 127,253 132,977 142,386 136,935 134,355 177,275 183,501 163,125 183,501

Common equity 76,892 79,640 84,603 93,669 91,282 101,613 94,987 107,494 85,490 107,494

EBIT/capital employed 26% 33% 36% 30% 32% 24% -3% 28% n/m n/m

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW BP is an integrated oil and gas producer. INVESTMENT HIGHLIGHTS

Proved reserves of ~18 billion barrels of oil equivalents (boe) and 3.5 million boe of average daily production in 1H11 (implied life is ~14 years). Reserves are split ~65/35% between oil/gas; ~55% are developed, and roughly a third are in the U.S.

4-5% dividend yield; dividend remains ~50% below pre-oil spill level. BP reinstated a quarterly dividend of $0.42 per ADS in February, signaling less pressure from the Gulf of Mexico (GOM) spill.

Long-term earning power is largely unaffected as BP’s asset base remains mostly intact. Yearend 2010 reserves are down only 1% despite disposals. BP had “resources” of ~50 billion boe at end of ‘10.

Adjusted EV-to-trailing EBITDA is ~4x. Even if one assumes lower oil prices (such as in 2009, when BP realized oil prices of ~$55/bbl), the EV multiple appears undemanding at ~5x 2009 EBITDA.

Adjusted EV per boe of proved reserves of ~$10 remains below the U.S./European peer average. EV is adjusted to include $18 billion of GOM spill provisions and $10 billion of pension provisions.

Disposals imply a value of ~$12 per boe of proved reserves. BP has announced $25 billion of disposals through June 30, out of a total $30 billion target.

CEO Dudley (55) may act to see “true value of the business more strongly reflected” in stock price.

INVESTMENT RISKS & CONCERNS

Market-related risks, including a sustained decline in oil prices and risks related to reserves in potentially unstable countries (~50% of the after-tax PV-10 of proved reserves of $115 billion at yearend 2010 is from reserves based outside of U.S/Europe).

Reinvestment risk. Oil and gas are depleting assets. Exploration capex may not yield proved reserves. In addition, the cost of finding reserves may go up just as much, if not more, than selling prices. Historical profits may lag reality due to GAAP accounting.

Ultimate GOM oil spill liability may be much larger than the remaining $18 billion provision. BP took a $41 billion pre-tax charge and has paid $23 billion of cash through June 30.

$27 billion of net debt (0.6x trailing adj. EBITDA). MAJOR HOLDERS Insiders <1% | BlackRock 6% | L&G 4% | State Street 1%

SELECTED OPERATING DATA

FYE December 31 2006 2007 2008 2009 2010 YTD

6/30/11 Proved reserves (Bboe)1 17.7 17.8 18.1 18.3 18.1 n/a PV-10, after-tax ($bn)2 91 176 57 89 115 n/a oil and gas production -2% -3% 1% 4% -4% -11%3 avg realized oil price 22% 14% 34% -38% 30% 38% avg realized gas price -4% -4% 32% -46% 22% 9% production costs 5% 26% 1% -12% 6% n/a refinery intake -8% -3% 1% 6% 6% -7% revenue 11% 7% 27% -34% 24% 7% Revenue ($bn) 266 284 361 239 297 187 % of revenue by segment: Exploration & production 26% 23% 24% 24% 22% 20% Refining & marketing 87% 88% 89% 89% 90% 92% Corporate/eliminations -13% -11% -12% -13% -12% -11% Revenue growth – E&P 10% -3% 31% -33% 15% 11% Revenue growth – R&M 9% 8% 28% -33% 25% 30% Adjusted EBIT margin by segment:4 Exploration & production 46% 42% 46% 38% 42% 41% Refining & marketing 2% 1% 1% 2% 2% 2% Adjusted EBIT margin 13% 10% 12% 9% 11% 9% Non-U.S. revenue % 64% 64% 66% 65% 67% 66% Selected items as % of revenue: EBIT 13% 11% 10% 11% -1%5 11% Net income 8% 7% 6% 7% -1% 7% DD&A 3% 4% 3% 5% 4% 3% Capex 6% 6% 6% 9% 6% 5% Selected Exploration/Production segment data: Avg oil price, $/boe 59.2 67.5 90.2 56.3 73.4 100.0 Avg gas price, $/mcf 4.7 4.5 6.0 3.3 4.0 4.4 Production cost, $/boe 5.7 7.1 7.2 6.4 6.8 n/a Return on tang. equity 33% 29% 29% 22% -5% 35%6 Tangible equity/assets 34% 34% 35% 36% 33% 29% shares out (avg) -5% -4% -2% 0% 0% 0%

1 In billions of oil-equivalent barrels, net (incl. BP’s share of equity investees). 2 Based on SEC method. Includes BP share of equity-accounted entities. 3 Reflects the “ongoing impacts to Gulf of Mexico production as a result of the suspension of drilling, and the continuing divestment programme.”

4 Excludes inventory gains/losses (and other non-operating items). 2010 excludes $41 billion GOM oil spill charge (pre-tax, pre-partner recovery). 5 As reported (includes GOM oil spill charge and other items). 6 Annualized. COMPARABLE PUBLIC COMPANY ANALYSIS

P / This Next MV EV EV / Tang. FY FY ($mn) ($mn) Rev. Book P/E P/E

XOM 339,380 345,830 .8x 2.2x 8x 8x

RDS.A 196,640 219,670 .5x 1.2x 7x 6x

CVX 186,860 180,420 .8x 1.7x 7x 7x

BP 121,990 148,720 .4x 1.5x 6x 5x RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE At an EV-to-trailing EBITDA of ~4x and EV-to-boe of proved reserves of ~$10, BP’s valuation remains undemanding relative to its long-lived and low-cost reserves. While the ultimate amount of the Gulf of Mexico oil spill liability remains uncertain, BP’s earning power is reassuring: trailing adjusted EBITDA of $43 billion approximates the $41 billion total spill-related charge ($23 billion of which has been paid through June 2011). The recently reinstated dividend, which yields an attractive 4-5%, remains ~50% below the dividend level before the oil spill. Klarman’s Baupost initiated a position in Q2.



BP – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS

Conservative Base Case Aggressive

Valuation methodology

Valuation of proved reserves only

(based on implied $/boe of asset disposals of ~$12/boe)

Valuation of proved reserves

(~$13/boe) plus value of additional

“resources”

Valuation of proved reserves

(~$14/boe) plus value of additional

“resources”

Value of proved reserves:1 Proved reserves, including share of equity investees, as of 12/31/10 18 billion boe 18 billion boe 18 billion boe Fair value “multiple”2 $12 per boe $13 per boe $14 per boe

Fair value of proved reserves (A) $217 billion $235 billion $253 billion Value of additional “resources”:3 Additional “resources” as of 12/31/10 50 billion boe 50 billion boe 50 billion boe Fair value “multiple”4 $0 $.50 per boe $1 per boe

Fair value of additional “resources” (B) $0 $25 billion $50 billion

Estimated total enterprise value (A) + (B) $217 billion $260 billion $304 billion

Minus: Net debt5 -$27 billion -$27 billion -$27 billion Minus: Remaining liability for Gulf of Mexico oil spill6 -$18 billion -$18 billion -$18 billion Minus: Provision for post-retirement benefits5 -$10 billion -$10 billion -$10 billion Minus: Non-controlling interest5 -$1 billion -$1 billion -$1 billion

Estimated fair value of the equity of BP7 $162 billion $205 billion $248 billion $51 per ADS $65 per ADS $79 per ADS

Implied valuation metrics based on trailing financials: EV to adjusted EBITDA ($43 billion, incl. profit from equity investees)8 5x 6x 7x Other implied valuation metrics: Implied run-rate dividend yield 9 3% 3% 2% Implied 2009 dividend yield (based on pre-oil spill level) 7% 5% 4% Implied fair value of the equity to tangible book 2x 3x 3x Implied EV per boe of proved reserves $12 $14 $17

1 As of year-end 2010, BP had proved reserves of 18.1 billion oil-equivalent barrels (including its share of reserves in equity investees) with an implied reserve life of 13 years based on 2010 production. Conventional oil represents ~50% of reserves, with the remainder largely represented by deepwater oil and conventional/LNG gas. ~55% of proved reserves are developed. About one third of reserves are located in the U.S. and ~20% in Russia through a stake in TNK-BP). BP also has significant reserves in the North Sea, Azerbaijan, and Angola, among others. Total headline proceeds of ~$21 billion from announced disposals through January 2011 (out of total targeted disposals of ~$30 billion) relate to proved reserves and non-proved resources of 1.7bn boe and 3.2bn boe, respectively, of which 0.4bn boe and 1.8bn boe are based on disposals completed in 2010 (excluded from our reserve/resources figures above). 2 For reference, the implied value of BP’s announced disposals is ~$12 per boe of proved reserves. 3 Per BP’s disclosure in February 2011, it had 50.2 billion boe of “non-proved resources” in addition to its proved reserves at year-end 2010. 4 As timing and ultimate recoverability of additional “resources” is rather uncertain, we attach zero value for “resources” in our conservative case. 5 Per balance sheet value as of June 30, 2011. 6 BP took a spill-related charge of $41 billion (pre-tax) in 2010. After cash payments through June 30, 2011, the remaining provision is $18 billion. We assume the present value of total remaining liabilities approximate the latest provision value of $18 billion. This is mainly to reflect the time value of money (the eventual amount and timing of cash outflows largely depend on legal processes). Underlying our estimates is the assumption that BP will not face substantial further costs beyond existing provisions from oil spill-related litigation and investigations, many of which are still pending. 7 Based on 3.2 billion American Depositary Shares (ADS) outstanding. One ADS equals 6 ordinary BP shares. 8 Adjusted to exclude Gulf of Mexico spill response charges, inventory holding gains/losses, and other non-operating items. 9 Based on annualizing Q2 dividend of $0.42 per ADS. BP reinstated a dividend in February 2011 after suspending payments in wake of the 2010 GOM oil spill. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. BP – GULF OF MEXICO OIL SPILL COSTS AND PROVISIONS (PRETAX)

Source: Company presentation dated July 26, 2011, available at http://bit.ly/nyIGkQ



BP – SOURCES AND USES OF CASH

* 1H11 inorganic capex includes $2 billion paid as a deposit relating to the transaction with Reliance Industries. ** GoM (Gulf of Mexico).

Source: Company presentation dated July 26, 2011, available at http://bit.ly/nyIGkQ BP – STRATEGIC OBJECTIVES AND PLAN, 2011-2013

* Remains subject to final regulatory approvals and completion.

Source: Company presentation dated July 26, 2011, available at http://bit.ly/nyIGkQ



Brookfield Residential (BRP) – Markel , Pabrai Real Estate: Residential Homebuilding and Land Development Fairfax, VA 22031, 703-270-1700 www.brookfieldrp.com


Price: $7.46 (as of August 22, 2011) Month # of P/E FYE 12/31/10 6x

52-week range: $7.16 - $14.32 Latest Ago Ests P/E LTME 6/30/11 17x

Market value: $741 million This quarter n/a n/a n/a P/E FYE 12/31/11 n/a

Enterprise value: $2.1 billion Next quarter n/a n/a n/a P/E FYE 12/31/12 n/a

Shares out: 101 million FYE 12/31/11 n/a n/a n/a P/LTM pretax income 4.5x

Ownership Data FYE 12/31/12 n/a n/a n/a EV/ LTM revenue 2.2x

Insider ownership: 71% FYE 12/31/13 n/a n/a n/a P / tangible book 0.8x

Insider buys (last six months): n/m LT growth n/a n/a n/a Greenblatt Criteria

Insider sales (last six months): n/m EPS Surprise Actual Estimate LTM EBIT yield n/m

Institutional ownership: >80% n/a n/a n/a LTM pre-tax ROC n/m


($ millions, except Fiscal Years Ended LTME YTD YTD

per share data) 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Land revenue 420 388 264 355 442 156 243

Housing revenue 837 638 491 599 512 259 172

Total revenue 1,257 1,027 754 954 955 415 416

Gross profit 257 170 110 258 247 121 110

Pretax income 154 21 36 189 164 78 52

Net income 167 47 39 130 35 57 (38)

Diluted EPS 1.65 0.46 0.39 1.27 0.44 0.46 (0.37)

Shares out (avg) 101 101 102 102 102 102 101

Land and housing 2,194 2,192 2,192

Unconsolidated 137 137 137

Receivables 218 234 234

Cash 12 20 20

Deferred taxes 75 0 0

Total assets 2,636 2,583 2,583

Project financings 1,025 874 874

Notes payable 0 498 498

Deferred taxes 0 14 14

Accounts payable 288 234 234

Minority interests 42 34 34

Equity 1,280 929 929


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BUSINESS OVERVIEW Brookfield Residential is a North American land developer and homebuilder. The company develops land and builds homes for its communities and sells lots to other builders.

BRE was formed via a merger of Brookfield Properties’ land and housing division and Brookfield Homes on March 31. INVESTMENT HIGHLIGHTS

Sixth-largest residential platform by land and housing assets in North America, active in three markets in Canada, four in California, and three in the Central and Eastern U.S., with 100,000+ lots. BRE is dominant in Western Canada, with one of five Calgary residents living in a BRP community.

Focused on markets with educated workforce and job creation, e.g. Calgary, Edmonton, Toronto, San Francisco, San Diego, and Washington D.C.

“Brookfield-style” shareholder-friendly capital allocation. Management seeks to purchase land at low prices in advance of growth, and to add value in entitlement process. Local management has in-depth market knowledge and is properly incentivized.

CEO Alan Norris (54) was previously a director of Brookfield Homes (since 2003) and CEO of BPO Residential (since 1994), which he joined in 1983.

Most debt is project-specific, i.e., non-recourse to the parent company. Of $1.4 billion in total debt, ~$500 million relates to corporate notes payable.

Strong capital structure allows BRP to participate in large deals and acquire assets during a downturn.


Concentration in Alberta, Canada, with Calgary and Edmonton accounting for 43% of owned lots. While the Alberta economy has been relatively stable, it relies to some extent on strong oil prices.

Vulnerable to rising interest rates. A 1% increase in interest rates would negatively impact cash flow by $5 million annually. A spike in long-term rates would make homes less affordable to consumers.

MARKET QUOTATIONS OF BROOKFIELD ENTITIES


BAM 34,340 67,250 4.5x 3.8x 13x 20x

BPO 8,130 17,060 11.4x .9x 15x 14x

BIP 2,950 7,590 6.5x 1.2x n/a n/a

BRP 741 2,127 2.2x .8x n/a n/a

SELECTED OPERATING DATA FYE December 31 2007 2008 2009 2010 1H11 Revenue 1,257 1,027 754 954 416 Change (y-y) n/a -18% -27% 27% 0% % of revenue by segment: Land 33% 38% 35% 37% 59% Housing 67% 62% 65% 63% 41% Gross margin by segment: Land 42% 50% 33% 43% 35% Housing 20% 15% 13% 17% 14% Selected items as % of revenue: Gross profit 20% 17% 15% 27% 26% SG&A 9% 10% 11% 9% 11% Net income 13% 5% 5% 14% -9% Selected operating data: Controlled building lots (‘000) 110.8 111.9 109.9 109.7 108.3 Lots sold to homebuilders (‘000)1 4.1 2.4 1.7 2.3 1.5 Home closings (‘000) 1.9 1.5 1.4 1.6 .5 EPS 1.65 0.46 0.39 1.27 (0.37)

1 1H11 figure represents MOI estimate, based on 1,205 lot closings in 1H10, 1,601 lot closings in 1H11, and 1,151 lots sold to homebuilders in 1H10.

BALANCE SHEET SNAPSHOT, as of June 30, 2011 ($ in billions) Total assets: $2.6 billion

REVENUE BY TYPE & GEOGRAPHY, H1 2011 Total revenue: $416 million

MAJOR HOLDERS Brookfield Asset Management 71% (down from 91% pre-rights offering) | Markel <1% | Pabrai <1% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Brookfield Residential Properties was formed via the March 31st merger of Brookfield Homes and the land and housing division of Brookfield Properties. BRP provides an opportunity to invest in the North American residential housing market at a below-book market quotation and in partnership with Brookfield Asset Management, a highly regarded Canadian manager of real assets. While BRP carries no current payout, the company appears likely to grow book value at a respectable rate. BRP controls more than 100,000 residential lots and has dominant market positions in Western Canada. It sold a total of 4,000 lots and homes in 2010, with the potential to accelerate sales in a recovering real estate market. The relatively strong balance sheet should allow BRP to acquire assets opportunistically on favorable terms, particularly in selected U.S. markets.

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EquityNotesProject DebtAccruals

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Land revenue - California

Land revenue - Other U.S.

Housing revenue - Canada

Housing revenue - California

Housing revenue - Other U.S.



BROOKFIELD RESIDENTIAL – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS 1



1x tangible book value, assuming 10% discount to carrying value of land and

housing inventory

8x TTM pretax income 6x potential pretax income

in housing recovery scenario

Conservative case valuation:

Tangible book value, as of 6/30/2011 $929 million

Minus: 10% of land and housing inventory ($219 million)

Base case valuation:

Pretax income, 2010 $164 million

Plus: Pretax income, H1 2011 $52 million

Minus: Pretax income, H1 2010 ($78 million)

Pretax income, TTME 6/30/2011 $138 million

Assumed fair value multiple 8x

Aggressive case valuation:

Potential pretax income in recovery scenario 2 $300 million


Estimated fair value of the equity of BRP 3 $710 million $1.1 billion $1.8 billion

$7.00 per share $10.90 per share $17.80 per share

Implied valuation multiples:

Tangible book value to estimated equity value 131% 84% 52%

Equity value to TTM pretax income 4x 7x 11x

Equity value to average EPS from 2007-2010 7x 12x 19x

1 It is difficult to account for the likely effect of the highly regarded Brookfield investment process on the long-term value creation of Brookfield Residential Properties. We have not explicitly attempted to ascribe value to the fact that the company’s managers are top-notch in their field and appear to be focused on shareholder value maximization. However, as we considered appropriate valuation multiples, we implicitly considered the high quality of management. 2 Potential pretax income in recovery scenario represents “back-of-the-envelope” estimate and is intended merely as a placeholder for further analysis. In 2007, pro forma pretax income was $154 million, while pretax income was $189 million in 2010. In a recovery scenario, both the velocity of lot sale closings and home sale closings would presumably increase, along with rising average selling prices for lots and homes. As Brookfield Residential Properties owns a large inventory of 100,000+ lots (compared to lot closings of 1,601 in 1H11), the company appears to be in a position to accelerate sales quite rapidly in an improving residential real estate market environment. As a result, predicting potential pretax income in a recovery scenario is subject to significant variability in key assumptions. 3 Based on 101.2 million shares outstanding.

Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. BROOKFIELD RESIDENTIAL – SELECTED OPERATING PERFORMANCE DATA, YTD 2011

Source: Company presentation dated August 2011, available at http://bit.ly/n0llud



BROOKFIELD RESIDENTIAL – PROPERTY PORTFOLIO

Source: Company presentation dated August 2011, available at http://bit.ly/n0llud



Cemex (CX) – Southeastern Capital Goods: Construction - Raw Materials Mexico, 52-81-888-8888 www.cemex.com



52-week range: $4.88 - $10.72 Latest Ago Ests P/E FYE 12/31/11 n/m

Market value: $5.1 billion This quarter -$0.04 -$0.02 8 P/E FYE 12/30/12 n/m

Enterprise value: $21.1 billion Next quarter -0.13 -0.10 8 P/E FYE 12/30/13 14x

Shares out: 1,028.0 million FYE 12/31/11 -0.57 -0.40 18 EV/ LTM revenue 1.4x

Ownership Data FYE 12/30/12 -0.16 0.00 16 EV/ LTM EBIT 25x

Insider ownership: <1% FYE 12/30/13 0.35 0.50 7 P / tangible book n/m



Institutional ownership: 49% 7/22/11 -$0.28 -$0.07 LTM pre-tax ROC 4%



per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 8,065 13,900 17,898 19,102 18,894 16,561 14,925 14,621 4,010 3,973

Gross profit 3,402 5,530 6,474 6,423 6,003 4,867 4,182 4,067 1,203 1,120

Operating income 1,482 2,153 2,889 2,448 153 1,160 673 835 314 250

Net income 1,613 1,927 2,209 1,789 (5,205) (494) (600) (1,255) (326) (286)

Diluted EPS 2.11 2.31 2.58 1.94 (6.10) (0.12) (0.60) (1.14) (0.30) (0.27)

Shares out (avg) 764 836 887 909 879 929 999 1,010 1,080 1,041

Cash from operations 1,832 2,420 4,006 3,820 3,456 2,910 1,828 n/a (546) n/a

Capex 0 0 0 0 1,717 557 396 n/a (1,160) n/a

Free cash flow 1,832 2,420 4,006 3,820 1,738 2,352 1,433 n/a 614 n/a

Cash & investments 0 0 0 726 1,080 1,181 700 662 810 662


Intangible assets 0 0 0 16,278 18,804 19,634 17,239 ~17,000 ~17,000 ~17,000

Total assets 17,796 25,597 29,465 45,405 52,213 48,752 43,127 41,593 46,410 41,593

Short-term debt 0 0 0 0 8,266 650 482 0 0 0


Long-term debt 3,763 7,199 6,984 15,125 13,784 17,203 16,667 16,611 0 16,611


Preferred stock 0 0 0 0 0 0 0 0 0 0

Common equity 7,988 9,706 12,830 13,661 15,966 17,907 16,257 15,242 17,305 15,242

EBIT/capital employed 18% 19% 19% 14% 1% 5% 3% 4% n/m n/m


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BUSINESS OVERVIEW Mexico-based Cemex produces building materials worldwide. INVESTMENT HIGHLIGHTS

One of the largest cement producers in the world, with annual production capacity of 96 million metric tons at yearend 2010 (30% of which is in Mexico, 27% in Europe, and 18% in the U.S.).

Equity has considerable upside potential if demand continues to improve. This would give Cemex more flexibility to deal with its large debt. Based on $4-5 billion of 2007-08 EBITDA, the EV multiple is ~5x (trailing EBITDA: $2.3 billion).

May benefit from infrastructure stimulus initiatives by governments worldwide, and especially if the U.S. announces more such spending.

Recovery potential in the U.S., where Cemex generated $1+ billion of EBITDA in 2007. Trailing U.S. EBITDA is negative $100+ million.

Expects “low to mid-single digit” volume growth y-y in 2011 for cement, ready mix, and aggregates.


High leverage, little FCF. Following two large acquisitions at the top of the cycle (RMC in 2005 and Rinker in 2007), Cemex is still left with $18 billion of net debt to pay off (8x trailing EBITDA). With negative free cash flow in 1H11, and only $1 billion of FCF generated since 2009, Cemex relies on a sustained recovery to be able to service debts.

Refinancing risk, due to $8+ billion of “Financing Agreement” debt maturing in 2014. Further disposals and dilutive equity issues cannot be ruled out.

Margin pressure from increasing input costs is offsetting benefits from modest demand growth. Cemex expects the cost of energy, on a per-ton-of-cement-produced basis, to increase 17% y-y in 2011.

Competition, as cement transportation costs may be low relative to the product price in certain markets. Cemex’ large scale mitigates this risk somewhat.

Chairman and CEO Zambrano (67), who presided over the 2005-07 M&A buying spree, remains in office. He has been CEO since 1985.

COMPARABLE PUBLIC COMPANY ANALYSIS


CRH 11,460 17,240 .7x 1.4x 14x 11x

LFRGY 11,370 31,540 1.3x 5.9x n/a n/a

CX 5,120 21,070 1.4x n/m n/m n/m

SELECTED OPERATING DATA1

FYE December 31 2007 2008 2009 2010 YTD

6/30/11 cement volume 2% -10% -17% 1% 2% ready‐mix volume 9% -4% -30% -5% 9% aggregates volume 34% 9% -31% -6% 3% revenue 14% -4% -28% -3% 10% EBITDA 9% -10% -35% -13% -4% Revenue ($bn) 20.9 20.1 14.5 14.1 7.5 % of revenue by product: Cement n a 40% 46% 8% n/a Ready-mix concrete n/a 40% 37% 34% n/a Aggregates n/a 16% 14% 14% n/a Other n/a 4% 3% 3% n/a % of revenue by geography: Europe 40% 36% 37% 35% 44% Mexico 18% 18% 21% 25% 24% U.S. 23% 22% 19% 18% 15% Other 19% 24% 22% 23% 17% EBITDA ($bn) 4.5 4.1 2.7 2.3 1.1 % margin 22% 20% 18% 16% 15% % of EBITDA by product: Cement n/a 67% 80% 87% n/a Ready-mix concrete n/a 12% 6% 1% n/a Aggregates n/a 14% 10% 8% n/a Other n/a 7% 4% 3% n/a % of EBITDA by geography: Europe 25% 23% 21% 35% 36% Mexico 29% 32% 41% 50% 53% U.S. 23% 16% 5% -2% -6% Other 23% 29% 33% 17% 17% Selected items as % of revenue: Gross margin 34% 32% 29% 28% 28% EBIT 14% 12% 8% 6% 6% Net income 11% 1% 1% -9% -8% D&A 8% 9% 10% 10% 9% Capex 10% 11% 4% 4% 2% FCF after maintenance capex2 12% 13% 8% 4% -4% FCF after maint. capex ($mn)2 2,455 2,600 1,215 512 -305 Cement volume (MM metric tons) 87 78 65 66 33 Tangible equity/assets -10% -10% -5% -4% -6% shares out (avg) 1% 3% 12% 17% 10%

1 Financials are based on Mexican Financial Reporting Standards (MFRS). Cemex plans to adopt IFRS reporting effective 2012. Certain figures presented may not be comparable throughout the period due to acquisitions (including the ~$14bn buy of Australia-based cement producer Rinker in ‘07), and disposals. 2 As reported by the company.

MAJOR HOLDERS Insiders <1% | Southeastern 15% | Dodge & Cox 7% | Brandes 4% | DFA 2% | Baillie Gifford 2% | Citigroup 2% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Cement producer Cemex continues to struggle to repay its debts following a $20+ billion buying spree from 2005-07, which has nearly bankrupted the company. New investors may be enticed by a potential demand recovery (stimulus-driven?), especially in the U.S., which could give Cemex the flexibility to avoid further disposals or dilutive equity raises. In such a recovery scenario, the leveraged equity could return multiples as Cemex’ earning power is large relative to its recent enterprise value. While it is easy to see how Cemex’ share price could multiply, the lacking margin of safety is a high hurdle.



CEMEX – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS



10% required FCF yield (based on

trailing FCF after maintenance capex)

10x average 2008-10 EBITDA less

estimated maintenance capex

10x 2008 EBITDA less estimated

maintenance capex

Conservative case valuation: TTM free cash flow after maintenance capex (year to June 2011) $0.2 billion Required yield 10%

Base case valuation: Average 2008-10 EBITDA $3.0 billion Estimated maintenance capex1 -$0.4 billion

Average 2008-10 EBITDA less estimated maintenance capex $2.7 billion Fair value multiple 10x

Estimated enterprise value $26.5 billion Aggressive case valuation: 2008 EBITDA $4.1 billion Estimated maintenance capex1 -$0.4 billion

2008 EBITDA less estimated maintenance capex $3.7 billion Fair value multiple 10x

Estimated enterprise value $37.3 billion Minus: Net debt (6/30/2011)2 -$17.8 billion -$17.8 billion Minus: Estimated other liabilities3 -$1.0 billion -$1.0 billion

Estimated fair value of the equity of Cemex4 $1.9 billion $7.7 billion $18.5 billion

$1.80 per ADS $7.40 per ADS $17.80 per ADS

Implied upside/(downside) to recent stock price ($5.25 per share) -66% 41% 239% Implied valuation metrics based on TTM financials:5 EV to revenue (~$15 billion) 1.4x 1.8x 2.5x EV to EBITDA ($2.3 billion) 9x 12x 16x FCF yield (based on ~$190 million of FCF after maintenance capex) 10% 2% 1% Implied valuation metrics based on 2008 financials:6 EV to revenue (~$20 billion) 1.0x 1.3x 1.9x EV to EBITDA ($4.1 billion) 5x 6x 9x Other implied valuation metrics: EV per metric ton of annual cement capacity7 $215 $276 $389

1 Based on management guidance of $350 million in maintenance capex for 2011 (total 2011 capex guidance is $470 million). 2 Includes $1.2 billion of perpetual notes. $8.3 billion of debt becomes due in 2014 (“Financing Agreement” debt). 3 Includes estimated minority interests and net post-retirement liabilities. 4 Based on 1.04 billion ADS outstanding. 5 Based on the year to June 2011. 6 We have chosen 2008 as a good year of indicative earning power of Cemex in a more normalized economic environment. Prior years are not comparable due to the transformative (read: value-destructive!) acquisitions of RMC and Rinker in 2005 and 2007, respectively. It is because of these acquisitions that Cemex has significant debt outstanding, which it is struggling to pay off. 7 Based on cement production capacity of 96 million metric tons at yearend 2010. This metric ignores Cemex’s other businesses. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

CEMEX – FREE CASH FLOW, H1 2011

Source: Company presentation dated July 2011, available at http://bit.ly/nHG3UI



CEMEX – INFORMATION ON DEBT AND PERPETUAL NOTES

1 Excluding perpetual notes. 2 Starting in the second quarter of 2010, calculated in accordance with our contractual obligations under our Financing Agreement. Source: Company presentation dated July 2011, available at http://bit.ly/nHG3UI CEMEX – DEBT MATURITY PROFILE

Source: Company presentation dated July 2011, available at http://bit.ly/nHG3UI



Dollar General (DG) – BRK , Lone Pine , Pennant Services: Retail (Specialty Non-Apparel) Goodlettsvile, TN, 615-855-4000 www.dollargeneral.com


Price: $32.08 (as of 8/19/11) Month # of P/E FYE 1/28/11 18x




Shares out: 341.5 million FYE 1/31/12 2.25 2.24 20 EV/ LTM revenue 1.0x





Institutional ownership: n/a 6/1/11 $0.48 $0.50 LTM pre-tax ROC 66%



per share data) 1/28/05 2/3/06 2/2/07 2/1/08 1/30/09 1/29/10 1/28/11 4/29/11 4/30/10 4/29/11

Revenue 7,661 8,582 9,170 9,495 10,458 11,796 13,035 13,375 3,111 3,452

Gross profit 2,263 2,465 2,368 2,643 3,061 3,690 4,177 4,264 1,000 1,087

Operating income 557 562 248 255 581 953 1,274 1,305 291 322

Net income 344 350 138 (13) 108 339 628 649 136 157

Diluted EPS 1.04 1.08 0.44 (0.04) 0.34 1.04 1.82 1.88 0.39 0.45

Shares out (avg) 329 322 313 317 317 323 341 341 341 342

Cash from operations 392 556 405 442 575 673 825 957 91 224

Capex 288 284 262 140 206 251 420 422 91 92

Free cash flow 103 271 144 302 370 422 404 536 0 132

Cash & investments 276 210 219 120 378 222 497 603 223 603


Intangible assets 0 0 2 5,716 5,664 5,623 5,596 5,590 5,615 5,590

Total assets 2,841 2,980 3,041 8,656 8,889 8,864 9,546 9,715 8,977 9,715

Short-term debt 13 9 8 3 14 4 1 1 4 1

Total current liabilities 826 811 833 858 1,075 1,207 1,365 1,387 1,206 1,387

Long-term debt 259 270 262 4,279 4,123 3,400 3,287 3,263 3,400 3,263



Common equity 1,685 1,721 1,746 2,704 2,832 3,390 4,055 4,220 3,537 4,220



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BUSINESS OVERVIEW Dollar General is a U.S. broadline discount retailer, offering national brands and private label products at large discounts.

The company operates 9,500+ stores (<5% owned) in 35 states. Stores, which average ~7,000 square feet, are mainly in neighborhood locations. The average cost in 2011 of a leased store (incl. improvements, equipment and fixtures, but excl. ~$75,000 of initial inventory, net of payables) is $185K for new, $175K for relocated, and $90K for remodeled stores. INVESTMENT HIGHLIGHTS

One of the largest broadline discount retailers in the U.S., by revenue. In terms of stores, Dollar General’s ~9,500 locations exceed those of any other U.S. retailer, including Wal-Mart (~3,800 stores), rival “dollar” stores such as Family Dollar (~6,900), and drugstores Walgreen/CVS (7,000-8,000 each).

Focus on value-conscious consumers may lead to more traffic despite a weak U.S. economy. Dollar General’s “everyday low prices” and smaller stores appeal to shoppers who look for bargains, yet like the convenience of a neighborhood store.

Competes in neighborhoods where convenience is important. Average store size of ~7K square feet compares to ~185K for Wal-Mart supercenters.

Same-store sales grew 5% y-y in the April quarter driven by both an increase in customer traffic as well as in average transaction amount. Management is guiding for full-year growth of 3-5%.

Guiding for adjusted EPS of $2.20-2.30 for the year ended January 2012, up 14-19% y-y, excluding a positive $0.06 per share impact from an extra 53rd week in the recent period. EPS is adjusted to exclude items related to debt redemptions and is based on 346 million average diluted shares.

Controlled by KKR following a buyout in 2007. After a re-listing in 2009, KKR and Goldman-owned Buck Holdings still owns 70+% of shares.

“Made a strategic decision to purchase certain of our leased stores” during 2010, which continues in 2011. This may lead to incremental value creation over time as U.S. real estate markets recover.


Shares appear fairly valued trading at 1.0x EV-to-trailing revenue and 9x trailing EBITDA. Shares also trade at a premium valuation to other “dollar stores” such as Family Dollar and Big Lots.

KKR-led operational improvements have largely run their course, as evidenced by a trailing EBITDA margin of 12% versus ~5% in FY07/08.


FYE January 31 2007 2008 2009 2010 2011 YTD

4/29/11 same-store sales1 3% 2% 9% 10% 5% 5% stores (end) 4% 0% 2% 6% 6% 6% selling sq ft (end) 5% 0% 2% 6% 7% 7% sales/selling sq ft 2% 1% 9% 8% 3% 3%2 revenue 7% 4% 10% 13% 10% 11% EBIT -56% 3% 127% 64% 34% 11% Revenue ($bn) 9.2 9.5 10.5 11.8 13.0 3.5 % of revenue by product category: Consumables3 66% 67% 69% 71% 72% 73% Seasonal4 16% 16% 15% 15% 15% 13% Home products5 10% 9% 8% 7% 7% 7% Apparel6 8% 9% 8% 7% 7% 7% Selected items as % of revenue: Gross profit 26% 28% 29% 31% 32% 32% EBIT 3% 3% 6% 8% 10% 9% Net income 2% 0% 1% 3% 5% 5% Net cash from ops 0% 0% 6% 6% 6% 6% D&A 2% 2% 2% 2% 2% 2% Capex 3% 1% 2% 2% 3% 3% Stores (end) 8,229 8,194 8,362 8,828 9,372 9,496 Selling sq ft (mn; end) 57.3 57.4 58.8 62.5 67.1 68.1 Sales/sq ft ($) 163 165 180 195 201 2032 Tang. equity/assets 57% -102% -88% -69% -39% -33% shares out (avg) n/m7 n/m7 n/m7 2% 6% 0%

1 Includes stores that have been open for 13 months and remain open at the end of the reporting period. 2 Based on the trailing 52-week period ended April 29, 2011. 3 Includes paper and cleaning products, food, beverages and snacks, health and beauty (including over-the-counter medicines), and pet supplies. 4 Includes decorations, toys, batteries, small electronics, greeting cards, stationery, prepaid cell phones and accessories, gardening supplies, hardware, automotive and home office supplies. 5 Includes kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods. 6 Includes casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories. 7 Due to the KKR-led buyout and re-listing in 2007 and 2009, respectively.

Gross margin pressure in a “challenging macroeconomic environment.” In the April quarter, gross margin declined 60bps y-y to 31.5% due to higher sourcing costs (not fully passed on).

$2.7 billion of net debt (1.7x trailing EBITDA, down from 2.3x in April of 2010).

MAJOR HOLDERS Insiders 1% | Buck Holdings* 71% | T. Rowe 8% | Canada Pension 5% | Lone Pine 5% | Maverick 2% | Pennant 1% * Owned by KKR, Goldman, Sachs, and other investors. RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Following the KKR-led buyout in 2007, Dollar General has significantly improved same-store sales and margins. The well-run company may continue to attract customers even if the U.S. economy weakens due to its focus on value-conscious consumers and convenient, neighborhood stores. Unfortunately, the valuation already reflects these positives (both on an absolute basis, and especially relative to other “dollar” stores). While we like the business, the valuation is less compelling.



DOLLAR GENERAL – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 6x trailing EBITDA 15x trailing net

income 1.5x trailing revenue


TTM EBITDA (year to April 2011) $1.6 billion

Fair value multiple 6x

Estimated enterprise value $9.4 billion


TTM net income (year to April 2011) $0.6 billion



TTM revenue (year to June 2011) $13.4 billion

Fair value multiple 1.5x


Minus: Net debt (as of 4/29/2011) -$2.7 billion -$2.7 billion

Estimated fair value of the equity of Dollar General1 $6.7 billion $9.7 billion $17.4 billion

$20 per share $29 per share $51 per share

Implied upside/(downside) to recent stock price ($32 per share) -38% -11% 59%

Implied valuation metrics based on TTM financials:2

EV to revenue ($13.4 billion) 0.7x 0.9x 1.5x

EV to gross profit ($4.3 billion) 2x 3x 5x

EV to EBITDA ($1.6 billion) 6x 8x 13x

EV to EBIT ($1.3 billion) 7x 9x 15x

FCF yield (~$535 million) 8% 5% 3%

Implied valuation metrics based on 3-year average financials:3



Other implied valuation metrics:

EV per square foot of selling space4 $138 $182 $295

EV per store4 $1.0 million $1.3 million $2.1 million

1 Based on ~342 million shares outstanding. 2 Based on the trailing twelve months to April 2011. 3 Based on FY09-11 (ended January). 4 Based on ~9,500 stores and ~68 million square feet of selling space as of April 29, 2011.

Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. DOLLAR GENERAL – CALCULATION OF ADJUSTED EBITDA

(in millions)

Year Ended

January 28, 2011

January 29, 2010

Net income $ 627.9 $ 339.4 Add (subtract): Interest income (0.2) (0.1) Interest expense 274.1 345.6 Depreciation and amortization 242.3 241.7 Income taxes 357.1 212.7 EBITDA 1,501.2 1,139.3

Adjustments: Loss on debt retirements 14.6 55.3 Loss on hedging instruments 0.4 0.5 Inventory clearance - (7.3) Advisory and consulting fees to affiliates 0.1 63.5 Non-cash expense for share-based awards 16.0 18.7 Indirect merger-related costs 1.3 10.6 Other non-cash charges (including LIFO) 11.5 6.6 Total Adjustments 43.9 147.9

Adjusted EBITDA $ 1,545.1 $ 1,287.2

Source: Company 10-K filing, The Manual of Ideas.



DOLLAR GENERAL – COMPARABLE COMPANY VALUATION FOR SELECTED U.S. “DOLLAR STORES” AND WAL-MART

Recent EV / EV / EV / EV / % of Share MV EV Trailing Trailing Trailing store sq ft Stores

Company Ticker Price ($bn) ($bn) Revenue EBITDA P/E P/TB ($mn) ($) Owned?

99 Cents Only Stores NDN $18.27 $1.3 $1.1 0.7x 7.3x 17.2x 1.8x $3.7 $175 ~25%

Big Lots BIG 32.11 2.4 2.1 0.4x 5.0x 11.3x 2.4x 1.5 71 <5%

Dollar Tree DLTR 67.08 8.2 7.8 1.3x 9.0x 18.6x 5.8x 1.8 214 <5%

Family Dollar FDO 48.20 5.8 6.0 0.7x 7.5x 16.1x 4.9x 0.9 122 <10%

Average: 0.8x 7.2x 15.8x 3.7x $2.0 $145 n/m

Median: 0.7x 7.4x 16.7x 3.7x $1.7 $149 n/m

Dollar General DG $32.80 $11.2 $13.8 1.0x 8.7x 17.5x neg. $1.5 $203 <5%

Wal-Mart Stores1 WMT 53.03 184.1 233.7 0.5x 6.9x 11.3x 3.8x 25.9 232 >85% (U.S. only)

1 Wal-Mart figures are based on consolidated financials, including its total store base (includes significant non-U.S. operations). Source: Company data, The Manual of Ideas analysis. DOLLAR GENERAL – STORES, mostly leased, as of February 25, 2011

State Number of Stores State Number of Stores

Alabama 512 Nebraska 79 Arizona 61 New Jersey 44 Arkansas 268 New Mexico 46 Colorado 27 New York 245 Delaware 29 North Carolina 536 Florida 505 Ohio 510 Georgia 541 Oklahoma 295 Illinois 352 Pennsylvania 421 Indiana 358 South Carolina 375 Iowa 169 South Dakota 12 Kansas 173 Tennessee 489 Kentucky 363 Texas 1,081 Louisiana 369 Utah 8 Maryland 72 Vermont 11 Michigan 270 Virginia 265 Minnesota 16 West Virginia 161 Mississippi 310 Wisconsin 93 Missouri 348 = 9,414 retail stores in 35 states

Source: Company 10-K filing, The Manual of Ideas. DOLLAR GENERAL – SELECTED OPERATING DATA

Successor Predecessor

Year Ended Year Ended

January 28, 2011

January 29,2010

January 30,2009

March 6, 2007

through February 1,

2008

February 3,2007

through July 6, 2007

February 2,2007

Same store sales (‘000) $ 12,227 $ 11,356 $ 10,118 $ 5,264 $ 3,656 $ 8,327 Same store sales growth 4.9% 9.5% 9.0% 1.9% 2.6% 3.3%

Stores in SSS calculation 8,712 8,324 8,153 7,735 7,655 7,627

Number of stores (end) 9,372 8,828 8,362 8,194 8,205 8,229

Selling square feet (‘000) (end) 67,094 62,494 58,803 57,376 57,379 57,299

Net sales per square foot $ 201 $ 195 $ 180 $ 165 $ 164 $ 163

Consumables sales 71.6% 70.8% 69.3% 66.4% 66.7% 65.7%

Seasonal sales 14.5% 14.5% 14.6% 16.3% 15.4% 16.4%

Home products sales 7.0% 7.4% 8.2% 9.1% 9.2% 10.0%

Apparel sales 6.9% 7.3% 7.9% 8.2% 8.7% 7.9%

Source: Company 10-K filing, The Manual of Ideas.



Female Health (FHCO) – Bares Consumer Non-Cyclical: Personal & Household Products Chicago, IL, 312-595-9123 www.femalehealth.com




Market value: $117 million This quarter n/a n/a n/a P/E FYE 9/29/12 22x

Enterprise value: $113 million Next quarter n/a n/a n/a P/E FYE 9/29/13 18x



Insider ownership: 7% FYE 9/29/13 0.23 n/a 1 P / tangible book 8.6x

Insider buys (last six months): 0 LT growth n/a n/a n/a Greenblatt Criteria


Institutional ownership: 25% 8/5/11 n/a n/a LTM pre-tax ROC 59%



per share data) 9/30/04 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 9/30/10 6/30/11 6/30/10 6/30/11

Revenue 9 11 15 19 26 28 22 19 2 4

Gross profit 4 4 6 7 11 14 13 10 1 2

Operating income (1) (1) 0 1 3 5 4 4 0 0

Net income (2) (2) 0 2 5 6 7 6 0 0

Diluted EPS (0.11) (0.07) 0.00 0.06 0.18 0.24 0.24 0.22 0.00 0.01

Shares out (avg) 20 23 24 25 26 26 27 27 27 27

Cash from operations (0) (0) 0 (0) 4 6 4 5 0 2

Capex 0 0 0 1 0 2 0 0 0 0

Free cash flow (0) (1) 0 (1) 4 4 4 5 0 2


Total current assets 4 5 7 10 12 15 12 9 10 9

Intangible assets 0 0 0 0 0 0 0 0 0 0

Total assets 5 6 7 11 14 19 18 15 14 15

Short-term debt 1 1 0 0 0 0 0 0 0 0

Total current liabilities 1 1 2 2 3 5 2 2 2 2

Long-term debt 0 0 0 0 0 0 0 0 0 0

Total liabilities 3 2 3 4 4 6 2 2 2 2


Common equity 2 3 5 7 10 13 16 14 12 14

EBIT/capital employed -46% -48% 6% 15% 37% 52% 46% 59% n/m n/m


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Aug 11Aug 10Aug 09Aug 08Aug 07Aug 06Aug 05Aug 04Jul 03Jul 02



BUSINESS OVERVIEW The Female Health Co. manufactures and markets the FC2 female condom, available in the U.S. and ~120 other countries. INVESTMENT HIGHLIGHTS

Developer of the FC2 female condom – the only available FDA-approved product controlled by a woman that offers dual protection against sexually transmitted diseases (including HIV) and pregnancy.

Benefits versus male latex condoms may include: an alternative for latex-irritated users (no allergies reported for FC2), less tear (due to nitrile polymer material), enhanced pleasure (due to heat transfer). Like traditional condoms, the FC2 is not reusable.

Profitable since 2005 as market acceptance enabled higher volume, profitable production. New investors benefit from ~25 years of research and $140+ million spent by private investors since the mid-1980s (~1.1x recent EV) to launch the female condom.

Downside limited by consistent FCF, dividends (~4% yield), and no debt. Since FY08, free cash flow has run at ~$4 million per year, including during a transition to the second generation FC2 product in FY 2009 (FC1 is no longer produced).

Large target market and a proven, patented product offer upside potential. The UN Joint Programs on AIDS estimates that the annual global public sector market for male and female condoms will grow to 19 billion units by 2020 (2010: ~10bn).

Potential acquisition candidate? A large consumer healthcare company may accelerate the growth of FC2 by running the product through existing marketing and distribution channels.

Approved by the World Health Organization for purchase by United Nations’ agencies since 2006.

Manufactured in Malaysia (by the company) and India (by a distributor who pays royalties). Capacity in Malaysia is ~80 million units annually.

Low cash taxes due to large NOLs in the U.S./U.K. Chairman and CEO Parrish (77) owns 5%; other

insiders own 25+%. Parrish became CEO in 1994. INVESTMENT RISKS & CONCERNS

Ultimate market size and product economics may not justify a valuation of 7x trailing revenue. Revenue has been lumpy and on the decline since FY09. Unit prices – advertised by walgreens.com at ~$1.60 for a 3-pack – are significantly lower for bulk sales into poor countries (key market). From launch in 2007 through mid-2010, only ~62 million FC2 condoms have been distributed (not sold?) globally.


FYE September 30 2006 2007 2008 2009 2010 YTD

6/30/11 revenue 33% 30% 33% 7% -19% -21% EBIT n/m 276% 252% 48% -8% -23% employees (end) 30% 4% 1% -67% -13% n/a Revenue ($mn) 15 19 26 28 22 11 % of revenue by geography: U.S. 14% 13% 9% 9% 7% 14% South Africa 8% 19% 17% 9% 11% 10% Zimbabwe 7% 21% 16% 32% 8% 8% Other 71% 46% 58% 50% 74% 68% Revenue growth by geography: U.S. -9% 21% -6% 6% -36% 60% South Africa -46% 222% 15% -43% 5% -56% Zimbabwe 53% 285% 0% 118% -81% -13% Other 74% -15% 66% -8% 20% -21% Selected items as % of revenue: Gross profit 37% 37% 42% 49% 58% 49% Restructuring costs, net 0% 0% 0% 5% 9% 0% EBIT 2% 5% 12% 17% 20% 9% Net income 2% 9% 19% 24% 30% 8% Net cash from ops 2% 0% 17% 21% 18% 40% D&A 1% 1% 1% 1% 2% 3% Capex 1% 5% 1% 6% 0% 0% Employees (end)1 159 166 168 55 48 n/a Return on tang. equity 7% 28% 58% 58% 46% 7% Tangible equity/assets 62% 66% 69% 70% 79% 87% shares out (avg) 3% 5% 5% -2% 5% 1%

1 As of December of each year. As of December 1, 2010, the company had 48 full-time employees, including 9 in the U.S., 12 in the U.K., and 20 in Malaysia.

Relies on support by governments/non-profits.

The FDA approved FC2’s predecessor – FC1 – as far back as 1993. Since then, the female condom has not been able to compete effectively for customers unless aided by non-private funds. Such funds may be reduced, especially as public finances worsen.

Declining revenue since the launch of FC2. While this may be temporary, it is not a good sign.

Competition from emerging female condom makers (e.g. India-based Medtech) and dominance by traditional, male condoms such as Durex/Trojan, which are made in the billions of units (scale benefits).

MAJOR HOLDERS CEO Parrish 5% | Other insiders 27%* | Bares 10% | Soros 5% * Includes holdings of directors Dearholt (12%) and Wenninger (9%).

RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Shares of The Female Health Company offer an intriguing proposition: at the recent valuation, downside is limited by consistent FCF, dividends (~4% yield), and no debt. While the company has only one product – the patented female condom FC2 – the upside could be multiples of the recent share price if management can realize a modest share of the worldwide addressable market. The company may also be an attractive acquisition candidate for a larger consumer healthcare firm that could run the product through existing marketing and distribution channels. Insider ownership of 30+% is another positive.



FEMALE HEALTH – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 5% required FCF

yield (based on avg FCF in FY08-10)

Simplified 10-year DCF model (see

assumptions below)

Simplified 10-year DCF model (see

assumptions below)

Conservative case valuation: Average 3-year free cash flow (FY08-10)1 $4 million Required FCF yield 5% Estimated fair value of the equity $80 million Base case and aggressive case valuation: Assumed FY2010-20 revenue CAGR2 15% 30% Implied revenue in FY20202 $90 million $300 million Assumed EBIT margin in FY20203 30% 30% Implied EBIT in FY2020 $27 million $90 million Assumed fair value multiple 12x 15x Estimated enterprise value in FY2010 $324 million $1,350 million Plus: Estimated net cash in 20204 0 0 Estimated fair value of the equity in 2020 $324 million $1,350 million Assumed discount rate 10% 10%

Estimated fair value of the equity of The Female Health Co.5 $80 million $125 million $520 million

$3 per share $4 per share $18 per share Implied upside/(downside) to recent stock price (~$4.50 per share) -38% -4% 298% Implied valuation metrics based on trailing financials: EV to revenue (~$20 million) 4x 6x 27x FCF yield (trailing FCF: $5 million) 6% 4% 1% Annualized dividend yield (latest quarterly dividend: $0.05/share) 7% 5% 1% Other implied valuation metrics: Equity value divided by private investment to date ($140 million)6 0.6x 0.9x 3.7x EV-to-theoretical revenue if 500M condoms sold at $0.50 each7 0.3x 0.5x 2.1x

1 Trailing free cash flow is ~$5 million for the year to June 2011. 2 The company has grown revenue at a ~15% CAGR from $11 million in FY05 to $22 million in FY10. Average revenue during FY05-10 was $20 million. Assuming the average price of a female condom is $0.50, our revenue estimates for FY2020 imply 180 million condoms sold in the base case and 600 million condoms sold in the aggressive case. From introduction in 2007 through March 2010, ~62 million FC2 Female Condoms have been distributed in 107 countries, based on company information. A recent query at walgreens.com reveals a unit price of ~$1.60 for the FC2 female condom based on the purchase of a 3-pack (similar to the unit price based on selected Trojan-branded latex condoms in a 3-pack). The unit price for bulk sales into developing countries is significantly lower. 3 Trailing EBIT margin is ~20% (on revenue of ~$20 million). 4 The company had $3 million of cash and no debt as of June 30, 2011. In our DCF, we ignore the value of future FCF generation (some of which will likely be needed to expand production capacity if our revenue assumptions materialize). 5 Based on ~29 million diluted shares outstanding. 6 According to the company, “since the mid-1980s, private investors have put up more than $140 million to develop, secure regulatory approvals and launch the Female Condom. Annual losses for FHC and predecessor company Wisconsin Pharmacal Company (WPC) occurred for the first 18 years, from 1988 to 2005.” 7 From introduction in 2007 through March 2010, ~62 million FC2 Female Condoms have been distributed in 107 countries, based on company information. A recent query at walgreens.com reveals a unit price of ~$1.60 for the FC2 female condom based on the purchase of a 3-pack (similar to the unit price based on selected Trojan-branded latex condoms in a 3-pack). The unit price for bulk sales into developing countries is likely significantly lower. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

FEMALE HEALTH – HISTORICAL DEVELOPMENT MILESTONES

1980s: A Danish physician invents the Female Condom and sells the rights to Chartex Resources Limited, a private British company. In the early years, Chartex was financially supported by a Danish entrepreneur and a Danish foundation.

1987: Chartex selects FHC’s predecessor company, Wisconsin Pharmacal Company (WPC), as U.S. licensee for FC Female Condom. 1993: WPC secures Food and Drug Administration (FDA) approval for the Female Condom. 1994: Chartex secures FDA approval for its U.K.-based manufacturing facility to export Female Condoms to the United States. 1996: The WPC entity legally changes its name to The Female Health Company, a U.S. public company. FHC purchases Chartex and now owns

worldwide rights to the Female Condom, and begins to build partnerships and alliances with global public health agencies and governments. 2003: To promote proper use and educate women worldwide, FHC establishes the Global Public Sector (GPS) team. This development is critical

to develop a global market for the Female Condom. 2003: FC1 unit sales reach 13.4 million; FHC begins development of FC2. 2005: FHC submits a scientific dossier for FC2 to the World Health Organization (WHO) and secures European Union approval for FC2. 2006: FC2 receives clearance from WHO for bulk purchases of FC2 by United Nations agencies. This is also the year India and Brazil regulatory

agencies approve FC2, and FHC experiences its first profitable year. 2007: Distribution of FC2 begins in countries outside of the United States. 2008: The U.S. FDAs OB-GYN Advisory Committee unanimously recommends to the FDA that FC2 be approved. 2008: Combined unit sales for FC1 and FC2 top 34 million. 2009: FC2 approved by the U.S. Food and Drug Administration. 2009: FHCO listed on the NASDAQ-CM stock exchange.

Source: Company website, http://bit.ly/pvoxnb. For a description of the FC2 product, visit http://www.fc2.us.com



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Flextronics (FLEX) – Glenview Technology: Semiconductors Singapore, Singapore, 65--654-2888 www.flextronics.com











Institutional ownership: n/a 7/21/11 $0.21 $0.22 LTM pre-tax ROC 27%



per share data) 3/31/05 3/31/06 3/31/07 3/31/08 3/31/09 3/31/10 3/31/11 7/1/11 7/2/10 7/1/11

Revenue 15,731 15,288 18,854 27,558 30,949 24,111 28,680 29,662 6,566 7,548

Gross profit 932 748 929 1,176 1,281 1,218 1,585 1,614 371 400

Operating income 339 241 286 24 (6,130) (17) 616 705 130 149

Net income 340 141 470 (681) (6,136) 19 596 610 118 132

Diluted EPS 0.57 0.18 0.47 (0.95) (7.47) 0.02 0.75 0.79 0.14 0.17

Shares out (avg) 553 574 589 721 821 812 777 770 811 747

Cash from operations 724 549 276 1,043 1,317 799 857 905 89 136

Capex 290 251 569 328 462 177 471 475 119 123

Free cash flow 435 298 (293) 715 855 622 387 430 (30) 13

Cash & investments 869 943 715 1,720 1,822 1,928 1,749 1,558 1,731 1,558


Intangible assets 3,048 2,792 3,264 5,877 292 255 213 204 235 204

Total assets 11,010 10,958 12,341 19,525 11,317 10,643 11,633 12,183 11,295 12,183

Short-term debt 26 106 8 29 208 267 21 180 415 180


Long-term debt 1,709 1,489 1,494 3,388 2,734 1,990 2,199 2,034 1,979 2,034



Common equity 5,224 5,355 6,177 8,164 1,861 1,985 2,295 2,237 1,971 2,237

EBIT/capital employed 20% 14% 14% 1% -207% -1% 26% 27% n/m n/m


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BUSINESS OVERVIEW Flextronics provides electronics manufacturing and supply chain services to original equipment manufacturers (OEMs). INVESTMENT HIGHLIGHTS

One of the world’s largest providers of electronics manufacturing services (EMS), with a capacity of 27 million square feet (48 million sq ft, including services). Flextronics helps OEMs design, build, ship, and service electronics products worldwide.

Shares trade at a ~6x trailing P/E despite a solid balance sheet and good long-term prospects. Net debt is only $650 million as of July 1 (~0.5x trailing EBITDA). Despite cyclicality, Flextronics should benefit from attractive long-term demand growth.

Demand drivers: global GDP growth, electronics proliferation, and outsourcing. IDC estimates the worldwide EMS industry will grow at an 8% CAGR, from $173 billion in 2010 to $257 billion in 2015.

Competitive advantages from global scale and capabilities across a products’ lifecycle (design, production, distribution, and aftermarket services).

Exploiting services opportunities outside EMS industry; improving margins through better mix of higher-value added products in emerging sectors (e.g. clean-tech) and more customized offerings, instead of less desirable, “high-velocity” products (43% of FY11 revenue; e.g. mobile phones, PCs).

Long-term management targets: 10+% revenue growth, 3.5+% operating margin, 15+% EPS and FCF growth; 20+% return on invested capital.

Repurchased 65 million shares (~8%) in FY11.

INVESTMENT RISKS & CONCERNS Valuation is less attractive on average 5-year

financials, which may be more representative of normalized earning power than trailing financials. Flextronics operates in a cyclical industry which is vulnerable to a global economic slowdown. Trailing revenue and EBIT margins are near record-levels.

Exposure to struggling Research in Motion (10+% of FY11 revenue), H-P (10+% of FY10 revenue), and Sony-Ericsson (10+% of FY09 revenue).

Competition from other global EMS providers and smaller EMS firms with regional or product focuses. Asian-based rivals, including Taiwanese original design manufacturers, may be an increasing threat.

Potential for higher taxes and increased costs of doing business in China (~40% of FY11 revenue) and other key company locations (Mexico, Hungary).

SELECTED OPERATING DATA1 FYE March 31 2007 2008 2009 2010 2011 F1Q12 revenue 23% 46% 12% -22% 19% 15% EBIT 78% -62% -67% 169% 398% 9% employees (end) 17% 40% -1% 3% 7% n/a Revenue ($bn) 18.9 27.6 30.9 24.1 28.7 7.5 % of revenue by geography:2 Asia 61% 56% 49% 48% 52% n/a Americas 22% 28% 33% 32% 29% n/a Europe 17% 16% 17% 19% 19% n/a Revenue growth by geography: Asia 35% 34% -2% -24% 28% n/a Americas 24% 87% 34% -24% 7% n/a Europe -7% 37% 24% -13% 18% n/a % of net PP&E by geography:3 Asia 63% 56% 53% 52% 53%4 n/a Americas 20% 26% 28% 30% 28%5 n/a Europe 16% 17% 19% 18% 20%6 n/a Selected items as % of revenue: Gross profit 5% 4% 4% 5% 6% 5% EBIT 2% 1% 0%7 1% 2% 2% Net income 1% -2% -20% 0% 2% 2% D&A 2% 3% 2% 3% 2% 2% Capex 3% 1% 2% 1% 2% 2% Employees (000s; end) 116 162 160 165 176 n/a Return on tang. equity 10% -25% -312% 1% 31% 28%8 Tangible equity/assets 32% 24% 16% 15% 17% 16% shares out (avg) 3% 22% 14% -1% -4% -8%

1 Financials are based on U.S. GAAP (Flextronics is incorporated in Singapore); Solectron is included from its acquisition in October 2007. 2 Based on the country in which the product is manufactured or service is provided. 3 Based on the location of the manufacturing sites. 4 China was ~40% of the figure. 5 Mexico was ~60%. 6 Hungary was ~40%. 7 EBIT excludes $6.0 billion goodwill impairment. 8 Annualized.



JBL 3,110 3,390 .2x 1.7x 6x 6x

CLS 1,430 920 .1x 1.1x n/a n/a

BHE 750 450 .2x .7x 10x 8x

PLXS 870 950 .4x 1.5x 11x 9x

SANM 580 1,210 .2x .8x 5x 4x

FLEX 3,770 4,430 .1x 1.9x 6x 5x

MAJOR HOLDERS CEO McNamara 1% | Other insiders 1% | Cap Re 12% | Franklin 11% | Primecap 6% | Glenview 5% | Jennison 5% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Shares of contract manufacturing pioneer Flextronics appear cheap at a trailing P/E of ~6x. Unfortunately trailing earnings may be a bad indicator of “normalized” earnings in this cyclical and competitive industry. The valuation is less attractive based on average 5-year financials. Nonetheless, long-term investors may want to take a closer look at the powerful secular demand drivers and Flextronics’ scale-driven competitive advantage. With little net debt, Flextronics appears in good shape to ride out any near-term challenges. The recently announced additional share buybacks may increase shareholder value.



FLEXTRONICS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 1x tangible book 10% required FCF yield (based on avg

FY07-11 FCF) 12x trailing EBIT

Conservative case valuation: Tangible shareholders’ equity (7/1/2011) $2.0 billion Fair value multiple 1.0x Estimated fair value of the equity $2.0 billion Base case valuation: Average FCF during FY07-111 $435 million Required FCF yield 10% Estimated fair value of the equity $4.4 billion Aggressive case valuation: TTM EBIT (year to June 2011)2 $705 million Fair value multiple 12x Estimated enterprise value $8.5 billion Minus: Net debt (as of 7/1/2011) -656 million

Estimated fair value of the equity of Flextronics3 $2.0 billion $4.4 billion $7.8 billion

$2.80 per share $5.90 per share $10.70 per share Implied upside/(downside) to recent stock price ($5.10 per share) -45% 16% 110% Implied valuation metrics based on FY2007-11 average financials:4 EV to revenue ($26 billion) 0.10x 0.19x 0.33x EV to gross profit ($1.2 billion) 2x 4x 7x EV to EBIT (~$290 million) 9x 17x 29x FCF yield (average FY07-11 FCF: $435 million) 21% 10% 6% Other implied valuation metrics: Price to tangible book ($2.0 billion) 1.0x 2.1x 3.8x

1 Free cash flow averaged ~$435 million during FY07-11, which is in-line with trailing FCF of $430 million. 2 Trailing EBIT of $705 million is a company record and significantly above the 5-year average EBIT of ~$300 million, excluding the $6 billion goodwill impairment charge in FY09. The trailing EBIT margin of ~2.5% is above the 5-year average of ~1.25%. Management’s EBIT target margin is 3.5+%. 3 Based on ~730 million shares outstanding. 4 FY07-11 financials include Solectron from its acquisition in October 2007. Fiscal years refer to years ended in March of the stated year. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

FLEXTRONICS – HISTORY OF REVENUE GROWTH

Source: Company presentation dated August 2011, available at http://bit.ly/o2reF3



FLEXTRONICS – QUARTERLY REVENUE BY BUSINESS GROUP

FLEXTRONICS – DIVERSIFICATION OF REVENUE ACROSS BUSINESS SEGMENTS

FY2007 FY2011 FY2013E

FLEXTRONICS – GEOGRAPHIC DIVERSIFICATION

Source: Company presentation dated August 2011, available at http://bit.ly/o2reF3



Fresh Market (TFM) – Scout Services: Retail (Grocery) Greensboro, NC, 336-272-1338 www.thefreshmarket.com




Market value: $1.5 billion This quarter $0.19 n/a 6 P/E FYE 1/30/13 24x

Enterprise value: $1.6 billion Next quarter 0.21 n/a 6 P/E FYE 1/30/14 19x

Shares out: 48.0 million FYE 1/31/12 1.13 n/a 6 EV/ LTM revenue 1.3x

Ownership Data FYE 1/30/13 1.33 n/a 7 EV/ LTM EBIT 25x

Insider ownership: <1% FYE 1/30/14 1.64 n/a 4 P / tangible book 17.4x






per share data) 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 5/1/11 12/31/09 5/1/11

Revenue 460 589 728 798 862 974 1,239 256 265

Gross profit 139 174 222 243 277 319 409 85 90

Operating income 23 24 36 37 53 41 63 22 22

Net income 20 20 30 32 49 23 36 21 14

Diluted EPS 0.42 0.42 0.63 0.66 1.03 0.48 0.76 0.43 0.28

Shares out (avg) 48 48 48 48 48 48 48 48 48

Cash from operations 49 60 85 111 86 57 32

Capex 59 65 36 42 30 25 13

Free cash flow (10) (4) 48 69 56 32 19

Cash & investments 6 3 4 10 0 10

Total current assets 44 40 53 51 0 51

Intangible assets 0 0 0 0 0 0

Total assets 234 236 258 272 0 272

Short-term debt 0 0 0 0 0 0

Total current liabilities 57 57 68 81 0 81

Long-term debt 130 98 83 66 0 66

Total liabilities 196 167 189 186 0 186

Preferred stock 0 0 0 0 0 0

Common equity 38 68 69 86 0 86

EBIT/capital employed 22% 31% 23% 71% n/m n/m


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BUSINESS OVERVIEW The Fresh Market is a food retailer, operating106 stores in 21 U.S. states, mainly in the Southeast, Midwest and Mid-Atlantic.

Stores, which are leased, are mainly in suburban areas and average ~21,000 square feet (versus 40- 60k square feet at conventional supermarkets). The average cost of a new store is $4 million, incl. build-out costs and inventory, net of payables. INVESTMENT HIGHLIGHTS

Fast-growing, small-format U.S. food retailer focused on quality food and a “neighborhood grocer” atmosphere that encourages employee-customer interaction. Examples include hand-stacked produce, hand-trimmed steaks, and French-style baguettes baked in-store each morning.

Able to replicate the success of Whole Foods? While The Fresh Market is not as focused on organic-only, its emphasis on food quality and service attracts a similar customer (health conscious, less driven by price). Two-thirds of revenue is from perishable food categories, similar to Whole Foods.

May self-finance a targeted 15% “long-term” store growth rate per year if recent profitability per store can be sustained. Stores tripled to 100+ since 2000 and EBIT margins increased to 7-8%.

Targeting 12-14 new stores in FY11 (up 12-14% y-y), same-store sales growth of 4-5% y-y (Q1: up 4% y-y), and 20-50 bps of operating margin growth. Total capex is estimated at $85-90 million.

Founded in ‘81 by chairman Berry, whose family owns 30+% following sales in the IPO and in 2011.

INVESTMENT RISKS & CONCERNS May not scale as rapidly and profitably as the

recent valuation requires. At an EV-to-trailing revenue and adjusted EBIT of 1.7x and 24x, respectively, there is no margin of safety.

Reinvestment risk due to the rapid growth strategy and a weak U.S. economy. It took the founding Berry family ~30 years to get to 100 stores. Adding another 100 stores in just five years may lead to poor new store locations and worsening customer service.

Recent EBIT margin of 8% leaves little room for improvement. The average 5-year margins of Wal-Mart, Whole Foods and Publix are 6%, 5% and 8%, These are all much bigger and well-run operations.

Insider selling. The Berry family sold shares in the 2010 IPO. It sold another ~12 million shares in an April 2011 secondary offering at $42.50 per share.

SELECTED OPERATING DATA FYE December 31 2007 2008 2009 2010 F1Q111 same-store sales2 5% -2% 1% 5% 4% stores (end) 22% 12% 7% 9% 6% revenue 24% 10% 8% 13% 10% EBIT 50% 3% 43% 32% 8% Revenue ($mn) 728 798 862 974 264 Selected items as % of revenue Gross profit 30% 30% 32% 33% 34% Store closure and exit costs 0% 0% 1% 0% 0% BIT % 5% 6% 7%3 8% Net income4 3% 2% 4% 2% 5% D&A 4% 4% 3% 3% 3% Capex 7% 8% 4% 4% 5% Stores (end) 77 86 92 100 101 Gross square footage (mn; end) 1.6 1.8 2.0 2.1 2.1 gross sq ft 25% 14% 8% 9% 6% Same-store sales/gross sq ft ($)5 533 498 472 481 1 5 s-s sales/gross sq ft5 1% -7% -5% 2% 2% Return on tangible equity 66% 54% 57% 34% 17% Tangible equity to assets 17% 17% 23% 28% 29%

1 In January 2011, the company changed its FYE from December 31 to the last Sunday in January. As a result, there was a one-month transition period (not included in the table). Q1 2011 includes the period from January 31 to May 1, 2011 (y-y changes are based on the comparable period in 2010). 2 Includes sales beginning on the first day of the sixteenth full month following a store’s opening. When a store that is included in same-store sales is remodeled or relocated, sales from that store continue to be included in same-store sales. 3 Excludes $29 million of IPO-related expenses. 4 Net income prior to November 2010 (when the company converted from an S to a C corporation) is stated after pro-forma income tax provisions. 5 Calculated using the gross square footage and sales for stores included within same-store sales. The y-y growth rate differs from same-store sales growth because the company includes remodeled or relocated stores (with related changes in store square footage) in its calculation of same-store sales.



WMT 181,610 230,590 .5x 3.9x 12x 11x

KR 13,740 20,690 .2x 3.4x 11x 10x

WFM 10,070 9,550 1.0x 4.8x 30x 25x

SWY 5,980 10,790 .3x 1.4x 10x 9x

TFM 1,500 1,560 1.3x 17.4x 28x 24x

MAJOR HOLDERS Berry family 36% | Other insiders 2% | FMR 11% | Scout 5% T. Rowe 4% | Eagle Asset 2% | Granahan 2% | Wellington 2% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Founded by chairman Ray Berry in 1981, U.S. food retailer The Fresh Market has grown to ~100 stores and $1.0 billion of annual revenue. The small-store format, which offers fresh, premium food and superior service, has been embraced by quality-oriented, less price-sensitive customers. The resulting high-ROIC model appears able to self-finance new store growth at a rate of 10-15% per year, which could lead to significant value creation over time. While recent insider selling is not encouraging, the founding Berry family continues to own 30+% of the shares. Management’s expansion strategy, however, carries reinvestment and execution risks, which do not appear adequately reflected in the recent valuation.



FRESH MARKET – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology Based on the company’s store expansion strategy, we use a

simplified DCF model in each of the three valuation cases

Estimated market potential and “steady-state” revenue derivation:

Existing number of stores (yearend 2010) 100 100 100

Management’s annual store growth target (long-term)1 15% 15% 15%

Management’s estimate for the minimum store potential in the U.S.2 500+ 500+ 500+

Implied year by which store capacity is reached (assuming 15% CAGR) 2022 2022 2022

Estimated total revenue in 2022 (average of $10 million per store)3 $5.0 billion $5.0 billion $5.0 billion

DCF valuation assumptions and equity fair value estimation:

Estimated revenue in 2022 (from above) $5.0 billion $5.0 billion $5.0 billion

Estimated “normalized” EBIT margin4 5.0% 7.5% 10.0%

Implied EBIT in 2022 $250 million $375 million $500 million

Fair value multiple5 8x 10x 12x

Estimated enterprise value in 2022 $2.0 billion $3.8 billion $6.0 billion

Plus: Estimated net cash in 20226 $0 $0 $0

Estimated fair value of the equity in 2020 $2.0 billion $3.8 billion $6.0 billion

Assumed discount rate 10% 10% 10%

Estimated fair value of the equity of The Fresh Market7 $700 million $1.3 billion $2.1 billion



Implied valuation metrics based on trailing financials:

EV to revenue ($1.0 billion) .8x 1.4x 2.2x

EV to adjusted EBIT (~$70 million) 11x 19x 31x

EV per existing store (106 stores as of August 2011) $7 million $13 million $20 million

1 2006-10 store growth CAGR: ~12%. Management believes that “long term unit growth rate of 15% annually is achievable and appropriate for our business.” 2 Based on estimates per The Buxton Company, a market research firm, as presented in The Fresh Market’s investor presentation from June 14, 2011 (page 16). For reference, Whole Foods (WFM) has ~300 U.S. stores (an average Whole Foods’ store is roughly twice the size of the average store of The Fresh Market). 3 Revenue per store has averaged $10 million during 2007-10 ($450-500 per gross square foot). 4 The EBIT margin averaged 5% during 2006-10 (2010: 7+%). For reference, the last five years’ EBIT margins of Wal-Mart, Whole Foods and Publix have averaged 6%, 5% and 8%, respectively. 5 The range of multiples reflects different assumptions for growth prospects after reaching 500 stores. According to management/The Buxton Company, 500 stores would represent only ~20% “saturation” of the U.S. market. Of course, such estimates are speculative and may not accurately describe the market opportunity for the company’s business model (especially if high-single digit EBIT margins are to be sustained). 6 Net debt is ~$55 million as of May 1, 2011. For the purposes of our valuation, we assume that free cash flow generated from 2011 through 2022 is used to finance store growth at the 15% annual growth rate as targeted by management (and assumed in our valuation). As a result, we estimate the company is cash/debt free in 2022. For reference, the company generated ~$95 million of adjusted EBITDA in 2010 and plans to spend $85-90 million on capital expenditures during fiscal 2011, of which ~90% will be “in connection with opening new stores and relocating and remodeling existing stores, with the remainder being used for other capital expenditures.” Management plans to open 12-14 new stores in FY11, which implies 12-14% y-y growth. The cost of an average new store is ~$4 million, including build-out costs and initial inventory, net of payables. 7 Based on ~48 million shares outstanding. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. FRESH MARKET – ADJUSTED OPERATING PROFITABILITY, 2006-2010

Source: Company presentation dated June 14, 2011, available at http://bit.ly/pmzIZZ



FRESH MARKET – CALCULATION OF ADJUSTED EBITDA, 2006-2010

FRESH MARKET – TYPICAL NEW STORE ECONOMICS

Store Size: ~17,000 – 22,000 gross square feet

First-Year Sales: ~$8–10 million

Net Investment:1 ~$3–4 million for “build-to-suit”; ~$3.5–4.5 million for “as-is”

4-Wall Cash Flow Contribution: Year One = Greater than 10%; Year Five = Mid-Teens

2010 Total Company ROIC: 24.7%2 1 Includes build-out costs and initial inventory, net of payables. 2 (1-Tax Rate)*(EBIT)/(Average Assets – Average Cash – Average Non-Interest Bearing Current Liabilities). Excludes IPO-related adjustments. FRESH MARKET – ROOM FOR U.S. STORE GROWTH

Source: Company presentation dated June 14, 2011, available at http://bit.ly/pmzIZZ



HomeAway (AWAY) – Tiger Global Technology: Internet Austin, TX, 512-684-1100 www.homeaway.com




Market value: $2.8 billion This quarter $0.11 n/a 6 P/E FYE 12/31/12 66x

Enterprise value: $2.7 billion Next quarter 0.11 n/a 6 P/E FYE 12/31/13 n/a

Shares out: 80.6 million FYE 12/31/11 0.46 n/a 6 EV/ LTM revenue 13x

Ownership Data FYE 12/31/12 0.53 n/a 6 EV/ LTM EBIT 158x

Insider ownership: 66% FYE 12/31/13 n/a n/a n/m P / tangible book 10x

Insider buys (last six months): n/a LT growth n/m n/m n/m Greenblatt Criteria

Insider sales (last six months): n/a EPS Surprise Actual Estimate LTM EBIT yield 1%

Institutional ownership: n/a n/a n/a n/a LTM pre-tax ROC n/m



per share data) 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 18 54 82 120 168 201 42 59

Gross profit 15 47 71 102 142 170 35 50

Operating income (5) 7 9 11 14 17 5 7

Net income (8) (6) (6) 8 17 7 15 2

Diluted EPS n/m n/m n/m n/m n/m n/m n/m n/m

Shares out (avg) n/m n/m n/m n/m n/m n/m n/m n/m

Cash from operations (1) 19 32 45 62 68 18 21

Capex 3 3 4 13 10 12 1 3

Free cash flow (3) 16 27 32 51 56 17 18

Cash & investments 105 78 112 112

Total current assets 114 95 137 137

Intangible assets 294 371 379 379

Total assets 427 490 542 542

Short-term debt 0 0 0 0

Total current liabilities 81 115 140 140

Long-term debt 0 0 0 0

Total liabilities 97 128 157 157

Preferred stock 452 479 497 497

Common equity (122) (117) (112) (112)

EBIT/capital employed n/m n/m n/m n/m


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BUSINESS OVERVIEW HomeAway operates an online exchange for vacation rentals. It helps owners and managers market rentals via 30+ sites, incl. HomeAway.com, VRBO.com, and VacationRentals.com. INVESTMENT HIGHLIGHTS

World’s largest online vacation rental marketplace. HomeAway’s websites averaged 9.5 million unique monthly visitors in 2010* and, as of June 30, featured 627,000 paid listings for properties in 145 countries.

Growing rapidly as the large/fragmented vacation rental industry adopts the online exchange model to more efficiently match properties and vacationers. Alone in the U.S. and Europe, there are 6+ million vacation rentals (often family-run, non-branded) turning over an estimated $85+ billion annually.**

Subscription revenue model. 87% of 1H11 revenue is from annual listing fees paid upfront by property owners/managers. Consumers search and compare properties on HomeAway’s websites free of charge and are able to contact owners/managers directly.

Competitive advantage through network effect? HomeAway’s growing property inventory and consumer reviews attract prospective vacationers to its websites. More website “eyeballs” lead to higher listing renewals (~75%) and new property listings.

Exploiting other revenue streams, incl. ads and reservation commissions, and new travel verticals.

CEO Brian Sharples (50) co-founded HomeAway in 2004 and led it through the IPO in July 2011.

~$160 million of cash, no debt after the July IPO.

INVESTMENT RISKS & CONCERNS Valuation. Despite a likely long growth runway and

network effects, an EV-to-trailing revenue multiple of 16x may reflect too optimistic assumptions for future prospects. A margin of safety is non-existent.

Competition from other vacation rental listing websites (e.g. TripAdvisor), exchanges focused on property managers (e.g. Perfect Places) and concepts targeting vacation rental subsegments (e.g. Airbnb).

Direct marketing by property managers and other marketing options may limit the economics for HomeAway (e.g. lowering revenue per listing).

Execution risk due to roll-up strategy; bought 17 companies since 2004, and may continue acquiring.

Dilution from ~11 million stock options. * Source: comScore’s March 2011 Media Metrix Media Trend Report. ** Calculated as (6.1 million properties) x (16 avg weeks rented per year) x ($882 avg weekly rental rate) = $85+ billion. Source: “Market Sizing Study” commissioned by HomeAway from Radius Global Market Research in 2010.


FYE December 31 2008 2009 2010 YTD

6/30/11 paid listings (end)2 n/a 28% 22% 19%3 avg revenue per listing4 n/a 13% 6% 11% revenue 53% 46% 40% 42% EBIT 39% 17% 26% 70% Revenue ($mn) 82 120 168 111 % of revenue by type: Listing 97% 96% 91% 87% Other5 3% 4% 9% 13% % of revenue by geography:6 U S. 63% 58% 62% 61% France 10% 18% 16%

39% U.K. 18% 17% 14% Other 8% 7% 7% Revenue growth – U.S. n/a 34% 49% 42% Revenue growth – International n/a 66% 27% 42% Selected items as % of revenue: Gross profit 87% 85% 85% 85% R&D 15% 11% 11% 14% EBIT 11% 9% 8% 7% Net income -7% 6% 10% 3% Net cash from ops 39% 37% 37% 37% D&A 15% 11% 9% 9% Capex 5% 10% 6% 5% Selected operating metrics: Paid listings (‘000) (end) 338 433 528 627 Average revenue per listing ($) 266 300 318 333 Renewal rate (end)7 74% 73% 76% 76% Visits to websites (mn)8 134 181 221 116 visits to websites n/a 35% 22% -7%

1 Certain 2008 figures are not available due to the short history as a public filer. 2 Defined as a fee to list a property advertisement on one or more of HomeAway’s websites. Most listings are sold on a subscription basis, and some listing packages may include listings on more than one website (counted as one paid listing). 3 Up 16% y-y excluding the acquisition of realholidays.com.au in 2Q11. 4 Defined as listing revenue for the period divided by the average of paid listings at the beginning and end of the period and then annualizing the result. 5 Mainly derives from sales of display-based ads, property management software licenses and maintenance, gift cards and commissions for online reservations. 6 Based on the country in which the selling subsidiary of the company is located. 7 Defined as the percentage of paid listings active at the end of the period ended twelve months prior that are still active as of the end of the reported period. 8 Defined as the number of times in a period that a unique person accessed content on a website with at least a 30 minute break between times of access.

MAJOR HOLDERS CEO Sharples 3% | Other insiders 1%* | Austin 22% | Redpoint 18% | TCV 14% | IVP 8% | Tiger Global 6% * Excludes directors Siegel, Brody, Marshall, and Chaffee, who are affiliated with Austin Ventures, Redpoint Ventures, TCV, and IVP, respectively. RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE HomeAway’s ambition is to make every vacation rental property in the world available to every traveler through its online exchange. As the largest such exchange, the company has achieved critical scale and continues to benefit from network effects. The resulting competitive advantage has led to growing profits and may lead to strong value creation over time. Unfortunately, the recent valuation at an EV-to-trailing revenue of ~16x already discounts profits very far into the future. The lack of a margin of safety, therefore, more than offsets our enthusiasm for the company’s attractive business model.



HOMEAWAY – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology1 Due to the company’s rapid growth, we use a simplified DCF model in

each of the three valuation cases (see assumptions below)

Estimated market size and “steady-state” revenue derivation:

Estimated vacation rental properties in the U.S. and Europe 6.0 million 6.0 million 6.0 million

multiplied by estimated average time rented during a year 16 weeks 16 weeks 16 weeks

multiplied by estimated average rental rate $880 per week $880 per week $880 per week

Implied addressable market size2 $85 billion $85 billion $85 billion

Estimated HomeAway market share (by 2020)3 50% 50% 50%

Implied “bookings” through HomeAway in 2020 (A) $42.5 billion $42.5 billion $42.5 billion

Assumed normalized “take-rate” for HomeAway (B)4 2.5% 5.0% 7.5%

Implied HomeAway listing revenue in 2020 (A x B) $1.1 billion $2.1 billion $3.2 billion

Estimated other revenue in 20205 $400 million $700 million $1.0 billion

Estimated total HomeAway revenue in 2020 $1.5 billion $2.8 billion $4.2 billion

implied HomeAway revenue CAGR 2010-2020 (approximate)6 25% 30% 40%

DCF valuation assumptions and equity fair value estimation:

Estimated HomeAway revenue in 2020 (from above) $1.5 billion $2.8 billion $4.2 billion

Estimated “normalized” EBIT margin7 20% 30% 40%

Implied EBIT in 2020 $300 million $840 million $1.7 billion


Estimated enterprise value in 2020 $3.0 billion $8.4 billion $16.8 billion

Plus: Estimated net cash in 20209 $0 $0 $0

Estimated fair value of the equity in 2020 $3.0 billion $8.4 billion $16.8 billion

Assumed discount rate 15% 15% 15%

Estimated fair value of the equity of HomeAway10 $870 million $2.4 billion $4.8 billion




EV to trailing revenue (~$200 million) 4x 11x 23x

EV to trailing EBITDA ($35 million) 20x 64x 131x

EV per paid listing (based on 630,000 paid listings at 6/30/2011)11 $1,000 $4,000 $7,000

1 Given the rapid growth and uncertain future market development of HomeAway’s business, our valuation attempts to illustrate the implications of various assumptions rather than to arrive at specific value estimates. 2 The addressable market size of ~$85 billion (and the related assumptions) are based on the company’s investor presentation from August 2011 (p. 6). As the market size refers to the U.S. and Europe only, it ignores the company’s business opportunities in other vacation rental markets. However, less than 5% of revenue in 1H11 is derived from non-U.S./Europe markets, based on our estimates. 3 The market share estimate of 50% and the timeline for achieving such market share by 2020 are guesses. 4 Based on the company’s investor presentation from August 2011, HomeAway’s recent “take-rate” is 2.5% (p. 7). As this compares to a take-rate of ~15% at Priceline, management appears to suggest in the presentation that achieving a 10% take-rate should be reasonable in its industry. Accordingly, HomeAway management appears to suggest in the presentation that there is an opportunity for ~$8.5 billion of revenue for the total industry (10% x $85 billion). 5 Non-listing revenue was $15 million in 2010 (up ~250% y-y). Non-listing revenue mainly derives from sales of Internet display-based advertising, property management software licenses and related maintenance, gift cards and commissions for online reservations. Our estimates assume roughly a quarter of total revenue will be non-listing related once the company reaches maturity. 6 HomeAway’s revenue grew 40% y-y in 2010 and 42% y-y in 1H11 (including some benefit from acquisitions). 7 EBIT margin was 8% in 2010 (on ~$170 million of revenue). EBIT margin is likely to expand as revenue grows, due to operating leverage in the business model. 8 Reflects the assumption that revenue growth should moderate significantly after 2020, as “steady” state revenue is assumed to have been reached by then. 9 Ignores the ~$150 million of recent net cash and free cash flow generated during the forecast period. Given the company’s history of acquisition-led growth, it may be reasonable to assume that any FCF generated would be used to accelerate the company’s growth through acquisitions. 10 Based on ~92 million diluted shares outstanding, including dilution from existing stock options. Our valuation ignores additional dilution potential in the future. 11 The average revenue per listing was $318 in 2010 (up 6% y-y).

Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.



HOMEAWAY – KEY GROWTH DRIVERS

HOMEAWAY – SELECTED REVENUE STATISTICS

HOMEAWAY – FREE CASH FLOW, 2007-2010

1 2007 and 2008 cash from operations includes cash interest add‐back. 2 2009 capex includes leasehold improvement additions (headquarters capex) of $4.9 million.

Source: Company presentation dated August 2011, available at



Huntington Ingalls (HII) – Greenlight Transportation: Water Transportation, Member of S&P MidCap 400 Newport News, VA, 757-380-2000 www.huntingtoningalls.com













($ millions, except Fiscal Years Ended LTME FQE

per share data) 12/31/08 12/31/09 12/31/10 6/30/11 6/30/11

Revenue 6,189 6,292 6,723 6,569 1,563

Gross profit 700 850 911 876 260

Operating income (2,354) 211 248 243 91

Net income (2,420) 124 135 115 40

Diluted EPS (49.62) 2.54 2.77 2.34 0.81

Shares out (avg) 49 49 49 49 49

Cash from operations 339 (88) 359 (200) 186

Capex 218 181 191 143 20

Free cash flow 121 (269) 168 (343) 166

Cash & investments 0 0 381 381

Total current assets 1,171 1,313 1,994 1,994

Intangible assets 1,744 1,721 1,711 1,711

Total assets 5,036 5,203 5,937 5,937

Short-term debt 537 715 29 29

Total current liabilities 1,954 2,226 1,184 1,184

Long-term debt 283 105 1,844 1,844

Total liabilities 3,599 3,785 4,526 4,526

Preferred stock 0 0 0 0

Common equity 1,437 1,418 1,411 1,411

EBIT/capital employed 24% 14% 20% n/m


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BUSINESS OVERVIEW Huntington Ingalls designs, builds, and maintains ships for the U.S. Navy and Coast Guard in two segments: Newport News (55% of revenue) and Ingalls (45%). The company was spun off from Northrop Grumman in March 2011. INVESTMENT HIGHLIGHTS

Newport News is sole U.S. producer and refueler of nuclear-powered aircraft carriers and one of two U.S. shipyards that build nuclear submarines. Backlog of $11.2 billion (59% funded*) and stable margins provide long-range earnings visibility.

Ingalls produces non-nuclear surface warships for the Navy, Coast Guard, Marines. Backlog of $5.6 billion is 94% funded but EBIT margins have been negative in recent years, leading to inconsistent results. Shift from “lead ship” to serial production should result in margin improvement.**

U.S. Navy’s 30-year plan calls for purchase of 275 ships between 2012-2041. The fleet size should rise to 328 active ships from 286 ships in 2011. Plans include maintenance of the 11-ship fleet of nuclear aircraft carriers, including one newbuild every five years. The Navy expects new ship procurement to average $15.5 billion per year.***

Carrier refueling and maintenance provides predictable revenue. Nuclear carriers must be refueled after 23 years and decommissioned after 50 years. CBO accounts for the refueling of nuclear-powered aircraft carriers at $1.2 billion per year.***

Meets David Einhorn’s criteria for attractive spinoffs. The company’s market value is only ~10% of the former parent’s value. In addition, margin improvement in the Ingalls segment seems likely.

INVESTMENT RISKS & CONCERNS Ingalls segment has unproven earnings potential.

A combination of the move to serial production and consolidation of operations at Pascagoula may achieve the goal of segment EBIT margin rising to the level of Newport, but execution risks remain.

Military spending is under pressure. The debt ceiling increase legislation calls for $350 billion in defense cuts over ten years but does not specify the cuts. Additional cuts may be triggered if a bipartisan commission fails to agree on deficit reduction plans.

Debt of $1.8 billion and net retirement liabilities of $1.2 billion. The company could face difficulty in the event of severe procurement cuts and a failure to achieve consistent profitability at Ingalls.


FYE December 31 2008 2009 2010 1H11 revenue 7% 2% 7% -2% backlog 65% -9% -15% -3% DoD procurement budget 1 18% 10% 3% n/a Backlog ($mn) 2 22,353 20,365 17,337 16,828 Revenue ($mn) 6,189 6,292 6,723 3,247 % of revenue by type: Products 84% 80% 86% 87% Services 16% 20% 14% 13% % of revenue by segment: Newport News 55% 55% 56% 55% Ingalls (Gulf Coast) 45% 45% 45% 45% Revenue growth by segment: 3

Newport News n/a 3% 7% 0% Ingalls (Gulf Coast) n/a 1% 6% -5% EBIT margin by segment:4 Newport News 9% 9% 9% 8% Ingalls (Gulf Coast) -5% -1% -2% 2% Gross margin by type: Product 10% 13% 13% 11% Service 17% 18% 17% 16% Selected items as % of revenue: EBIT 2% 3% 4% 6% Net income 5 1% 2% 2% 3% D&A 3% 3% 3% 2% Capex 4% 3% 3% 3%

1 Dept. of Defense fiscal year ends 9/30. See White House OMB Data: National Defense Outlays for Major Public Direct Physical Capital Investment 1940-2012: http://1.usa.gov/pkjiuQ (Excel). Est. 2011: 14%, 2012: -12%. 2 Backlog as of 6/30/11 by segment: 67% Newport News; 33% Ingalls. 3 Segment breakdown between Newport News and Ingalls provided since ‘08. 4 We adjust 2008 EBIT margin to exclude $1.3 billion goodwill impairment for Gulf Coast/Ingalls and $1.2 billion goodwill impairment for Newport News. 5 2008 net margin eliminates impact of $2.5 billion goodwill impairment charge.

MAJOR HOLDERS Insiders <1% | State Street 11% | Capital World 8 % | BlackRock 8%| AllianceBernstein 7% | Greenlight 5% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? * Funded backlog consists of firm orders for which funding is contractually obligated by the customer. However, programs remain subject to annual Congressional appropriations. While the company is reimbursed for actual costs on cancelled funded contracts, anticipated profits may be unrealized. ** Lead ship development involves building the first ship of a new design and is prone to cost overruns. As production moves into serial production, or “copies” of the initial design, productivity improves. Management hopes to bring margins at Ingalls closer to levels achieved by Newport. These dynamics are discussed in a presentation on June 15: http://bit.ly/pXaAiS *** CBO Analysis of Navy’s 30-year plan: http://1.usa.gov/k9ECGK We thank Ravi Nagarajan for his research and analysis of the company.

THE BOTTOM LINE Huntington Ingalls is well positioned as a builder and servicer of nuclear aircraft carriers and submarines and a manufacturer of non-nuclear warships. While defense cuts may pressure the long-term backlog, key platforms for the projection of naval power, such as aircraft carriers, are likely to receive funding. Non-discretionary services such as nuclear refueling and decommissioning also provide steady revenue. However, execution risks at the Ingalls segment, coupled with significant long-term debt and pension liabilities, elevate the risk profile, reducing downside protection for equity holders.



HUNTINGTON INGALLS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation Methodology

The Newport News and Ingalls segments are valued separately based on the historical characteristics of the businesses and management forecasts regarding operating margins. We assign multiples of operating income to each segment to arrive at an estimate of enterprise value. Debt and net pension liabilities are deducted to arrive at an estimate of equity value.

Our revenue estimate for the conservative case assumes 95% of 2010 segment revenue, the base case assumes 100% of 2010 segment revenue, and the aggressive case assumes 105% of 2010 segment revenue.

Newport News Segment:

Normalized revenue estimate $3.6 billion $3.8 billion $4.0 billion

Projected normalized segment operating margin 7% 8% 9%

Operating income estimate $251 million $302 million $357 million

Valuation multiple 8x 9x 10x

Estimated value of Newport News Segment $2.0 billion $2.7 billion $3.6 billion

Ingalls (Gulf Coast) Segment:

Normalized revenue estimate $2.9 billion $3.0 billion $3.2 billion

Projected normalized segment operating margin 3% 5% 7%

Operating income estimate $86 million $151 million $222 million

Valuation multiple 7x 8x 9x

Estimated value of Ingalls (Gulf Coast) Segment $0.6 billion $1.2 billion $2.0 billion

Cash on balance sheet, as of 6/30/2011 $381 million $381 million $381 million

Total value of business operations plus cash $3.0 billion $4.3 billion $6.0 billion

Less outstanding long-term debt at 6/30/2011 ($1.8 billion) ($1.8 billion) ($1.8 billion)

Less net pension/retirement/workers comp liability at 6/30/11 ($1.2 billion) ($1.2 billion) ($1.2 billion)

Estimated fair value of the equity of Huntington Ingalls ~ zero $1.3 billion $2.9 billion

$26 per share $60 per share

Shares outstanding 49 million 49 million 49 million

Additional background and comments on valuation approach:

During a presentation on June 15, 2011 at a Deutsche Bank conference, management indicated that the game plan for Huntington Ingalls was to leverage efficiencies and process improvements at Ingalls to achieve operating margins comparable to historic margins at Newport News. Overall revenues are expected to be relatively stable, although we have introduced small variances to reflect risk of budget cuts arising from the debt ceiling legislation and subsequent cuts that may occur in the “trigger” mechanism that will come into force if the 12 member bipartisan Congressional “super committee” cannot agree on a longer term deficit reduction plan. At this time, the composition of defense cuts is not known. However, an examination of the Navy’s current 30 year plan as analyzed by the CBO does not leave much (if any) room for cuts to naval programs that would not result in reductions in fleet size in the long run. Although assessment of the risk of defense cuts is inherently subjective at this point, it appears that the Newport News operations are particularly well positioned due to it’s monopoly position refueling and servicing nuclear aircraft carriers and its position as the only manufacturer currently capable of producing new aircraft carriers, with a new carrier scheduled for production every five year s during the 30 year plan. Additionally, Newport News works in conjunction with General Dynamics Electric Boat division (as a subcontractor) as one of only two suppliers and servicers of nuclear submarines.

Newport News has enjoyed higher margins than Ingalls which ran into difficulty in recent years due to high costs associated with “lead ship” development for non-nuclear ships entering production. Lead ship development involves building the first ship in a new design. Subsequent “copies” of the ship using the same design can benefit from efficiencies and management intends to use serial production methods at Ingalls to improve performance. It is not clear whether the hoped for margin improvements will materialize but recent results show some improvement. We use a range of operating margins of 7-9% for Newport News based on recent margin history. For Ingalls, we use a more conservative 3-7% range that implicitly assumes at least partial success of management initiatives to improve the segment’s performance. Based on 1H 2011 results, management has had initial success improving Ingalls margins.

For valuation multiples, we use estimates recognizing the superior “moat” enjoyed by the Newport News operations which has the only facility able to build and service certain nuclear powered ships (including all of the 11 aircraft carriers currently in the naval fleet as well as their future replacements). A slightly lower multiple is used for Ingalls.

We subtract long term debt and the underfunded pension liability (net) from the total segment valuation to arrive at fair value of the equity. Under the conservative scenario, the equity has marginal (if any) value. This result is brought about by a combination of conservative revenue, margin, and multiple assumptions as well as the heavy debt load carried by the company.

Under the “base case” scenario, equity value approximates the current market capitalization while the aggressive scenario yields a result roughly twice the current market valuation. Assuming bi-partisan agreement on a budget in Washington, the most likely scenario may be between the base and aggressive scenarios leaving moderate upside potential. However, the prospect of partisan gridlock in Washington leading to catastrophic cuts in defense spending combined with the company’s debt level and pension liabilities does not provide much downside protection for equity holders.

Source: Company filings, analysis, assumptions and estimates by Ravi Nagarajan, The Manual of Ideas.



HUNTINGTON INGALLS – BACKLOG BY SEGMENT, 2009-2011

($ in millions) June 30, 2011 March 31, 2011 December 31, 2010 December 31, 2009

Funded Un-

funded Total Funded

Un-funded

Total Funded Un-

funded Total Funded

Un-funded

Total

Ingalls (Gulf Coast)

5,304 309 5,613 5,123 373 5,496 4,317 581 4,898 6,070 38 6,108

Newport News 6,565 4,650 11,215 5,304 6,560 11,864 5,248 7,191 12,439 5,141 9,116 14,257

Total 11,869 4,959 16,828 10,427 6,933 17,360 9,565 7,772 17,337 11,211 9,154 20,365

YTD backlog -3% 0% -15% -9%

Additional background on issues related to backlog:

From information statement: “Backlog is converted into the following years’ sales as costs are incurred or deliveries are made. Approximately 31% of the $17 billion total backlog at December 31, 2010 is expected to be converted into sales in 2011.”

“Funded” backlog is made up of firm orders for which funding is contractually obligated by the customer. Unfunded backlog are firm orders for which funding is not currently contractually obligated by the customer (how “firm” can this be?). My interpretation is that funded backlog involves congressionally approved and committed funds while unfunded backlog includes contracts signed based on naval planning but not appropriated by Congress. This needs to be confirmed.

Risks associated with monetizing backlog: (emphasis added)

Annual appropriation risk: “We are directly dependent upon allocation of defense monies to the U.S. Navy and the U.S. Coast Guard. The funding of U.S. Government programs is subject to congressional budget authorization and appropriation processes. For certain programs, Congress appropriates funds on a fiscal year basis even though a program may be performed over several fiscal years. Consequently, programs may be partially funded initially and additional funds are committed only as Congress makes further appropriations. We cannot predict the extent to which total funding and/or funding for individual programs will be included, increased or reduced as part of the 2011 and subsequent budgets ultimately approved by Congress or will be included in... supplemental appropriations.”

Potential cancellation of committed contracts: “The U.S. Government generally has the ability to terminate contracts, in whole or in part, with little to no prior notice, for convenience or for default based on performance. In the event of termination for the U.S. Government’s convenience, contractors are normally protected by provisions covering reimbursement for costs incurred on the contracts and profit related to those costs but not the anticipated profit that would have been earned had the contract been completed.”

Source: Company filings, analysis by Ravi Nagarajan, The Manual of Ideas. HUNTINGTON INGALLS – SHIPBUILDING SEGMENT DATA, 2001-2010

(in millions) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Sales and service revenues 6,719 6,213 6,145 5,788 5,321 5,786 6,252 5,451 4,712 1,880

Operating expenses 6,394 5,914 5,962 5,250 4,928 5,537 5,857 5,156 4,406 1,861

Goodwill impairment 0 0 2,490 0 0 0 0 0 0 0

Operating income 325 299 (2,307) 538 393 249 395 295 306 19

Operating margin 4.8% 4.8% -37.5% 9.3% 7.4% 4.3% 6.3% 5.4% 6.5% 1.0%

Operating margin w/o impairment losses 4.8% 4.8% 3.0% 9.3% 7.4% 4.3% 6.3% 5.4% 6.5% 1.0% Total segment assets 4,768 4,585 4,427 6,874 6,946 6,756 6,521 6,482 6,532 6,040

Segment goodwill 1,141 1,141 1,141 3,614 3,584 3,616 3,630 3,635 3,635 3,308 Capital expenditures 191 181 218 247 287 266 220 136 76 44

Depreciation and amortization 183 186 193 170 153 155 148 142 147 82 Capex as % of depreciation 104% 97% 113% 145% 188% 172% 149% 96% 52% 54%

Capex as % of revenues 2.8% 2.9% 3.5% 4.3% 5.4% 4.6% 3.5% 2.5% 1.6% 2.3% Backlog at year-end

Funded 9,569 11,294 14,205 10,348 10,854 6,130 9,165 9,749 10,361 9,772

Unfunded 7,772 9,151 8,148 3,230 2,566 5,379 3,841 5,622 not provided in 10-K

Total backlog 17,341 20,445 22,353 13,578 13,420 11,509 13,006 15,371 10,361 9,772

Change in total backlog -15% -9% 65% 1% 17% -12% -15% 48% 6% n/a

Northrop Grumman acquired Litton Industries in 2001, a majority interest in Newport News Shipbuilding in 2001 and the remaining minority interest in Newport News in early 2002. Newport News and the shipbuilding operations of Litton Industries became Northrop Grumman’s shipbuilding segment. Litton also had an advanced electronics business and an information systems business which were incorporated into other Northrop Grumman segments for reporting purposes. The Litton purchase (paid for in stock and cash) was valued at $5.2 billion including net debt of $1.3 billion. The Newport News acquisition, paid for in stock and cash, was valued at $2.6 billion including assumption of $400 million of net debt.

The Ingalls (Pascagoula, MS) and Avondale, LA shipyards were part of Litton Industries. Ingalls Shipbuilding was founded in 1938 by Robert Ingalls. Newport News Shipbuilding which was founded by Collis P. Huntington in 1886. The new company is named after the founders of the company’s two main shipyards in Newport News and Pascagoula. The Avondale shipyard is scheduled for closure in 2013.

Source: Company data, analysis by Ravi Nagarajan, The Manual of Ideas.



Interval Leisure (IILG) – Bares , Gates , Weitz Services: Personal Services, Member of S&P SmallCap 600 Miami, FL, 305-661-1861 www.iilg.com




Market value: $650 million This quarter $0.14 $0.15 2 P/E FYE 12/30/12 15x

Enterprise value: $789 million Next quarter 0.09 0.10 2 P/E FYE 12/30/13 12x



Insider ownership: 1% FYE 12/30/13 0.94 1.08 1 P / tangible book n/m



Institutional ownership: 63% 8/4/11 $0.13 $0.18 LTM pre-tax ROC n/m



per share data) 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 261 289 364 416 405 409 417 102 106

Gross profit 200 222 259 280 278 281 281 70 70

Operating income 73 86 107 76 102 104 96 27 22

Net income 49 58 71 45 38 42 36 11 8

Diluted EPS 0.88 1.04 1.26 0.80 0.67 0.73 0.63 0.20 0.13

Shares out (avg) 56 56 56 56 56 57 57 57 57

Cash from operations 95 106 126 104 87 91 89 27 27

Capex 9 7 10 14 15 16 14 5 3

Free cash flow 86 100 115 90 72 75 75 22 24

Cash & investments 38 67 120 160 181 210 188 210

Total current assets 93 148 207 247 274 308 280 308

Intangible assets 627 703 645 619 609 595 606 595

Total assets 768 923 937 959 983 1,009 986 1,009

Short-term debt 0 0 15 0 0 0 5 0

Total current liabilities 136 160 197 174 179 190 186 190

Long-term debt 0 0 412 395 358 349 372 349

Total liabilities 359 409 808 782 758 760 780 760

Preferred stock 0 0 0 0 0 0 0 0

Common equity 409 513 129 176 225 249 206 249

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BUSINESS OVERVIEW Interval Leisure, spun-off from IAC/InterActiveCorp in 2008, provides services to the vacation industry via two segments:

Membership and exchange (~85% of revenue): provides services to holders of vacation ownership interests* through various membership programs, as well as related services to developers of vacation ownership properties.

Management and rental (~15% of revenue): provides management and rental services for condominium, hotel and timeshare properties and their homeowner associations in the U.S. and Mexico. A majority of managed resorts are in Hawaii. INVESTMENT HIGHLIGHTS

Operates the #2 exchange network for holders of vacation ownership interests.* The Interval Network, founded in 1976, has nearly two million active members and ~2,600 participating resorts in 75+ countries. Wyndham-owned RCI is #1 with nearly four million members (4,000+ resorts; 100 countries).

Fee-based model driven by annual membership dues (~40% of respective segment revenue) and exchange fees (50+%) paid by members when they vacation at a different resort (within the Interval network) from their owned property, or at a different time.

Trailing FCF yield of 10+% implies a “cash-cow” valuation; however, growth is possible due to: 1) decent long-term growth prospects for the global vacation ownership industry despite recent weakness; 2) limited competition in a near-duopoly structure with RCI (~8 million total U.S. members); 3) growth in revenue per member via provision of additional services; and 4) turnaround in managed segment.

Insider buying and $25 million share repurchase announced in August.


Membership declining since 2009. However, Interval has been able to extract more revenue per member, and has maintained margins since the 2008/09 economic downturn led to member declines.

Challenges include credit-restricted developers (less new properties) and weak consumer spending (less interest in renewing memberships or requesting travel exchanges). With ~85% of revenue from U.S.-based customers, another U.S. recession is a key risk.

~$140 million of net debt (1.0x trailing EBITDA). * In the vacation ownership (=timeshare) industry, a purchaser typically acquires either a title to a fraction of a property, or a right to use a property for a specific period of time. Generally, a vacation ownership purchaser’s interest in, or right to use a property, is called a “vacation ownership interest.”


FYE December 31 2006 2007 2008 2009 2010 YTD

6/30/11 members (end)1 4% 6% 2% -8% -2% 0% avg revenue/member2 7% 5% 5% 7% 3% -1%3 revenue 11% 26% 14% -3% 1% 3% EBIT 18% 24% 4%4 -8% 3% -14% Revenue ($mn) 289 364 416 405 409 223 % of revenue by segmen Membership & exchange 100% 87% 83% 85% 84% 83% Management & rental 0% 13% 17% 15% 16% 17% Revenue growth by segment: Membership & exchange 11% 10% 9% 0% 0% -1% Management & rental n/m n/m 50% -14% 9% 26% EBIT margin by segment: Membership & exchange 30% 32% 31% 30% 31% 29% Management & rental n/m 9% 5%4 -3% -2% -1% EBIT margin 30% 29% 27%4 25% 26% 24% % of revenue by geography: U.S. 82% 83% 84% 84% 85% 84% Other 18% 17% 16% 16% 15% 16% Selected items as % of revenue: Gross profit 77% 71% 67% 69% 69% 67% Net income 20% 20% 11% 9% 10% 9% Net cash from ops 37% 34% 25% 22% 22% 26% D&A 11% 10% 8% 9% 9% 9% Capex 2% 3% 3% 4% 4% 3% Members (mn; end)5 1.9 2.0 2.0 1.8 1.8 1.8 Avg revenue/member ($)5 150 157 165 176 181 95 ∆ shares out (avg) n/m n/m 0% 0% 1% 1%

1 Represents active members of the Interval Network as of the end of the period. Active members are in good standing (have paid membership fees and any other applicable charges in full or are within the allowed grace period). 2 Represents membership fee revenue, transaction revenue and ancillary member revenue for the Interval Network for the applicable period divided by the monthly weighted average number of active members during the period. 3 Based on the second quarter of 2011 only. 4 Excludes $34 million goodwill impairment in 2008. 5 Reflects only the company’s primary exchange network, the Interval Network. Overall, as of yearend 2010, the company had two million members enrolled in its various membership programs (including 1.8 million at Interval Network).

Competition from private label clubs operated

by developers. Interval depends on developers for new members as developers buy the initial term of a membership on behalf of vacation interest buyers.

MAJOR HOLDERS Insiders 1% | Liberty Media 29% | Arrow 7% | Gates 5% | Blackrock 5% | Eagle 4% | Alger 4% | Weitz 3% | Bares <1% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Earnings-focused investors may miss Interval’s strong free cash flow as high intangibles amortization affects reported EBIT and net income. Trading at a 10+% trailing FCF yield, the shares appear undervalued based on prospects for decent long-term growth in an expanding, global vacation ownership industry (driving more members to Interval’s exchange network). In addition, Interval’s strong #2 position in a near-duopoly structure with RCI may enable it to continue to extract more revenue per member. While member growth remains a challenge due to credit-restricted developers and weak consumer spending, the business is likely more resilient than the valuation suggests. Recent insider buying and a new repurchase plan are encouraging.



INTERVAL LEISURE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS



yield (based on trailing FCF)

8x average 2006-10 EBITDA minus

capex1

12x average 2006-10 EBITDA minus

capex1


TTM free cash flow (year to June 2011) $75 million

Required FCF yield 15%

Base case and aggressive case valuation:

2006-10 average EBITDA $137 million $137 million

Minus: 2006-10 average total capex -$12 million -$12 million

2006-10 average EBITDA minus capex $125 million $125 million

Fair value multiple 8x 12x

Estimated enterprise value $998 million $1.5 billion

Minus: Net debt (as of 6/30/2011) -$139 million -$139 million

Estimated fair value of the equity of Interval Leisure2 $500 million $860 million $1.4 billion $9 per share $15 per share $24 per share

Implied upside/(downside) to recent stock price ($11.50 per share) -24% 30% 105%


EV to EBITDA ($135 million) 5x 7x 11x

FCF yield ($75 million) 15% 9% 6%


EV per active Interval Network member (1.8 million)2 $353 $552 $827

Average revenue per member in 2010 $181 $181 $181

1 Interval’s model is fee-based and capital-light. We use “EBITDA minus capex” due to the fact that reported EBIT is distorted by intangibles amortization. 2 Based on ~58 million shares outstanding. 3 As of June 30, 2011. Active members are in good standing (have paid membership fees and any other applicable charges in full or are within the allowed grace period). The 1.8 million member figure reflects only members in the company’s primary exchange network, the Interval Network. Overall, as of yearend 2010, the company had two million members enrolled in its various membership programs (including 1.8 million at Interval Network). The valuation metric of EV/member, as presented, therefore ignores the value of the company’s other membership networks (as well as the value of its management and rental business segment). Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. INTERVAL LEISURE – EBITDA, EBIT, NET INCOME, AND FREE CASH FLOW, 2006 – 2010

Source: Company presentation dated June 2011, available at http://bit.ly/rpsIGw



VACATION OWNERSHIP MARKET HIGHLIGHTS

INTERVAL LEISURE – VALUE PROPOSITION

INTERVAL LEISURE – VALUATION: SECTOR COMPARISON

Source: Company presentation dated June 2011, available at http://bit.ly/rpsIGw



INTL FCStone (INTL) – Bares , Leucadia Financial: Investment Services New York, NY, 212-485-3500 www.intlassets.com





Enterprise value: $252 million Next quarter 0.50 0.45 1 P/E FYE 9/29/13 n/a

Shares out: 18.2 million FYE 9/30/11 1.95 1.80 1 EV/ LTM revenue n/m


Insider ownership: 3% FYE 9/29/13 n/a n/a n/a P / tangible book 1.9x



Institutional ownership: 50% 8/9/11 $0.55 $0.35 LTM pre-tax ROC n/m



per share data) 9/30/04 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 9/30/10 3/31/11 3/31/10 3/31/11

Revenue 22 26 477 4,454 18,346 43,604 46,940 60,752 9,055 14,583

Gross profit 4 7 9 (2) 55 26 87 124 25 46

Operating income 2 4 5 (10) 42 13 18 38 10 23

Net income (0) 3 4 (5) 28 28 5 22 7 15

Diluted EPS (0.02) 0.33 0.42 (0.69) 2.85 1.09 0.66 1.33 0.35 0.81

Shares out (avg) 5 7 8 8 8 9 17 17 17 18

Cash from operations 8 (2) (4) (50) (29) (17) 113 177 (42) 156

Capex 0 0 1 1 1 3 5 8 1 3

Free cash flow 8 (2) (5) (51) (30) (20) 108 169 (42) 153




Total assets 68 147 200 361 438 1,556 2,022 2,272 1,725 2,272

Short-term debt 10 13 7 85 120 165 115 32 78 32


Long-term debt 0 0 27 25 17 17 17 10 17 10

Total liabilities 43 119 166 326 363 1,317 1,780 2,001 1,481 2,001


Common equity 25 28 34 36 75 239 241 271 244 271

EBIT/capital employed n/m n/m n/m n/m 91% 17% 30% n/m n/m n/m


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BUSINESS OVERVIEW INTL FCStone, formerly International Assets, is a niche trading and financial services firm operating in five segments:

Commodity and risk management services (66% of assets*): trades commodities for customers and for its own account, as well as provides commodities hedging advice to customers.

Clearing and execution services (22% of assets): provides clearing and execution of exchange-traded futures/options.

Forex (5%): principal in buying and selling spot currencies

Securities (2%): wholesale market maker in foreign securities; originates emerging market debt; trades debt

Other (1%): asset management, commodity financing INVESTMENT HIGHLIGHTS

Trader and provider of financial services in commodity, currency and securities markets, focused on wholesale customers such as banks, brokers, corporations, and institutional investors.

Grew adjusted net asset value per share at a 25+% 5-year CAGR through June 2011. While the model benefits from significant leverage, insider ownership (20+%) and a focus on niche markets with higher spreads (less liquidity, opaque pricing, low automation) have also likely played a role.

Fee-based income streams represent a majority of revenue, which derives from commissions (~40%); OTC/exchange market-making and trading (~40%); physical trading (~10%); and management and consulting fees and interest income (~10%).

Announced one million share buyback in August, signaling management’s confidence in the financial position and potential undervaluation of the company.

Targets 15% ROE (FYTD through June: 13%).

INVESTMENT RISKS & CONCERNS Leveraged model. While the size of the balance

sheet is in large part due to intermediary businesses, the company also has significant gross exposure via principal investments in derivatives/other securities.

Trades at 1.8x tangible book and 15x trailing earnings. While the valuable fee businesses may deserve a premium (and some do not require much equity), the overall valuation does not appear cheap.

Counterparty risk. The company has 10,000+ customers located throughout the world.

Increasing regulation due to Dodd-Frank and other legislation (OTC/clearing businesses are vulnerable).

* Based on assets of $2.8 billion at June 30 (corporate assets are 3% of total).


FYE September 30 2008 2009 2010 YTD

6/30/11 ROE2 17% 16% 5% 13% Leverage ratio3 5.7 6.3 8.0 9.7 revenue 27% 11% 182% 57% net income 9% 191% -72% 297% employees (end) 15% 221% 17% 36% Assets ($bn) 0.4 1.6 2.0 2.8 % of assets by major segment (end):4 Commodity and risk management 47% 45% 59% 66% Clearing and execution services 0% 46% 2 % 22% Foreign exchange 12% 2% 6% 5% Securities 14% 3% 2% 2% Tangible equity to assets (end) 16% 15% 10% 8% Revenue ($mn) 88 98 275 311 Selected items as % of revenue: Employee compensation and benefits 41% 41% 38% 42% Net income 13% 33% 3% 9% Employees (end) 195 625 729 872 shares out (avg) 4% 5% 95%5 2%

1 Figures presented on mark-to-market basis, adjusted for unrealized gains in commodities inventory and unrealized values of forward commodities contracts. Figures reflect the acquisition of FCStone Group on September 30, 2009. 2 2009/2010 ROEs exclude special items related to the FCStone transaction. 3 Total assets to adjusted shareholders’ equity. 4 The asset breakdown for 2008 is estimated. 5 Reflects the issue of 8.2 million shares related to the FCStone acquisition.

Low short term interest rates (here to stay?) limit

clearing and execution segment profitability. SEC investigation of FCStone’s energy trading. Dilution from ongoing staff compensation pressure.


Price ($)

Market Value ($mn)

Price to Tangible

Book

This FY P/E

Next FY P/E

FY End Date

BGCP 6.00 740 2.7x 8x 7x Dec-31

IBKR 14.60 670 1.3x 12x 12x Dec-31

GFIG 4.20 510 3.2x 14x 10x Dec-31

MF 5.10 830 .6x 12x 7x Mar-31

INTL 22.50 410 1.9x 12x 9x Sep-30

MAJOR HOLDERS CEO O’Connor 7% | Other insiders 15% | Bares 14% | Leucadia 8% | Royce 4% | Vanguard 4% | Steinberg 2% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE INTL FCStone, created by the merger of International Assets and FCStone in 2009, is a trader and provider of financial services in commodity, currency and securities markets worldwide. Led by CEO Sean O’Connor (48), who owns 7%, the company appears to have digested the FCStone merger well, and continues to achieve ROEs in the double-digits. While fee-based income streams and a focus on less transparent markets have helped, high financial leverage remains the key driver of ROE. At a valuation of nearly 2x tangible book, and ~15x trailing net income, the risk-reward does not appear attractive.



INTL FCSTONE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 1x tangible book

12x “normalized” net income (based on implied net income

assuming 10% ROE)

15x “normalized” net income (based on implied net income

assuming 15% ROE)


Tangible adjusted shareholders’ equity (6/30/2011)1 $235 million


Estimated equity value $235 million

Base case and aggressive case valuation:

“Normalized” net income2 $29 million $44 million

Fair value multiple 12x 15x

Estimated fair value of the equity of INTL FCStone3 $235 million $349 million $655 million


Implied upside/(downside) to recent stock price ($22.50 per share) -44% -17% 55%

Implied valuation metrics:

Price to adj. tangible book ($235 million) 1.0x 1.5x 2.8x

Trailing P/E 8x 12x 22x

1 Reported shareholders’ equity is adjusted for unrealized gains in commodities inventory and unrealized values of forward commodities contract commitments. 2 Trailing net income is $30 million. Management’s ROE target is 15%. The company’s ROE was 13% for the nine months to June 2011 (annualized). In FY10 (ended September 2010), ROE was 5% excluding a $7 million extraordinary loss related to the acquisition of FCStone on September 30, 2009. Prior to the acquisition of FCStone, the company led by CEO Sean O’Connor has had a record of producing high ROEs, albeit with significant leverage. 3 Based on ~19 million shares outstanding.

Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. INTL FCSTONE – BALANCE SHEET SNAPSHOT, as of June 30, 2011

Source: Company presentation dated August 2011, available at http://bit.ly/mXl730



INTL FCSTONE – FINANCIAL PERFORMANCE, FY2006 – FQ3 2011

Source: Company presentation dated August 2011, available at http://bit.ly/mXl730 INTL FCSTONE – REVENUE ANALYSIS, FY2010

Source: Company presentation dated August 2011, available at http://bit.ly/mXl730



Loews (L) – Eagle , Southeastern Financial: Insurance (Property & Casualty), Member of S&P 500 New York, NY, 212-521-2000 www.loews.com














per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 15,237 15,832 13,844 14,302 13,247 14,117 14,615 14,626 3,486 3,542

Gross profit 7,112 7,290 6,263 6,773 6,057 7,410 8,243 7,970 1,994 1,825

Operating income 1,829 1,827 3,104 3,195 587 1,730 2,902 9,365 803 551

Net income 1,031 961 2,491 2,489 4,530 564 1,289 1,137 366 252

Diluted EPS 1.89 1.67 3.03 2.96 (0.38) 1.31 3.12 2.79 0.87 0.62

Shares out (avg) 557 557 553 535 477 433 419 416 419 409

Cash from operations 3,182 3,367 1,715 5,671 3,371 4,591 (47) 69 506 (213)

Capex 267 478 904 2,247 3,997 2,529 917 744 261 150

Free cash flow 2,915 2,889 811 3,424 (626) 2,062 (964) (675) 245 (363)



Intangible assets 299 297 294 1,353 856 856 856 856 856 856

Total assets 73,720 70,906 76,881 76,115 69,870 74,070 76,277 76,069 75,059 76,069

Short-term debt 1,010 598 4 358 71 10 647 6 247 6


Long-term debt 5,980 4,609 5,568 6,900 8,187 9,475 8,830 9,163 8,809 9,163



Common equity 11,970 13,092 16,502 17,591 13,133 16,899 18,450 18,953 18,205 18,953



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BUSINESS OVERVIEW Loews is a holding company with the following interests:

CNA Financial (NYSE: CNA) is the seventh-largest U.S. property and casualty insurance company. Loews owns 90%.

Diamond Offshore (NYSE: DO) is an offshore drilling contractor with a fleet of fifty rigs. Loews owns 50.4%.

Boardwalk Pipeline (NYSE: BWP) has 14K miles of pipeline and 167 Bcf of storage capacity. Loews owns 64%.

HighMount (wholly owned) is an E&P company in the Texas Permian Basin (1.3 Tcfe proven reserves, 78% developed).

Loews Hotels (wholly owned) operates eighteen four- and five-star luxury hotels (six owned) in the U.S. and Canada.

Corporate includes a $4.3 billion investment portfolio. INVESTMENT HIGHLIGHTS

Loews common stock has delivered 18% annual return over fifty years and book value CAGR of 13% over the past decade. With origins in hotels, Loews has diversified into insurance, offshore drilling, tobacco,* energy, and other subsidiaries.

Loews’ quotation (75% of book value) gives no credit to history of value creation. Subtracting the quoted value of public stakes implies a valuation of only 55% of book value for the rest of the holdco.

$720 million in dividends paid by CNA, BWP and DO to the holdco in 2010. Loews’ portfolio (ex. subsidiaries) was $4.3 billion at June 30, 2011.

Tisch family controls 26% of shares, with trio of CEO James Tisch and co-chairmen Andrew and Jonathan Tisch owning a combined 9% of shares.

Timely repurchases add value. Share count has declined by 26% over five years. 9.9 million shares were retired in 1H11 at prices below book value.

INVESTMENT RISKS & CONCERNS History of underwriting losses at CNA Financial.

While Specialty has performed solidly, other segments have had persistent underwriting losses.

Diamond Offshore operates in capital-intensive, cyclical industry. Advanced rigs capable of drilling in deep waters require significant investment.

HighMount, Boardwalk exposed to low natural gas prices. The value of HighMount’s reserves is impacted by low nat gas prices; similar dynamics impact the rates charged to Boardwalk customers.

Conglomerate discount. However, Loews has taken actions such as the divestment of Lorillard.

* Lorillard was divested in 2008. Loews is indemnified by Lorillard for tobacco liabilities but, from time to time, is named as a defendant in suits. Management believes that Loews has no tobacco liabilities.

We thank Ravi Nagarajan for his research and analysis of the company.


FYE December 31 2007 2008 2009 2010 1H11 Book value / share ($) 32.42 30.18 39.76 44.51 46.81 book value / share 7% -7% 32% 12% 5% shares outstanding 1 -3% -18% -2% -2% -2% Common equity ($bn) 1 17.6 13.1 16.9 18.4 19.0 % of common equity by segment:2

CNA Financial 51% 48% 57% 53% 55% Diamond Offshore 8% 13% 11% 11% 11% HighMount 14% 15% 8% 8% 8% Boardwalk Pipeline 4% 14% 13% 10% 9% Loews Hotels 1% 2% 1% 1% 1% Corporate / Other 21% 9% 10% 17% 16% Revenue ($bn) 14.3 13.2 14.1 14.6 7.2 % of revenue by major segment: CNA Financial 69% 59% 60% 63% 63% Diamond Offshore 18% 26% 26% 23% 24% HighMount 2% 6% 4% 3% 3% Boardwalk Pipeline 5% 6% 6% 8% 8% Loews Hotels 3% 3% 2% 2% 2% CNA Financial selected data ($mn): 2, 3 Premiums earned 7,484 7,151 6,721 6,515 3,210 Net investment income 2,433 1,619 2,320 2,316 1,137 Investment gains/losses -311 -1,297 -857 86 41 CNA specialty comb. ratio 89% 90% 87% 85% 94% CNA comm. comb. ratio 99% 104% 106% 103% 113% Diamond Offshore revenue by region:2

U.S. GOM, Mexico 55% 49% 42% 20% 10% Australia, Asia, Middle East 16% 16% 20% 20% 13% Europe, Africa, Mediterranean 19% 18% 18% 19% 24% South America 10% 17% 20% 41% 53% HighMount selected data: Sales volume (Bcfe) 41.2 95.7 92.9 73.2 31.1 Avg realized price ($ / Mcfe) 6.51 7.94 6.61 6.10 6.38 Avg cost ($ / Mcfe) 3.42 4.01 3.02 3.04 3.43 Boardwalk Pipeline selected data:2

Revenue ($mn) 671 848 910 1,129 574 Net margin 24% 25% 12% 19% 12% Capex (% of revenue) 180% 313% 93% 20% 13% Loews Hotels selected data: Revenue / available room ($) 186 183 135 148 164 Occupancy rate 75% 73% 66% 70% 73%

1 In 2008, Loews disposed of its 38% interest in Lorillard through a distribution of shares in exchange for 93.5 million shares of Loews common stock. 2 Loews provides balance sheets by segment in SEC filings. Loews interest in CNA Financial, Diamond Offshore, and Boardwalk is 90%, 50.4%, and 64% respectively. HighMount and Loews Hotels are wholly owned. 3 CNA has four segments: Specialty, Commercial, Life & Group Non-Core, and Other Insurance. Life/Group & Other are run-off lines posting recurring losses. MAJOR HOLDERS Tisch Family 26% | Davis 13% | Southeastern 8% | NWQ 3% | State Street 3% | Eagle Capital 2% | Dodge & Cox <1% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Loews has a proven record of capital allocation that has driven impressive gains in equity value both since the company’s inception in 1960 and over the past decade. While conglomerates are currently out of favor, Loews management has demonstrated an ability to unlock value through repurchases, opportunistic investments, and periodic divestments. The recent share price gives no credit to management’s superior capital allocation record and implies a compelling risk/reward tradeoff.



LOEWS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation Methodology

Publicly traded subsidiaries at 80% of

market value plus wholly owned

subsidiaries and holding company assets at

tangible book value.

Publicly traded subsidiaries at 100% of

market value plus wholly owned

subsidiaries and holding company assets at

book value.

CNA Financial at 75% of tangible book value; Diamond Offshore and Boardwalk Pipeline at 100% of market value; HighMount and Loews Hotels at book value.

Aggressive case recognizes superior

historical capital allocation at holding

company level by assigning a “capital

allocation premium” to “Corporate and Other”.

See Footnote 3 for details.

Value of publicly traded subsidiaries:

CNA Financial

Shares held as of 6/30/2011 1 242 million 242 million

Price as of 8/19/2011 $21.91 per share $21.91 per share

Market value of Loews shares in CNA $5.3 billion $5.3 billion

Discount factor 2 20% 0%

Valuation of Loews’ shares in CNA Financial $4.2 billion $5.3 billion $7.7 billion

Diamond Offshore

Shares held as of 6/30/2011 1 70 million 70 million 70 million

Price as of 8/19/2011 $58.53 per share $58.53 per share $58.53 per share

Market value of Loews’ shares in DO $4.1 billion $4.1 billion $4.1 billion

Discount factor 2 20% 0% 0%

Valuation of Loews’ shares in Diamond Offshore $3.3 billion $4.1 billion $4.1 billion

Boardwalk Pipeline

Shares held as of 6/30/2011 1 103 million 103 million 103 million

Price as of 8/19/2011 $24.93 per share $24.93 per share $24.93 per share

Market value of Loews’ shares in BWP $2.6 billion $2.6 billion $2.6 billion

Discount factor 2 20% 0% 0%

Valuation of Loews’ shares in Boardwalk Pipeline $2.0 billion $2.6 billion $2.6 billion

Value of all other assets

HighMount $877 million $1.5 billion $1.5 billion

Loews Hotels $185 million $188 million $188 million

Corporate and Other 3 $3.0 billion $3.0 billion $4.2 billion

Valuation of other assets $4.1 billion $4.7 billion $5.8 billion

Estimated fair value of the equity of Loews $14 billion $17 billion $20 billion


Implied upside/(downside) to recent price ($35 per share) -4% 17% 42%

Implied valuation metrics:

Price to book value 0.7x 0.9x 1.1x

Price to tangible book value 0.8x 0.9x 1.1x

1 Shares held in publicly traded subsidiaries CNA Financial, Diamond Offshore, and Boardwalk Pipelines is derived from Loews Corporation’s latest 13F report showing positions held as of June 30, 2011: http://www.sec.gov/Archives/edgar/data/60086/000006008611000026/lcf.txt 2 The discount factor is designed to add an additional margin of safety when considering the intrinsic value of Loews’ ownership interest in CNA Financial, Diamond Offshore, and Boardwalk Pipeline. Although we do not provide a bottom-up analysis of the publicly traded subsidiaries, the conservative case imposes a 20% “haircut” on recent market prices in order to simulate the effect of a moderate decline in the market valuation of these companies. The base case does not impose a reduction to market value and therefore assumes that current market prices approximate intrinsic value. 3 Corporate represents holding company activities and other had tangible book value of $3 billion at 6/30/2011 and the conservative and base cases value the holding company at tangible book value. However, such a valuation does not recognize the superior capital allocation skill demonstrated by management over many decades. For example, over the past decade, annualized growth in book value per share (with dividends added back) was 12.7%. For the aggressive case only, we add a “capital allocation premium” to recognize management’s track record. The premium is derived by assuming that management compounds holding company investments ($4.3 billion at 6/30/2011) at a rate of 12.7% over the next decade which results in future value of $14.2 billion. This figure is discounted to present value terms of $5.5 billion using a discount rate of 10%. The difference between the carrying value of investments of $4.3 billion on the balance sheet as of 6/30/11 and our estimate of the present value of the investment portfolio is $1.2 billion representing the capital allocation premium.

Source: Company filings, analysis by Ravi Nagarajan, The Manual of Ideas analysis, assumptions and estimates.



LOEWS – BOOK VALUE AND DIVIDEND HISTORY *

(figures in millions, except per share values) Years Ended December 31,

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Total shareholders’ equity 18,450 16,899 13,133 17,599 16,511 13,113 11,970 10,855 10,996 9,171 Book value per share of Loews (end) 44.51 39.76 30.18 32.42 30.17 23.68 21.85 19.95 20.13 15.96 Change in book value per share 12% 32% -7% 7% 27% 8% 10% -1% 26%

Stock price of Loews (end) 38.91 36.35 28.25 50.34 41.47 31.59 23.41 16.47 14.81 18.44 Change in market value per share 7.0% 28.7% -43.9% 21.4% 31.3% 34.9% 42.1% 11.2% -19.7%

Price to book ratio (end) 0.9x 0.9x 0.9x 1.5x 1.4x 1.3x 1.1x 0.8x 0.7x 1.2x S&P 500 return with dividends included 15.1% 26.5% -37.0% 5.5% 15.8% 4.9% 10.9% 28.7% -22.1%

Book value change vs. S&P 500 return -3.2% 5.2% 30.1% 2.0% 11.6% 3.5% -1.4% -29.6% 48.2% Cash dividends per share:

Loews common stock 0.25 0.25 0.25 0.25 0.24 0.20 0.20 0.20 0.20 0.19 Former Carolina Group common stock - - 0.91 1.82 1.82 1.82 1.82 1.81 1.34 - Shares outstanding (end): Loews common stock 415 425 435 530 544 558 557 556 556 574 Former Carolina Group common stock - - - 108 108 78 68 58 40 - Change in shares outstanding -2% -2% -18% -3% -2.4% 0.1% 0.1% 0.0% -3.2%

* Annualized book value per share growth of 12.1% exceeded annualized growth in market value of Loews common stock by 3.4% due to a reduction in the price/book ratio from a modest premium of 1.16 in 2001 to a modest discount of 0.87 in 2010. The figures with dividends added back (but not reinvested) are slightly higher. During the ten year period, Loews traded at significant premiums in 2005, 2006, and 2007. Growth in book value per share reflects the advance in shareholders equity along with the effect of share repurchases and is a good proxy for the value added by management over this timeframe. Book value growth far exceeds the growth in the market value of the S&P 500 over this timeframe. The strong relative outperformance of growth in book value per share may indicate that Loews deserves to trade at premium to book value.

Source: Company data, analysis by Ravi Nagarajan, The Manual of Ideas. LOEWS – BALANCE SHEET BY SEGMENT, as of June 30, 2011

($ in millions) CNA Financial

Diamond Offshore

Boardwalk Pipeline

HighMount Loews Hotels

Corporate / Other

Eliminations Total

Investments 43,377 945 50 113 60 4,339 - 48,884 Cash 84 36 5 11 10 2 - 148 Receivables 9,252 629 83 81 43 148 (103) 10,133 PP&E 258 4,166 6,263 1,386 339 44 - 12,456 Deferred taxes 406 - - 536 - - (942) - Goodwill 86 20 163 584 3 - - 856 Subsidiaries - - - - - 16,006 (16,006) - Other assets 707 944 325 21 29 10 - 2,036 Deferred M&A costs 1,106 - - - - - - 1,106 Separate accounts 450 - - - - - - 450 Total assets 55,726 6,740 6,889 2,732 484 20,549 (17,051) 76,069

Insurance reserves 37,792 - - - - - - 37,792 Payable to brokers 362 - - 107 - 89 - 558 Short term debt - - - - 6 - - 6 Long term debt 2,648 1,488 3,122 1,100 213 692 (100) 9,163 Deferred taxes - 518 458 - 55 549 (942) 638 Other liabilities 2,773 570 348 64 22 205 (3) 3,979 Separate accounts 450 - - - - - - 450 Total Liabilities 44,025 2,576 3,928 1,271 296 1,535 (1,045) 52,586 Equity 10,416 2,112 1,768 1,461 188 19,014 (16,006) 18,953 Minority interests 1,285 2,052 1,193 - - - - 4,530

* Loews provides consolidating balance sheets by segment. CNA Financial, Diamond Offshore, and Boardwalk Pipeline are public companies in which Loews holds majority ownership positions. As a result, these companies are consolidated into Loews financial statements and minority interests are deducted. HighMount and Loews Hotels are wholly owned subsidiaries. The Corporate/Other segment is primarily comprised of investments not associated with the other subsidiaries. The segment balance sheets provide better insight into Loews compared to the consolidated balance sheet. In this spreadsheet, the segment balance sheets are presented. Book value and tangible book value/share are calculated to provide insight into the percentage of book value attributed to each segment. Finally, market values of the publically traded subsidiaries are used to calculate the market value of Loews holdings in the publicly traded subsidiaries. The implied value of the rest of Loews (HighMount, Hotels, and Corporate) is derived by subtracting the market value of Loews holdings in the publically traded subsidiaries from Loews’ current market cap. This is referred to as the “Stub” - the value implicitly assigned by the market to Loews Corporate, HighMount, and Hotels.

Source: Company data, analysis by Ravi Nagarajan, The Manual of Ideas.



MakeMyTrip (MMYT) – Tiger Global Services: Personal Services GURGAON, India, 91-112-443-500 www.makemytrip.com



52-week range: $16.06 - $42.88 Latest Ago Ests P/E FYE 3/30/12 n/a

Market value: $685 million This quarter n/a n/a n/a P/E FYE 3/30/13 n/a

Enterprise value: $587 million Next quarter n/a n/a n/a P/E FYE 3/30/14 n/a

Shares out: 36.6 million FYE 3/30/12 n/a n/a n/a EV/ LTM revenue 4.1x

Ownership Data FYE 3/30/13 n/a n/a n/a EV/ LTM EBIT 128x

Insider ownership: <1% FYE 3/30/14 n/a n/a n/a P / tangible book 6.5x



Institutional ownership: n/a n/a n/a n/a LTM pre-tax ROC >100%



per share data) 3/31/08 3/31/09 3/31/10 3/31/11 6/30/11 6/30/10 6/30/11

Revenue 38 69 84 125 143 34 52

Gross profit 17 25 40 61 68 14 21

Operating income (16) (11) (6) 4 5 1 2

Net income (19) (7) (6) 5 3 1 1

Diluted EPS (1.08) (0.42) (0.35) 0.15 0.11 0.04 0.02

Shares out (avg) 17 17 18 28 30 18 36

Cash from operations (16) (3) 5 (6) (6) 3 3

Capex 5 1 1 3 0 0 0

Free cash flow (22) (4) 4 (9) (6) 3 3

Cash & investments 14 23 68 102 0 102

Total current assets 24 43 102 143 0 143

Intangible assets 2 2 3 7 0 7

Total assets 38 51 113 160 0 160

Short-term debt 48 45 4 4 0 4

Total current liabilities 62 73 35 45 0 45

Long-term debt 0 0 0 0 0 0

Total liabilities 65 76 37 48 0 48

Preferred stock 0 0 0 0 0 0

Common equity (27) (25) 76 113 0 113

EBIT/capital employed n/m n/m >100% >100% n/m n/m


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BUSINESS OVERVIEW MakeMyTrip provides online travel services in India. It issued 4.2 million shares at $14/share in an IPO in August 2010 and ~1.5 million shares at $24/share in May 2011. INVESTMENT HIGHLIGHTS

Largest online travel agency in India, based on gross bookings of $742 million in FY11. ~95% of total annual transactions of 3+ million derive from the company’s flagship website MakeMyTrip.com.

Achieved profitability in FY11; grew bookings by 50+% y-y in the June quarter. Operating leverage from continued strong bookings growth (FY08-11 CAGR: ~50%) should lead to higher EBIT margins.

Demand drivers: rising incomes and Internet penetration in India (only 9% in 2010). Online travel gross bookings grew ~30% y-y to $4.4 billion in ‘10 (~25% of total travel gross bookings in India).

Benefits from “virtuous cycle” of growing scale enabling greater value for suppliers, travelers and advertisers. MMYT is using strength in air ticketing to grow in hotel (since ‘05), bus (‘08), rail verticals (‘09).

Chairman and CEO Deep Kalra (41) founded MakeMyTrip in 2000 and owns 10% of shares.

~$130 million of pro-forma net cash at March 31, incl. ~$35 million of proceeds from May offering.


Valuation may rely on too optimistic profit growth assumptions. Assuming a 12x multiple on FY16 estimated EBIT of $125 million (30% margin on $425 million of net revenue, up 600% on FY11), and a 15% discount rate, yields a PV of ~$20/share.

Online competition includes other travel agencies (global rivals such as Expedia and local rivals such as Yatra and Cleartrip), and new entrants such as “metasearch” companies Ixigo and Zoomtra.

Supplier margins, which have been stable on a blended basis, may erode due to competition and as airlines and other suppliers grow their own websites.



PCLN 22,340 20,970 5.8x 18.1x 20x 15x

EXPE 7,280 6,630 1.8x n/m 14x 12x

CTRP 5,530 4,920 9.8x 6.6x 34x 27x

LONG 650 380 4.3x 2.2x 49x 36x

OWW 220 550 .7x n/m 54x 17x

MMYT 680 580 4.1x 6.5x n/a n/a

SELECTED OPERATING DATA1 FYE March 31 2009 2010 2011 1Q12 transactions 25% 41% 60% 54% gross bookings2 39% 49% 59% 51% net revenue3 51% 61% 52% 52% Transactions (mn)4 1.33 1.88 3.00 0.98 % of transactions by type: Air 94% 94% 94% 93% Hotels and packages 6% 6% 6% 7% Gross bookings ($mn) 313 466 742 26 % of gross bookings by type: Air 83% 88% 87% 83% Hotels and packages 17% 12% 13% 17% Gross bookings growth by type: Air 31% 57% 59% 49% Hotels and packages 98% 9% 65% 61% Net revenue margin by type:5 Air 7.2% 7.6% 7.4% 6.6% Hotels and packages 10.6% 14.0% 11.5% 13.1% Net revenue ($mn) 25 40 61 21 % of net revenue by type: Air 75% 77% 78% 68% Hotels and packages 22% 20% 18% 28% Other6 3% 3% 4% 4% Net revenue growth by type: Air 33% 66% 53% 44% Hotels and packages 135% 44% 36% 76% Selected items as % of net revenue: EBIT -42% -15% 7% 8% Net income -29% -15% 8% 4% Net cash from ops -13% 13% -10% 13% D&A 6% 4% 3% 3% Capex 4% 3% 5% 4% % of revenue from India 94% 95% 93% n/a

1 Based on IFRS as issued by the IASB (adopted starting in April 2007). 2 Represents the total amount paid by customers for travel services booked via MakeMyTrip, incl. taxes, fees and other charges, net of cancellations/refunds. 3 Stated after service costs (mainly costs paid to hotel suppliers for the acquisition of hotel rooms; air ticket revenue, on the other hand, is already recognized on a “net” basis in reported revenue). MakeMyTrip generally acts as an agent only, although on occasion, it assumes inventory risk. 4 Includes air and hotel/packages transactions only. 5 Defined as revenue less service cost as a percentage of gross bookings. 6 Includes commissions on rail/bus reservations.

MAJOR HOLDERS* CEO Kalra 10% | Other insiders 2%** | SAIF 33% | Tiger Global 17% | Helion 8% | Sierra 6% | TCW 4% | Criterion 2% * Based on ~37 million shares outstanding following the May 2011 equity offering. ** Excludes directors Adusumalli, Aggarwal and Guleri, who are affiliated with SAIF, Helion Venture, and Sierra Ventures, respectively.


THE BOTTOM LINE Since launching its Indian website in 2005, MakeMyTrip has become the largest online agent for Indian domestic and outbound travel – a $4-5 billion market based on 2010 gross bookings. In addition to the large and growing addressable market, the company benefits from brand awareness, a scalable platform, incentivized management and a strong balance sheet. As the recent valuation relies on profits many years into the future, however, competition and the potential for supplier margin erosion represent key risks. Despite the many positives, we therefore struggle to get comfortable with the (lack of) margin of safety.



MAKEMYTRIP – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS



Based on the company’s high growth, we use a simplified DCF model in each of the three valuation cases to estimate intrinsic value five years from now (see

assumptions below); the only difference among the three valuation cases is the assumed discount rate used to arrive at a present value estimate for the equity.

Gross bookings in FY11 (year ended March 2011)1 $742 million $742 million $742 million

Assumed 5-year gross bookings CAGR2 50% 50% 50%

Estimated gross bookings in FY16 $5.65 billion $5.65 billion $5.65 billion

Assumed blended net revenue margin in FY163 7.5% 7.5% 7.5%

Estimated net revenue in FY16 $424 million $424 million $424 million

Assumed EBIT margin in FY164 30% 30% 30%

Estimated EBIT in FY16 $127 million $127 million $127 million


Estimated enterprise value $1.53 billion $1.53 billion $1.53 billion

Plus: Estimated net cash in March 20166 $132 million $132 million $132 million

Estimated fair value of the equity in mid-2016 $1.66 billion $1.66 billion $1.66 billion

Assumed discount rate for present value calculation 20% 15% 10%

Estimated fair value of the equity of MakeMyTrip7 $670 million $825 million $1.03 billion


Implied upside/(downside) to recent price ($20 per share) -13% 8% 35%


EV to gross bookings (~$830 million) 0.6x 0.8x 1.1x

EV to net revenue ($68 million) 8x 10x 13x

Price to tangible book value 5x 6x 7x

1 Gross bookings represent the amount paid by customers for travel services and products booked through MakeMyTrip, including taxes, fees, and other charges, and are net of cancellation and refunds. Gross bookings do not include other revenue generated from advertisements, commissions and fees earned from the sale of railway and bus operators, and fees earned by facilitating travel insurance policies to customers (such other revenue totaled ~$2.5 million in FY11).

2 The company’s gross bookings grew at a ~50% CAGR from FY08-11, including ~60% y-y growth in FY11. According to PhoCusWright, India’s travel industry gross bookings totaled ~$18 billion in 2010 (up 12% y-y), of which ~$4.5 billion is represented by online gross bookings (~25% penetration). Online industry gross bookings grew ~30% y-y in 2010. India’s growing middle class and increasing Internet penetration (only ~9% in 2010) are expected to contribute to further growth in online travel bookings. The company’s bookings growth above the online travel industry average growth may be due to several factors, including faster growth of online travel agencies (versus online travel supplier sites) and market share increases versus other online travel agencies (including Yatra, Cleartrip, and others).

3 Net revenue margin is defined as net revenue as a percentage of gross bookings. Net revenue is defined as revenue less service costs (costs of procuring the relevant services for sale to customers, including procurement costs paid to hotel and package suppliers for the acquisition of hotel rooms, sightseeing costs, local transport costs and on occasion the cost of air tickets when the company pre-purchases air ticket inventory in order to enjoy special negotiated rates and revenues). Net revenue margin averaged ~8% in FY08-11, including 7.9% in FY11. The company’s air business, which represented 87% of total gross bookings in FY11, had a net revenue margin of 7.4% in FY11 (7.3% average for FY08-11). The hotels/packages business, which represented 17% of total gross bookings in FY11, had a net revenue margin of 11.5% in FY11 (11.3% average for FY08-11).

4 EBIT margin on net revenue was ~8% in FY11. Our 30% margin estimate for FY16 attempts to reflect operating leverage benefits from higher revenue (assumes operating costs, excluding service costs, grow ~40% y-y on average during the forecast period).

5 The multiple of 12x applied to FY16 estimated EBIT attempts to reflect the value of estimated run-rate profitability (steady-state) plus some modest continued growth potential of the business after the initial 5-year forecast period. As such, the multiple is highly speculative and may significantly under/over-estimate the company’s prospects for profitable growth.

6 Assumed equivalent to pro-forma net cash of $132 million as of March 31, 2011 (pro-forma for the follow-on equity offering in May 2011). Free cash flow that should be generated through FY16 is assumed to be utilized for share repurchases to offset any future stock-option issuance).

7 Based on ~38 million diluted shares outstanding.




SELECTED STATISTICS ON THE INDIAN TRAVEL INDUSTRY Outbound Travel Growth and Destinations:

Online Travel Segment versus Overall Indian Travel Market:

Source: Company presentation dated June 2011, available at http://bit.ly/nBUGap



Microsoft (MSFT) –Baupost , Edinburgh , Greenlight , IVA , Markel … Technology: Software & Programming, Member of S&P 500 REDMOND, WA, 425-882-8080 www.microsoft.com






Shares out: 8,378.3 million FYE 6/30/12 2.87 2.76 32 EV/ LTM revenue 2.3x


Insider ownership: 7% FYE 6/30/14 3.50 2.60 8 P / tangible book 4.6x



Institutional ownership: 65% 7/21/11 $0.69 $0.58 LTM pre-tax ROC >100%



per share data) 6/30/05 6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11 6/30/11 6/30/10 6/30/11

Revenue 39,788 44,282 51,122 60,420 58,437 62,484 69,943 69,943 16,039 17,367

Gross profit 33,757 36,632 40,429 48,822 46,282 50,089 54,366 54,366 12,869 13,659

Operating income 14,409 16,064 18,438 22,271 21,225 24,167 27,161 27,161 5,930 6,171

Net income 12,254 12,599 14,065 17,681 14,569 18,760 23,150 23,150 4,518 5,874

Diluted EPS 1.12 1.20 1.42 1.87 1.62 2.10 2.69 2.70 0.51 0.69

Shares out (avg) 10,839 10,438 9,742 9,328 8,945 8,813 8,490 8,490 8,712 8,429

Cash from operations 16,605 14,404 17,796 21,612 19,037 24,073 26,994 26,994 5,604 5,942

Capex 812 1,578 2,264 3,182 3,119 1,977 2,355 2,355 758 642

Free cash flow 15,793 12,826 15,532 18,430 15,918 22,096 24,639 24,639 4,846 5,300

Cash & investments 37,751 34,161 23,411 23,662 31,447 36,788 52,772 52,772 36,788 52,772



Total assets 70,815 69,597 63,171 72,793 77,888 86,113 108,704 108,704 86,113 108,704

Short-term debt 0 0 0 0 2,000 1,000 0 0 1,000 0


Long-term debt 0 0 0 0 3,746 4,939 11,921 11,921 4,939 11,921



Common equity 48,115 40,104 31,097 36,286 39,558 46,175 57,083 57,083 46,175 57,083

EBIT/capital employed n/m n/m n/m n/m n/m >100% >100% >100% n/m n/m


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BUSINESS OVERVIEW Microsoft, founded in 1975, is the world’s largest software company. It operates in five segments: Business (>90% of revenue from Office software), Windows and Windows Live (Windows operating systems), Server and Tools (Windows, SQL, Azure), Entertainment and Devices (~70% of revenue from Xbox products), and Online Services (Bing, MSN). INVESTMENT HIGHLIGHTS

Retains a growing software business with resilient margins despite competitive threats. Microsoft has parlayed dominance in PC operating systems into leadership in enterprise software (e.g. Office, SQL).

Recent valuation of ~7x trailing P/E (adjusted for net cash) represents a buying opportunity. The market appears too pessimistic regarding Microsoft’s “moat” and future earnings prospects.

Negative impact of rival operating systems and application software may be overblown. Strong demand for Windows 7 (400+ million licenses sold since ‘09 launch), Office 2010 (fastest-selling Office version in history) and server software contributed to 12% y-y revenue growth in the year to June.

~$32 billion of pro-forma net cash at June 30, including short-term investments, but excluding $8.5 billion to be paid for the Skype purchase.

Continues to add value via share repurchases at prices that may be materially below intrinsic value.

Grew non-U.S. revenue (~45% of total) 21% y-y in FY11 (FY06-11 CAGR: ~17% vs. ~5% for U.S.).


Technology change. The stickiness of Microsoft’s products is uncertain due to desktop challenges (from tablets/mobile), threats to the license-based software model (from “open source”/cloud), and the success of integrated hardware/software models (e.g. Apple). However, this is mitigated by a low valuation and Microsoft’s own initiatives (e.g. Office 365, Windows Azure, Nokia partnership).

Use of cash. The recent announcement to acquire Skype for $8.5 billion has likely destroyed shareholder value. CEO Ballmer (55) may pursue additional value-destructive M&A in the future.

Potential slowdown in enterprise software spending if the global economy weakens; may impact the adoption of Office 365, Windows 8.

MAJOR HOLDERS Chairman Gates 7% | CEO Ballmer 4% | Other insiders <1% Cap Re 4% | Vanguard 3% | State Street 3% | Baupost <1%

SELECTED OPERATING DATA FYE June 30 2006 2007 2008 2009 2010 2011 revenue 11% 15% 18% -3% 7% 12% deferred revenue1 19% 16% 21% -7% 4% 15% EBIT 12% 13% 21% -9% 18% 13% employees (end) 16% 11% 15% 2% -4% 1% Revenue ($bn) 44.3 51.1 60.4 58.4 62.5 69.9 % of revenue by segment:2 Business 33% 32% 31% 32% 30% 31% Windows & Windows Live 29% 29% 27% 25% 28% 27% Server & Tools 22% 22% 22% 24% 24% 24% Entertainment & Devices 11% 12% 14% 13% 13% 12% Online Services 5% 5% 5% 5% 4% 1% Revenue growth by segment:2 Business 9% 14% 15% 0% 0% 16% Windows & Windows Live 10% 13% 11% -12% 23% 6% Server & Tools 16% 15% 18% 8% 5% 15% Entertainment & Devices 38% 28% 34% -6% 5% 7% Online Services -2% 6% 31% -3% -29% 15% EBIT margin by segment:2 Business 67% 65% 64% 63% 62% 63% Windows & Windows Live 79% 76% 76% 72% 68% 64% Server & Tools 33% 32% 32% 36% 34% 38% Entertainment & Devices -27% -32% 4% 0% 7% 13% Online Services 5% -25% -41% -77% -111% -104% Corporate -13% -9% -9% -8% -4% -5% Total EBIT margin 37% 36% 37% 35% 39% 39% % of revenue by customer location: U.S. 67% 61% 59% 57% 58% 54% International 33% 39% 41% 43% 42% 46% Selected items as % of revenue: Gross profit 83% 79% 81% 79% 80% 78% R&D 15% 14% 14% 15% 14% 13% Net income 28% 28% 29% 25% 30% 33% D&A 2% 3% 3% 4% 4% 4% Capex 4% 4% 5% 5% 3% 3% shares out (avg) -4% -7% -4% -4% -1% -4%

1 Represents y-y change in period-end deferred (unearned) revenue. Deferred revenue was $17 billion as of June 30, 2011 (~25% of FY11 revenue). 2 FY10 segment information reflects move of Windows Live, Mobile Services, and Razorfish from Online to Windows (prior Client segment), Entertainment, and to Corporate segments, respectively. Prior periods have not been revised.



AAPL 330,070 301,680 3.0x 4.9x 13x 11x

IBM 188,150 206,160 2.0x n/m 12x 11x

GOOG 158,510 123,590 3.7x 3.6x 14x 12x

ORCL 125,520 112,590 3.2x 12.1x 10x 9x

MSFT 201,500 160,650 2.3x 4.6x 8x 8x


THE BOTTOM LINE Following the recent share price decline, Microsoft’s trailing P/E is ~7x, when adjusted for net cash (reduced by $8.5 billion to account for the Skype bid). This appears too pessimistic despite concerns about competition, capital allocation, and potentially slower demand. In fact, the market’s valuation suggests Microsoft is a stagnant business, or worse. This is belied by continuing strong revenue growth, resilient margins, and record trailing FCF of ~$25 billion (12% yield).



MICROSOFT – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation Methodology Sum-of-the-parts valuation (see detailed assumptions below)

Value of excess cash:1 Cash, cash equivalents, and short-term investments $53 billion $53 billion $53 billion Less: Debt -12 billion -12 billion -12 billion Less: Estimated cash to be paid for Skype acquisition2 -9 billion -9 billion -9 billion Less: Estimated cash needed to run business -2 billion -2 billion -2 billion

Estimated value of excess cash $30 billion $30 billion $30 billion Value of Business segment (Office productivity software): 3-year average EBIT (2009-11) $12.5 billion $12.5 billion $12.5 billion Fair value multiple3 8x 10x 12x

Estimated enterprise value of Business $100 billion $125 billion $150 billion implied EV-to-trailing EBIT 7x 9x 11x

Value of Windows segment (Windows operating systems): 3-year average EBIT (2009-11) $11.5 billion $11.5 billion $11.5 billion Fair value multiple4 8x 10x 12x

Estimated enterprise value of Windows $92 billion $115 billion $138 billion implied EV-to-trailing EBIT 8x 10x 12x

Value of Server & Tools segment (Windows, SQL, Azure servers): 3-year average EBIT (2009-11) $5.5 billion $5.5 billion $5.5 billion Fair value multiple5 8x 10x 12x

Estimated enterprise value of Server & Tools $44 billion $55 billion $66 billion implied EV-to-trailing EBIT 7x 8x 10x

Value of Entertainment & Devices segment (Xbox consoles): Trailing EBIT (year to June 2011) $1.1 billion $1.1 billion $1.1 billion Fair value multiple6 8x 10x 12x

Estimated enterprise value of Entertainment & Devices $9 billion $11 billion $13 billion implied EV-to-3-year average revenue (2009-11) 1.1x 1.3x 1.6x

Value of Online Services segment (Bing search engine): Trailing revenue (year to June 2011) $2.5 billion $2.5 billion $2.5 billion Fair value multiple7 2x 3x 4x

Estimated enterprise value of Online Services $5 billion $8 billion $10 billion Value drag of corporate overhead: Estimated corporate costs -$5.0 billion -5.0 billion -$5.0 billion Fair value multiple 8x 10x 12x

Estimated value drag of corporate overhead -$40 billion -$50 billion -$60 billion

Estimated fair value of the equity of Microsoft8 $240 billion $294 billion $348 billion


Implied valuation metrics based on trailing financials: EV to revenue (~$70 billion) 3.0x 3.7x 4.5x EV to EBIT (~$27 billion) 8x 10x 12x FCF yield (FCF: ~$25 billion) 10% 8% 7% Implied valuation metrics based on estimated forward financials: Price to analysts’ average EPS estimate for FY12 ($2.87) 10x 12x 14x estimated implied forward P/E excl. excess cash 9x 11x 13x Other implied valuation metrics: Implied FCF yield based on average FY09-11 FCF (~$23 billion) 10% 8% 7% Implied dividend yield9 2% 2% 2%

1 Based on balance sheet values as of June 30, 2011. We do not assign any value to the $11 billion of “equity and other investments” as these are assumed to be accounted for in the operating results of the various segments. 2 In May 2011, Microsoft announced a deal to acquire Skype for $8.5 billion in cash. Microsoft obtained regulatory approval in the U.S. and expects to obtain all remaining required regulatory approvals “during calendar year 2011.” While we deduct the cash to account for this acquisition, we do not include any contribution from Skype into our operating assumptions (one may argue, however, that the potential contributions of Skype are reflected in our applied valuation multiples). 3 Multiples reflect strong market position of Office software and high-single digit average revenue growth during FY05-11 (recent growth driven by continued Office 2010 launch cycle; Office 365 launched). 4 Multiples reflect strong market position of Windows operating systems (mainly in desktops) and high-single digit average revenue growth during FY05-11 (recent growth driven by sales of Windows 7 with 400+ million licenses sold to date; Windows 8 upcoming). 5 Multiples reflect strong market position of Windows and SQL servers and low double-digit average revenue growth during FY05-11 (recent growth driven by Windows Server, System Center, and SQL Server). 6 Multiples reflect strong Xbox market position (recent #1 console share in the U.S.) and ~15% average revenue growth during FY05-11 (recent growth reflects increased volumes of Xbox 360 and Kinect consoles sold). 7 Multiples reflect the large online market opportunity and prospects for improved profitability for Microsoft’s online offerings. 8 Based on 8.4 billion shares outstanding. 9 Based on annualizing the latest quarterly dividend of $0.16 per share.




MICROSOFT – FY2011 RECAP

Source: Company presentation dated July 21, 2011, available at http://bit.ly/mQt4c7 MICROSOFT – FY2012 OUTLOOK

Source: Company presentation dated July 21, 2011, available at http://bit.ly/mQt4c7



Owens Illinois (OI) – Atlantic Investment Basic Materials: Containers & Packaging, Member of S&P 500 Perrysburg, OH, 567-336-5000 www.o-i.com














per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 6,263 6,370 6,650 7,567 7,540 6,652 6,633 7,095 1,670 1,959

Gross profit 1,345 1,285 1,169 1,595 1,546 1,335 1,338 1,356 383 355

Operating income 210 (207) 165 507 435 215 424 554 194 110

Net income 214 (580) (49) 1,305 250 161 (47) (128) 141 73

Diluted EPS 1.00 (4.27) (0.17) 1.78 0.98 0.64 1.57 1.08 0.79 0.43

Shares out (avg) 148 151 152 154 163 168 164 164 164 164


Capex 462 404 320 316 340 407 500 417 140 80

Free cash flow 148 49 (170) 349 417 393 92 95 10 99




Total assets 10,737 9,522 9,321 9,325 7,977 8,727 9,754 10,144 8,358 10,144

Short-term debt 193 278 737 701 394 350 354 371 272 371


Long-term debt 5,168 5,019 4,719 3,014 2,940 3,258 3,924 3,969 3,228 3,969


Preferred stock 453 453 453 453 0 0 0 0 0 0

Common equity 1,092 271 (96) 1,735 1,041 1,538 1,815 2,133 1,538 2,133

EBIT/capital employed 5% -6% 5% 15% 13% 7% 13% 16% n/m n/m


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BUSINESS OVERVIEW Owens-Illinois (O-I) manufactures glass packaging products at 80+ plants in 21 countries. O-I has ~24,000 employees. INVESTMENT HIGHLIGHTS

World’s largest glass container manufacturer focused on containers for the food/beverage sector. O-I is the #1 manufacturer in most of the countries it operates in, and the sole producer in seven countries.

Competitive advantages from scale, low-cost production, and manufacturing know-how. O-I’s roots are tied to the invention of the automatic bottle-making machine by Michael Owens in 1903. The company licenses its proprietary technology to third parties (related revenue of $16 million in ‘10).

Leveraged equity has upside if EBIT stabilizes or grows. The recent debt refinancing has extended maturities to 2015+. Trailing adjusted EBIT of ~$860 million implies an EV multiple of <10x. Maintenance capex may be materially below D&A.

“Higher future selling prices to help offset current cost inflation.” O-I sells most products directly to customers under annual or multi-year contracts; it has historically passed on cost rises with a time lag.

Global and relatively defensive end-markets, Developing countries, where demand is growing, represent ~30% of revenue and ~40% of total assets.

Advantages of glass as a packaging medium: 100% recyclable; preserves a product’s purity and taste/flavor; premium image for product branding.


A ~20% decline in trailing EBITDA would lead to a debt covenant breach related to maximum net debt to “credit agreement” EBITDA of 4.0x. Net debt is $4.1 billion at June 30 (3.2x TTM adj. EBITDA).

Reduced 2011 FCF target to $200-250 million in July, from $300 million, due to restructuring in Australia, inventory rebuild in North America, and additional capacity investments in South America.

Input cost pressure from raw materials (sand, soda ash, limestone and recycled glass), labor and energy to lead to cost inflation of $200-220 million in 2011.

Possible substitution by alternative forms of packaging, including aluminum cans and plastic containers. A weaker economy may exacerbate this.

Mature markets in Europe and North America represent ~70% of revenue.

Post-retirement and asbestos-related liabilities, carried at $0.8 billion and $0.4 billion at June 30.


FYE December 31 2006 2007 2008 2009 2010 YTD

6/30/11 revenue 6% 14% 3% -12% 0% 14%2 EBIT 281% 72% -11% -36% 54% -9%3 employees (end) -1% -14% -4% -4% 9% 9%4 Revenue ($bn) 6.4 7.3 7.5 6.7 6.6 3.7 % of revenue by segment:5 Europe 44% 45% 47% 44% 42% 44% North America 33% 31% 30% 31% 28% 27% South America 10% 11% 11% 10% 15% 16% Asia Pacific 13% 13% 13% 14% 15% 14% Sales growth – Europe 2% 16% 6% -17% -6% 15% Sales growth – N.A. 9% 8% -3% -6% -9% 1% EBIT margin by segment: Europe 9% 13% 14% 11% 12% 11% North America 9% 12% 8% 14% 15% 12% South America 23% 27% 28% 21% 23% 17% Asia Pacific 13% 16% 17% 14% 14% 6% Corporate -4% -4% -5% -7% -4% -1%

EBIT margin 7% 11% 9% 7% 10% 11% Selected items as % of revenue: Gross profit 17% 21% 21% 20% 20% 19% Asbestos-related costs 2% 2% 3% 3% 3% 1% Net income -1% 3% 2% 1% 4% 4% D&A 7% 6% 6% 6% 6% 6% Capex 4% 4% 5% 6% 8% 4% Tangible equity/assets -33% -5% -22% -15% -16% -13% shares out (avg) 1% 1% 6% 3% -2% -1%

1 Based on continuing operations (excl. expropriated Venezuelan operations). 2 Mainly due to a 7% increase in glass container shipments (mainly due to M&A) and the favorable effects of changes in foreign currency exchange rates. 3 Reflects higher cost inflation and manufacturing costs y-y. 4 Reflects the $0.6 billion purchase of Brazilian glassmaker CIV in Sept. 2010. 5 Breakdown of total assets by segment (6/30/2011): Europe (~40%), North America (~20%), South America (~20%), Asia Pacific (~20%).



BLL 5,560 8,890 1.1x n/m 12x 11x

CCK 5,060 8,520 1.0x n/m 12x 10x

REXMY 4,930 7,770 1.0x 13.9x 10x 9x

SLGN 2,530 3,890 1.2x 17.9x 14x 12x

OI 2,710 6,790 1.0x n/m 7x 6x

MAJOR HOLDERS Insiders 1% | Wellington 10% | Vanguard 5% | Manning & Napier 5% | Atlantic Investment 4% | Sasco 4% | Cambiar 3% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE As the world’s largest glass container manufacturer, Owens-Illinois benefits from scale that enables it to be a low-cost producer. While input cost pressure, execution issues and asbestos-related liabilities have reduced FCF, these issues appear temporary. The biggest risk stems from the leveraged balance sheet, as trailing adjusted EBITDA is ~20% away from breaching a debt covenant. With no tangible book protection, the margin of safety may therefore not be sufficient despite exposure to relatively defensive end-markets and an undemanding enterprise valuation of ~6.5x trailing adjusted EBITDA.



OWENS ILLINOIS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS



yield (based on 2011 FCF guidance)

7x trailing adjusted EBITDA

1.5x trailing revenue

Conservative case valuation: 2011 free cash flow guidance midpoint1 $225 million Required FCF yield 15%

Estimated fair value of the equity $1.5 billion Base case valuation: TTM adjusted EBITDA (year to June 2011)2 $1.3 billion Fair value multiple 7x

Estimated enterprise value $9.0 billion Aggressive case valuation: TTM revenue (year to June 2011) $7.1 billion Fair value multiple 1.5x

Estimated enterprise value $9.0 billion $10.7 billion Minus: Net debt (as of 6/30/2011) -$4.1 billion -$4.1 billion Minus: Net post-retirement liabilities3 -823 million -823 million Minus: Asbestos-related liabilities -408 million -408 million Minus: Non-controlling interest -157 million -157 million

Estimated fair value of the equity of Owens-Illinois4 $1.5 billion $3.5 billion $5.2 billion


Implied upside/(downside) to recent stock price ($16.50 per share) -45% 29% 91% Implied valuation metrics based on 2006-10 average financials:5 EV to revenue ($6.9 billion) 1.0x 1.3x 1.5x EV to EBITDA excl. asbestos costs ($1.2 billion) 5.8x 7.5x 8.9x Other implied valuation metrics: EV to PP&E at cost ($7.4 billion) 0.9x 1.2x 1.4x

1 Based on reduced FCF guidance of $200-250 million. Management reduced FCF guidance in July 2011 from $300 million previously due to “potential restructuring costs in Australia, the need to rebuild inventory levels in North America to avoid future supply chain issues, and capital investments to expand capacity in South America.” Net cash from operations averaged ~$630 million during 2008-10. Deducting 75% of trailing D&A of $420 million (as a proxy for maintenance capex), implies “normalized” FCF of $300+ million (excludes the contribution from Brazilian glassmaker Companhia Industrial de Vidros, which O-I acquired for ~$600 million in September 2010). 2011 capex is targeted at “up to” $375 million. 2 Based on EBITDA per the credit agreement definition (excludes asbestos-related costs, restructuring expenses, asset impairments and other costs). 3 The gross pension obligation was ~$4 billion at yearend 2010. 4 Based on ~164 million shares outstanding. 5 Based on continuing operations (excludes expropriated Venezuelan operations, which had net assets of ~$75 million). 2006-10 financials also exclude the contribution from acquired Brazilian glassmaker Companhia Industrial de Vidros. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

OWENS ILLINOIS – SELECTED BALANCE SHEET AND CASH FLOW ITEMS ($ in millions)

1 All information presented is from continuing operations only. 2 Total debt less cash divided by bank credit agreement EBITDA. The 2Q11 and 2Q10 ratios were calculated excluding the impact of the discontinued Venezuelan operations. Current bank covenants allow for a maximum ratio of 4.0x. Source: Company presentation dated July 27, 2011, available at http://bit.ly/q4SCV1



OWENS ILLINOIS – STRUCTURE OF TYPICAL CUSTOMER DEALS

Source: Company presentation dated June 15, 2011, available at http://bit.ly/ojFyoz OWENS ILLINOIS – MANAGEMENT’S Q3 2011 OUTLOOK AND FY 2011 COST INFLATION ESTIMATE

Source: Company presentation dated July 27, 2011, available at http://bit.ly/q4SCV1



Rockwell Collins (COL) – Greenhaven , Pennant , ValueAct Capital Goods: Aerospace and Defense, Member of S&P 500 Cedar Rapids, IA, 319-295-1000 www.rockwellcollins.com














per share data) 9/30/04 9/30/05 9/30/06 9/30/07 9/30/08 9/30/09 9/30/10 6/30/11 6/30/10 6/30/11

Revenue 2,930 3,445 3,863 4,415 4,769 4,470 4,665 4,792 1,208 1,190

Gross profit 786 943 1,111 1,323 1,435 1,320 1,286 1,377 323 357

Operating income 430 547 689 843 953 867 802 858 204 227

Net income 301 396 477 585 678 594 561 760 142 158

Diluted EPS 1.67 2.20 2.73 3.45 4.16 3.73 3.52 3.86 0.89 1.01

Shares out (avg) 177 177 172 167 161 158 157 156 157 154


Capex 105 118 144 133 179 155 116 135 26 39

Free cash flow 296 456 451 474 441 478 595 382 134 80



Intangible assets 550 571 654 691 807 964 1,072 1,101 1,064 1,101

Total assets 2,874 3,148 3,278 3,750 4,144 4,645 5,064 5,113 4,736 5,113

Short-term debt 0 0 0 0 287 0 24 70 22 70

Total current liabilities 964 1,184 1,324 1,459 1,740 1,359 1,452 1,440 1,366 1,440

Long-term debt 201 200 245 223 228 532 525 514 516 514



Common equity 1,133 939 1,206 1,573 1,408 1,292 1,482 1,667 1,577 1,667



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BUSINESS OVERVIEW Rockwell Collins manufactures and services communications and aviation electronics for commercial and military clients. INVESTMENT HIGHLIGHTS

Large producer of aviation electronics for commercial and military applications. Core competencies are in flight deck avionics, cabin electronics, mission communications, information management, as well as simulation and training.

Trailing P/E of 11x appears low relative to long-term growth prospects and little net debt of 0.3x trailing EBITDA. Since 2002,* annual revenue and EPS growth has averaged 8% and 14%, respectively.

Long-term growth prospects for air travel and defense spending are attractive, driven by rising living standards in developing countries, and the persistence of global security threats, respectively.

High-ROIC and strong free cash flow generation due to high-tech, proprietary products (R&D is ~20% of revenue; $1+ billion of export revenue), large aftermarket/services sales, and low capital intensity.

High-margin commercial after-market business represents ~20% of revenue (~45% of commercial segment revenue). Supplying products for retrofits and upgrades complement the OEM business.

Government business includes products for unmanned aerial vehicles and communications applications, which may be more resilient to budget cuts than programs less relevant for today’s threats.

Clay Jones (61) became CEO in 2001, following the spin-off from Rockwell Automation (ROK).


Revenue and margin pressure due to weak U.S. and European economies and budget deficits. Various branches of the U.S. government accounted for 45% of 2010 revenue. Commercial avionics demand is vulnerable to a global economic slowdown.

Recent financials may be less meaningful due to long product cycles and contract accounting. Fixed-price contracts, which represent 80+% of revenue, could lead to losses if management’s cost estimates ultimately prove to be too optimistic.

Competition from much larger companies such as Boeing and Raytheon. Some of these are also suppliers or customers of Rockwell Collins.

$1.3 billion of net post-retirement liabilities. * The company spun off from Rockwell Automation (ROK) in 2001 and has been run by the same CEO since. Share buybacks and small acquisitions (~$0.8 billion spent on M&A in 2002-10) have contributed to EPS growth.


FYE September 30 2006 2007 2008 2009 2010 YTD

6/30/11 revenue 12% 14% 8% -6% 4% 4% EBIT 21% 26% 13% -9% -6% 9% employees (end) 9% 5% 4% -5% 4% 0% government backlog1 4% 0% 14% 3% 3% n/a commercial backlog1 80% 22% 18% -8% -8% n/a total backlog1 16% 5% 15% 0% 0% n/a Revenue ($bn) 3.9 4.4 4.8 4.5 4.7 3.5 % from U.S. gov’t 39% 36% 38% 43% 45% n/a % of revenue by type: Product 90% 91% 91% 91% 88% 88% Service 10% 9% 9% 9% 12% 12% % of revenue by segment: Government 53% 51% 50% 58% 61% 58% Commercial 47% 49% 50% 42% 39% 42% Growth – Government 13% 9% 6% 9% 11% -1% Growth – Commercial 11% 20% 10% -21% -5% 14% EBIT margin by segment: Government 20% 20% 21% 23% 21% 21% Commercial 20% 22% 23% 19% 16% 19% Corporate -3% -2% -2% -2% -2% -2%

EBIT margin 17% 19% 20% 19% 17% 18% % of revenue from U.S. 68% 68% 66% 69% 71% n/a Selected items as % of revenue: Gross profit2 29% 30% 30% 30% 28% 29% Net income 12% 13% 14% 13% 12% 13% D&A 3% 3% 3% 3% 3% 3% Capex 4% 3% 4% 3% 2% 3% Return on tang. equity 104% 82% 91% 128% 152% 85% Tangible equity/assets 18% 25% 23% 13% 10% 14% shares out (avg) -3% -3% -4% -2% 0% -2%

1 Backlog totaled $4.5 billion at 9/2010 (~75% government, ~25% commercial). 2 Stated after R&D costs. R&D totaled $861 million in FY10 (18% of revenue), of which ~60% was customer-funded and ~40% was funded by the company.



BA 42,640 45,470 .7x n/m 14x 11x

RTN 14,100 15,600 .6x n/m 8x 7x

LLL 6,690 10,280 .7x n/m 7x 7x

COL 6,950 7,270 1.5x 12.3x 11x 10x

MAJOR HOLDERS CEO Jones 1% | Other insiders 1% | State Street 4% | Vanguard 4% | T. Rowe 3% | Lateef 3% | ValueAct 1% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE The share price of avionics manufacturer Rockwell Collins is down by nearly a third over the last two months. At $45 per share, the implied forward P/E is ~10x based on the average of analyst EPS estimates. This appears low relative to the company’s favorable long-term earnings growth prospects and a deleveraged balance sheet. At the recent valuation, investors may underestimate the resilience of Rockwell’s balanced business model (~50/50 historical split of commercial/government revenue). Share repurchases and high-ROIC reinvestment opportunities could lead to significant value creation over time.



ROCKWELL COLLINS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 10% required FCF yield (based on avg

2006-10 FCF)

10x 2006-10 average EBIT

2.5x trailing revenue


2006-10 average free cash flow (after pension contributions)1 $490 million

Required FCF yield 10%

Estimated fair value of the equity $4.9 billion


2006-10 average EBIT (incl. pension charges)2 $825 million




TTM revenue (year to June 2011) $4.8 billion



Minus: Net debt (as of 6/30/2011) -316 million -316 million

Minus: Net post-retirement liabilities3 -$1.3 billion

Estimated fair value of the equity of Rockwell Collins4 $4.9 billion $7.9 billion $10.4 billion


Implied upside/(downside) to recent stock price ($45 per share) -29% 15% 51%



EV to EBIT (~$865 million) 8x 10x 14x

1 The company has carried little net debt throughout 2006-10. As of June 30, net debt of $315 million represents only 0.3x of trailing EBITDA. Cumulative cash contributions to the pension plan were ~$420 million during 2006-10 (~$85 million average per year) 2 Trailing EBIT is ~$865 million for the year ended June 2011. This represents an 18% EBIT margin, which approximates the 2006-10 average. 3 The gross pension obligation was ~$3.4 billion as of September 2010. 4 Based on ~154 million shares outstanding.


ROCKWELL COLLINS – FY 2011 MANAGEMENT GUIDANCE

Revenue: $4.80-4.85 billion

Segment operating margin: 20.0-20.5%

EPS from continuing operations: $4.00-4.10

Cash from operating activities: about $650 million

R&D: about $925 million

Capex: about $150 million

Source: Company presentation dated July 22, 2011, available at http://bit.ly/o94qpu ROCKWELL COLLINS – SHARE REPURCHASES

1.1 million shares repurchased in Q3 FY11 • Cost of purchases: $66 million • Average cost: $61.77 per share

62 million shares repurchased since January 2002 • Cost of purchases: $2.9 billion • Average cost: $47.36 per share

Remaining authorization: $51 million

Shares outstanding as of June 30: 154 million

Source: Company presentation dated July 22, 2011, available at http://bit.ly/o94qpu



ROCKWELL COLLINS – LONG-TERM FINANCIAL TARGETS

Source: Company presentation dated August 10, 2011, available at http://bit.ly/pHyTNk ROCKWELL COLLINS – GOVERNMENT SYSTEMS BUSINESS – STRENGTHS

Source: Company presentation dated August 10, 2011, available at http://bit.ly/pHyTNk ROCKWELL COLLINS – COMMERCIAL SYSTEMS BUSINESS – “NEW AIRCRAFT DRIVING OEM GROWTH”

* Pro Line Fusion platforms.

Source: Company presentation dated August 10, 2011, available at http://bit.ly/pHyTNk



Sara Lee (SLE) – Third Point , ValueAct Consumer Non-Cyclical: Food Processing, Member of S&P 500 Downers Grove, IL, 630-598-6000 www.saralee.com














per share data) 7/2/05 7/1/06 6/30/07 6/28/08 6/27/09 7/3/10 7/2/11 7/2/11 7/3/10 7/2/11

Revenue 11,346 11,460 11,983 10,949 10,882 8,339 8,681 8,681 2,113 2,297

Gross profit 4,551 4,440 4,613 3,941 3,844 2,983 2,813 2,813 709 694

Operating income 746 192 429 (156) 358 706 487 572 33 56

Net income 719 555 504 (79) 364 506 1,287 2,359 187 111

Diluted EPS 0.77 0.04 0.59 (0.39) 0.31 0.84 0.54 0.52 0.16 0.08

Shares out (avg) 789 766 741 715 701 688 621 621 664 588

Cash from operations 2,046 1,353 1,288 506 620 894 960 n/a 153 n/a

Capex 530 538 625 631 515 379 385 n/a 159 n/a

Free cash flow 1,516 815 663 (125) 105 515 575 n/a (6) n/a

Cash & investments 655 533 2,231 2,517 1,284 951 955 2,132 935 2,132



Total assets 14,879 14,300 14,660 11,755 10,830 9,419 8,836 9,612 9,144 9,612

Short-term debt 1,154 619 2,142 1,450 848 66 63 1,067 52 1,067


Long-term debt 4,171 4,112 3,806 2,770 2,340 2,738 2,718 1,932 2,718 1,932



Common equity 2,985 2,732 2,449 2,543 2,811 2,036 1,487 1,546 1,757 1,546

EBIT/capital employed 18% 5% 13% -6% 15% 28% 21% 33% n/m n/m


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BUSINESS OVERVIEW Sara Lee is a food and beverage producer.

In January, the company announced it will divide into two publicly-traded companies. One company will be focused around the current International Coffee and Tea business, while the other company will be focused on North American Retail Meats and North American Foodservice businesses. INVESTMENT HIGHLIGHTS

Company split process “progressing as planned” based on management comments in August. Since the announced split of the company in January, management’s aim is to launch two “Newco’s” as independent entities by the first half of calendar 2012.

International coffee/tea business ($4.1 billion of pro-forma FY11 revenue) to form one company. The business sells coffee and tea products under brands including Douwe Egberts, Senseo, Maison du Café, Marcilla, Merrild and Pickwick, Café Caboclo, Café Pilão and Café do Ponto. ~75% of revenue is generated in European retail/foodservice.

North American retail/foodservice ($3.9 billion of pro-forma FY11 revenue) to form the other company. It includes well-known packaged meat brands sold to retail and foodservice customers in North America. Significant brands include Hillshire Farm, Ball Park, Jimmy Dean, Sara Lee and State Fair.

Pure-play NewCo’s may be potential acquisition candidates. If so, Sara Lee’s pro-forma EV to forward revenue multiple of ~1.2x may be attractive.

Appointed Jan Bennink executive chairman to implement the split. Bennink was CEO of Royal Numico, a supplier of baby food/clinical nutrition. He also worked at Danone, Benckiser, and P&G.

“Expect to pay $3.00 per share special dividend in fiscal 2012” Net debt in June 2012 is therefore expected at $2.0 billion, up from $0.6 billion at June 2011 (difference also includes other items such as FCF, disposal proceeds, and restructuring/deal costs).

Guiding for continuing revenue of $8.5-8.75 billion in FY12, up 6-9% y-y (excl. international bakery business which is being sold), and adjusted EBIT of $875-930 million (up 10-17% y-y). For simplicity, guidance assumes that the split will occur on the last day of fiscal 2012 (i.e. 6/30/12).

MAJOR HOLDERS Insiders <1% | Harris 6% | ValueAct 4% | Vanguard 4% | State Street 4% | Sasco 3% | BlackRock 2% | CapRe 2%

SELECTED OPERATING DATA – CONTINUING OPS1 FYE June 30 2010 2011 Revenue ($bn) 8.3 8.7 % of revenue by segment: North American retail 34% 33% North American foodservice 19% 18% International beverage 39% 41% International bakery (to be divested; sales process pending) 9% 8% Revenue growth by selected segment: North American retail n/m 2% North American foodservice n/m 1% International beverage n/m 10% Adjusted EBIT margin by segment:2 North American retail 12% 11% North American foodservice 4% 5% International beverage 18% 13% International bakery (to be divested; sales process pending) -2% -2% Corporate -3% -2%

Adjusted EBIT margin 8% 7% Selected items as % of revenue: Gross profit 36% 32% EBIT 10% 7% Net income 7% 4% shares out (avg) -2% -10%

1 Financials are based on continuing operations, as defined in the company’s press release from August 11, 2011. Continuing operations exclude announced disposals of businesses, except for the International Bakery segment, which is still included in the above “continuing operations.” A sales process is underway for International Bakery, and “numerous bids have been received.” The remaining “continuing operations” presented above include the businesses, which will form the two publicly-traded companies as announced in January ‘11. 2 Our adjusted figures, which differ from the company-reported adjustments - exclude mark-to-market derivative gain/(loss) and 2010 contingent sale proceeds.


Valuation may already reflect the benefits from the company split, with a pro-forma EV to forward EBIT multiple of ~12x. While this view could miss the potential for revenue growth and margin improvement at each NewCo over time, this could take years and require additional capex to achieve.

Input cost pressures. Sara Lee expects commodity cost increases of $500+ million y-y in FY12, on top of a ~$650 million y-y increase in FY11.

Execution. The proposed transaction involves many uncertain variables, such as restructuring costs and the performance of the business, which may worsen given the difficulty in passing on input cost rises.


THE BOTTOM LINE Shares of food and beverage producer Sara Lee represent an intriguing special situation following the announcement in January to split up the business in two independent companies: one focused on the beverage business; the other on the North American meat business. If the deal is executed as contemplated by the first half of 2012, the launch of the two pure-play businesses may soon attract bid interest from competitors. On this basis, Sara Lee’s pro-forma EV to forward revenue multiple of ~1.2x may be attractive. However, valuing the businesses based on recent earnings appears a less favorable proposition. Margin pressure from rising input costs, and execution risks tied to the transaction, further limit the risk-reward.



SARA LEE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 10x FY12 estimated

EPS1 10x estimated FY12

EBIT1 2x estimated FY12

revenue1


Midpoint of FY12 adjusted EPS guidance for the two new companies $0.92


Estimated equity value per share $9.20 per share


Midpoint of FY12 adjusted EBIT guidance for the two new companies $0.9 billion




Midpoint of FY12 revenue guidance for the two new companies $8.6 billion



Plus: $3.00 per share special dividend to be paid in FY12 1.8 billion 1.8 billion 1.8 billion

Minus: Estimated net debt in June 20122 n/m -2.0 billion -2.0 billion

Estimated fair value of the equity of Sara Lee3 $7.1 billion $8.8 billion $17.0 billion


Implied upside/(downside) to recent stock price ($18 per share) -32% -17% 62% 1 FY12 estimates based on the midpoint of guidance for the two new companies, as provided on August 11, 2011. FY12 refers to the year ended June 2012. 2 Per management guidance. Net debt is ~$0.6 billion as of June 2011. The increase in net debt is expected because of the special dividend payment, restructuring, transaction-related and other costs. Offsetting factors derive from operational free cash flow generated in FY12 and proceeds from disposals. 3 Based on ~585 million shares outstanding. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

SARA LEE – DISAGGREGATION OF EPS

Source: Company presentation dated August 11, 2011, available at http://bit.ly/orfSmj

SARA LEE – FY2010 MANAGEMENT GUIDANCE *

* International Bakery excl. from FY11 and guidance. Assumes spin occurs last day of FY. Dollar/Euro exchange rate 1.44 for FY12 and 1.36 for FY11 results. Source: Company presentation dated August 11, 2011, available at http://bit.ly/orfSmj



SARA LEE – ADJUSTED OPERATING INCOME DRIVERS, FY11

SARA LEE – COMMODITY COST INCREASES

SARA LEE – BUSINESS PORTFOLIO CHANGES

Source: Company presentation dated August 11, 2011, available at http://bit.ly/orfSmj



Sealy (ZZ) – H Partners Consumer Cyclical: Furniture & Fixtures Trinity, NC, 336-861-3500 www.sealy.com








Insider ownership: 4% FYE 11/29/13 0.23 0.23 1 P / tangible book n/m






per share data) 11/28/04 11/27/05 11/26/06 12/2/07 11/30/08 11/29/09 11/28/10 5/29/11 5/30/10 5/29/11

Revenue 1,314 1,470 1,583 1,702 1,343 1,175 1,220 1,244 291 321

Gross profit 574 650 706 707 549 488 510 499 122 125

Operating income 22 206 191 176 111 103 125 106 23 21

Net income (48) 68 73 77 (4) 19 2 (29) 5 (0)

Diluted EPS (0.64) 0.90 0.82 0.80 0.37 0.15 0.14 0.08 0.03 0.01

Shares out (avg) 75 70 84 91 91 92 96 96 95 98

Cash from operations 44 135 58 94 54 79 49 45 4 (5)

Capex 23 29 31 42 25 12 17 23 4 7

Free cash flow 21 106 27 52 29 66 32 22 0 (13)




Total assets 899 916 1,003 1,025 914 1,016 937 933 965 933

Short-term debt 9 13 18 36 21 14 2 2 10 2


Long-term debt 1,044 960 814 757 762 834 793 785 798 785



Common equity (457) (412) (173) (129) (168) (108) (88) (71) (88) (71)

EBIT/capital employed 11% >100% 90% 66% 40% 39% 52% 39% n/m n/m


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BUSINESS OVERVIEW Sealy is the leading maker of mattresses in North America. INVESTMENT HIGHLIGHTS

U.S. market leader for two decades, with leading positions in Canada and Mexico. Brands comprise Sealy, Posturepedic, Stearns & Foster, and Embody. While the firm is known as an innerspring mattress provider, it has added specialty products. Sealy sells through 3,000 retailers with 7,000+ U.S. points of sale. The company has 19% share of the $5.9 billion U.S. market, ahead of Serta (17%), Simmons (15%), Tempur-Pedic (12%), and Select Comfort (5%).

New Posturepedic* line may drive innerspring market share gains in H2 2011. The rollout appears to have gone well, with Sealy shipping the line to 80+% of retail partners by Memorial Day. The company is also developing a new S&F line.

Attractive business model, with modest capex (~2% of sales) and working capital requirements. Price discovery is murky, making it difficult for consumers to compare pricing, even on the Internet.

Global growth focused on South America, Asia. The company already has leading share of the premium market in Argentina. Sealy’s China JV has opened its first manufacturing plant in that country. Sealy sold its European business during FY2010.

Capital allocation prioritizes debt reduction, a strategy that could result in equity value accretion. Nonetheless, investors should expect conversion of $183 million of notes in July 2012, resulting in a potential diluted share count of 325+ million.**


Future dilution likely, but difficult to gauge. The degree of dilution will depend on the stock price in 2012, making it difficult to appraise current value.

Rising commodity prices. While Sealy has raised wholesale prices and imposed fuel surcharges, margins may be pressured if inflation accelerates. Positively, key competitors have also raised prices.

Exposed to consumer spending weakness, as demand correlates with per-capita GDP and home sales. The mattress replacement cycle is 9-10 years, with bedding often replaced in the year of home purchase. Recently, replacement demand has been deferred due to ongoing economic weakness.

SELECTED OPERATING DATA FYE November 30 2006 2007 2008 2009 2010 1H10 Employees (end) 6,233 6,099 4,817 4,848 4,270 n/a Change (y-y) n/a -2% -21% 1% -12% n/a Revenue ($mn) 1,448 1,460 1,343 1,175 1,219 627 Change (y-y) -1% 1% -8% -13% 4% 4% % of revenue by major geography:1 U.S. 83% 81% 79% 81% 78% 79% Canada 11% 13% 14% 13% 15% 14% Tangible assets ($mn) 598 615 551 653 573 568 Selected items as % of tangible assets: Cash 8% 2% 5% 20% 19% 14% Debt 139% 129% 142% 130% 139% 139% Tangible equity -96% -87% -96% -72% -79% -77% Selected items as % of revenue: Gross profit 46% 40% 41% 42% 42% 39% SG&A 34% 34% 33% 33% 33% 34% Adjusted EBITDA2 17% 15% 12% 14% 15% 10% EBIT 14% 13% 9% 10% 11% 7% Net income 5% 5% 0% 1% -1% 0% D&A 2% 2% 3% 3% 2% 2% Capex 2% 3% 2% 1% 1% 2% Basic shares out (avg) 84 91 91 92 96 98 Diluted shares out (avg) 90 96 94 186 290 n/m basic shares out 19% 9% 0% 1% 4% 4% diluted shares out 19% 7% -3% 98% 56% n/m

1 During FY2010, the company disposed of its Europe operations, and the results of that reportable segment have been excluded from all periods. 2 In the company’s senior debt agreements, Adjusted EBITDA is defined as net income plus interest, taxes, D&A adjusted to exclude unusual items and other adjustments permitted in calculating covenant compliance.



TPX 3,460 3,850 3.1x n/m 16x 14x

SCSS 720 640 1.0x 8.0x 14x 11x

ZZ 170 880 .7x n/m 17x 12x

MAJOR HOLDERS CEO Larry Rogers 2% | Other executives <1% | KKR 47% | H Partners 15% | Pzena 6% | Franklin 4% | D.E. Shaw 2% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends? * Posturepedic accounted for 46% of company sales in FY2010. ** See management guidance on dilution on bottom half of next page.

THE BOTTOM LINE Sealy has led the U.S. mattress market for a long time (19% share in 2010). Sealy generated $1.2 billion in sales last year, almost 10% more than competitor Tempur-Pedic (TPX). Meanwhile, Sealy’s enterprise value totals less than $900 million, compared to $4.0 billion for TPX. The high leverage of Sealy suggests that capital structure changes are likely, and management expects certain notes to convert into equity in 2012. Following the dilutive event, Sealy should end up with a manageable capital structure while retaining equity upside. Distressed investor H Partners has been a recent buyer of Sealy common stock. While other investors have generally shunned the equity in favor of the debt, we find the equity interesting for investors focused on risk-reward rather than strictly on downside protection. Sealy’s recent operating performance has been masked by one-time items, including $13 million in product launch expenses in 1H11. The new Posturepedic line appears to be meeting expectations. Sealy as an enterprise is almost surely here to stay, and the equity deserves a closer look.



SEALY – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 0.8x 2010 net sales1 6x average adjusted

EBITDA from 2006-2010 6x estimated normalized

adjusted EBITDA


Net sales, 2010 $1.2 billion

Assumed fair value multiple 0.8x


Average adjusted EBITDA from 2006-2010 $196 million



Estimated normalized adjusted EBITDA $250 million


Estimated fair value of the enterprise $1.0 billion $1.2 billion $1.5 billion

Plus: Cash equivalents, as of May 29, 2011 $79 million $79 million $79 million

Minus: Current portion of debt and accrued interest ($16 million) ($16 million) ($16 million)

Minus: Long-term obligations ($785 million) ($785 million) ($785 million)

Estimated fair value of the equity of Sealy $250 million $450 million $780 million

$2.60 per share $4.60 per share $7.90 per share

(98 million shares out) (98 million shares out) (98 million shares out)

Estimated fair value of the equity of Sealy, assuming conversion of $183 million in notes 2

$440 million $630 million $960 million $1.40 per share $2.00 per share $3.00 per share

(320 million shares out) (320 million shares out) (320 million shares out)

Implied valuation multiples:

Enterprise value to FY11 sales estimate ($1.28 billion) 0.8x 0.9x 1.2x

Enterprise value to FY12 sales estimate ($1.35 billion) 0.7x 0.9x 1.1x

1 Comparable companies Tempur-Pedic (TPX) and Select Comfort (SCSS) recently traded at EV to 2010 revenue multiples of 3.6x and 1.2x, respectively. 2 Based on disclosures made by the company in SEC filings and a recent investor presentation (key excerpts follow).

Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. SEALY – POTENTIAL FUTURE SHARE COUNT ASSUMING CONVERSION OF CERTAIN NOTES

Source: Company presentation dated July 2011, available at http://bit.ly/nLLSzK



SEALY – POTENTIAL DELEVERAGING AS CATALYST?

“Convertible PIK notes soft call in 2012 is a potentially significant deleveraging event in addition to utilizing strong free cash flow generation for opportunistic calls/market purchases of senior notes”

1 Includes reduction for original issue discount of $9.6 million. 2 Adjusted EBITDA calculated pursuant to indentures governing the company’s notes. 3 Ratio computed on the assumption the convertible note is converted to equity in 2012.

SEALY – DEBT MATURITY PROFILE

MATTRESS INDUSTRY – ANNUAL SALES, 1981-2010

Source for above charts: Company presentation dated July 2011, available at http://bit.ly/nLLSzK



Syneron (ELOS) – Baupost Health Care: Medical Equipment & Supplies Yokneam Illit, Israel, 972-4-909-6200 www.syneron.com



52-week range: $7.60 - $14.92 Latest Ago Ests P/E FYE 12/31/11 n/m

Market value: $324 million This quarter -$0.10 -$0.02 4 P/E FYE 12/30/12 40x


Shares out: 34.8 million FYE 12/31/11 -0.15 -0.04 4 EV/ LTM revenue 0.6x

Ownership Data FYE 12/30/12 0.23 0.31 4 EV/ LTM EBIT n/m



Insider sales (last six months): 0 EPS Surprise Actual Estimate LTM EBIT yield -1%

Institutional ownership: 84% 8/11/11 -$0.01 -$0.01 LTM pre-tax ROC -6%



per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 58 87 117 141 115 55 190 208 49 61

Gross profit 51 76 99 114 85 36 88 107 23 31

Operating income 26 39 35 25 (2) (24) (34) (1) (7) (1)

Net income 27 41 40 31 6 (24) (26) (5) (6) (0)

Diluted EPS 1.14 1.48 1.44 1.12 0.20 (0.86) (0.74) 0.01 (0.18) (0.01)

Shares out (avg) 19 25 27 28 27 28 34 35 34 35

Cash from operations 23 31 37 48 20 (1) (2) (9) 1 (1)

Capex 1 1 1 2 1 1 1 2 0 1

Free cash flow 22 30 36 46 19 (1) (3) (11) 1 (1)




Total assets 110 170 225 269 281 270 375 371 374 371

Short-term debt 0 0 0 0 0 0 3 0 0 0


Long-term debt 0 0 0 0 0 0 0 0 0 0

Total liabilities 15 25 31 39 39 46 98 89 103 89


Common equity 94 145 194 231 243 224 277 282 271 282

EBIT/capital employed >100% >100% >100% 98% -8% -256% -508% -6% n/m n/m


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BUSINESS OVERVIEW Syneron, based in Israel, provides aesthetic medical devices used in non-invasive procedures. It operates in two segments:

Professional aesthetic devices (95% of TTM revenue): develops Syneron and Candela-branded devices for hair removal, wrinkle reduction, as well as the treatment of lesions, acne, leg veins, and cellulite. Customers are plastic surgeons, dermatologists, and other qualified practitioners.

Emerging business units (5% of TTM revenue): aesthetic products for the home-use market (incl. P&G deal in 2007). INVESTMENT HIGHLIGHTS

Niche medical devices company focused on aesthetic body and face applications in professional and home-use markets worldwide.

Losses in home-use segment mask recent profits in professional segment, which has $8 million of trailing EBIT (Q2: $1.9 million). D&A overstates maintenance capex due to intangibles amortization.

Net cash represents ~65% of recent market value. At June 30, Syneron had $211 million of cash and available-for-sale marketable securities, and no debt.

Candela acquisition in 2010 expanded recurring revenue (consumables/services), global distribution, and the installed base of patented products.

$30 million of run-rate, annual R&D represents ~25% of EV. Investors may underestimate the ROIC of the patented ELOS technology and of future R&D.

Founder and chairman Shimon Eckhouse (66) owns 8%. Eckhouse is a scientist/entrepreneur in medical devices (founded ESC/Lumenis, ColorChip).

Baupost more than doubled its stake to 11% in Q2. INVESTMENT RISKS & CONCERNS

FCF-negative since 2009. While recent profitability in the professional devices segment is encouraging, the home-use business continues to lose money. It may consume significant cash with little or no return.

Product sales may decline if the global economy weakens (see 2008/09), due to their discretionary use, and if practitioners’ access to credit worsens.

Use of cash. At recent prices, buybacks should be a priority instead of M&A and new product development. Management may favor the latter two.

Competition from laser and other light-based products, as well as conventional treatments such as Botox, collagen injections, chemical peels, liposuction, electrolysis, and microdermabrasion.

Potential losses of “$0-21 million” remain from Palomar litigation, despite a positive recent verdict.


FYE December 31 2006 2007 2008 2009 2010 YTD

6/30/11 Revenue ($mn) 117 141 115 55 190 110 Growth (y-y) 34% 21% -18% -52%2 246% 20% % of revenue by segment: Professional devices >95% >95% 97% 95% 98% 92% Emerging businesses <5% <5% 3% 5% 2% 8% EBIT margin by segment:3 Professional devices n/a n/a 0% -40% -15% 2% Emerging businesses n/a n/a -9% -110% -156% -62% EBIT margin 30% 22% 0% -44% -18% -3% % of revenue by type: Lasers/other products 94% 91% 98% 90% 70% n/a Services 6% 9% 2% 10% 30% n/a % of revenue by geography: North America 57% 57% 52% 51% 35% 34% Other 43% 43% 48% 49% 65% 66% Revenue growth by geography: North America 22% 21% -25% -54% 137% 14% Other 53% 20% -9% -51% 360% 24% Selected items as % of revenue: Gross profit 85% 81% 74% 65% 47% 51% R&D 7% 9% 12% 24% 14% 13% Net income 34% 22% 5% -43% -13% -2% D&A 1% 1% 2% 4% 5% 5% Capex 1% 2% 1% 1% 0% 1% Tang. equity/assets 86% 86% 86% 83% 74% 69% shares out (avg) 9% 2% -1% 0% 25%4 2%

1 Financials are based on U.S. GAAP. Candela is included from its acquisition in January 2010. Certain 2006-08 figures are not available due to an introduction of segment reporting in 2010. 2 Reflects the impact of a weak economy and tightening credit for customers. 3 Corporate overheads are allocated to segments. 4 Reflects shares issued in connection with the Candela acquisition.



PMTI 150 70 1.1x 1.1x n/m 75x

CYNO 120 60 .7x 1.0x n/m 47x

CUTR 100 10 .2x 1.1x n/m n/m

SLTM 80 50 .5x 2.0x n/m 14x

ELOS 320 120 .6x 1.4x n/m 40x

MAJOR HOLDERS Chairman Eckhouse 8% | Other insiders 4% | Baupost 11% | FMR 9% | Royce 4% | Paradigm 3% | Brandes 3% | Frontier 3% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE By purchasing rival medical device company Candela in 2010, Syneron expanded the recurring revenue mix, improved global distribution, and increased the installed base of patented products. While benefits have yet to show in consolidated financials, investors may overlook recent profitability in the professional segment (masked by losses in the home-use segment). At an EV-to-trailing revenue of 0.6x and price-to-tangible book of 1.4x, shares appear materially undervalued relative to earning power ($30+ million of average annual EBIT in 2004-07), the strong balance sheet, and incentivized insiders who own 10+%.



SYNERON – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 1.0x tangible book Sum-of-the-parts Sum-of-the-parts


Tangible shareholders’ equity (6/30/2011) $226 million


Estimated fair value of the equity $226 million

Base case / aggressive case valuation:

Value of Professional segment:

TTM revenue (year to June 2011) $197 million $197 million

Fair value multiple 1.5x 2.5x

Estimated enterprise value $296 million $493 million

implied EV-to-TTM EBITDA of professional segment1 17x 29x

implied EV-to-2004-07 average EBITDA of Syneron (excl. Candela)1 9x 15x

Value of Home-use segment (“emerging business unit”):

1H11 annualized revenue $18 million $18 million

Fair value multiple 0x 5.0x

Estimated enterprise value $0 $90 million

Value of other assets/liabilities:

Plus: Net cash (as of 6/30/2011) $211 million $211 million

Minus: Potential patent-litigation liability2 -$21 million $0

Estimated fair value of the equity of Syneron Medical3 $226 million $486 million $794 million $6 per share $14 per share $23 per share

Implied upside/(downside) to recent stock price ($9.30 per share) -31% 48% 143%


EV to revenue ($208 million) .1x 1.3x 2.8x

EV to gross profit ($107 million) .1x 2.6x 5.4x

EV to EBITDA ($9 million) 2x 31x 65x


Price to tangible book ($226 million) 1.0x 2.1x 3.5x

Net cash as % of estimated equity value 93% 43% 27%

1 EBITDA may be a proxy for pre-tax cash flow to the equity (before working capital changes) due to minimal capex and no debt. Capex averages $1-2 million annually. Syneron’s EBITDA averaged $30+ million before 2008, when the U.S. economic downturn led to lower sales and negative operating leverage. While the acquisition of competitor Candela in 2010 added scale, recent profitability in the professional segment remains depressed relative to the 2004-07 period. Our estimate of professional segment EBITDA for the year to June 2011 assumes 90% of total D&A is attributable to the professional segment. Syneron allocates corporate overheads to the segments, with no separate corporate costs reported. 2 Related to patent litigation by competitor Palomar Medical Technologies (PMTI). Syneron management provided an updated estimate of loss contingency in June 2011 of “$0 to $21 million” (from $0-50 million previously). 3 Based on 35 million shares outstanding.


SYNERON – Q1 2011 REVENUE AND GROSS MARGIN HIGHLIGHTS

Source: Company presentation dated June 2011, available at http://bit.ly/rh0V2s



SYNERON – GEOGRAPHIC FOOTPRINT AND DISTRIBUTION

SYNERON – #1 OR #2 MARKET POSITION IN SEVERAL PROFESSIONAL AESTHETIC DEVICE SEGMENTS

SYNERON – NEW PRODUCT PIPELINE

Source: Company presentation dated June 2011, available at http://bit.ly/rh0V2s



Valero Energy (VLO) – Appaloosa , Pennant Energy: Oil & Gas Operations, Member of S&P 500 San Antonio, TX, 210-345-2000 www.valero.com














per share data) 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 6/30/11 6/30/10 6/30/11

Revenue 54,619 80,616 87,640 89,987 106,676 64,599 82,233 100,780 20,561 31,293

Gross profit 6,822 10,178 13,777 12,928 10,589 5,913 7,775 8,657 2,334 2,913

Operating income 2,979 5,268 7,722 6,630 531 83 1,876 2,502 904 1,290

Net income 1,791 3,577 5,461 5,234 (1,131) (1,982) 324 696 583 744

Diluted EPS 3.27 5.88 8.36 7.40 (2.20) (0.50) 1.63 2.32 0.92 1.30

Shares out (avg) 510 549 611 565 524 541 563 564 563 567

Cash from operations 2,980 5,850 6,312 5,258 3,095 1,823 3,045 4,229 788 896

Capex 1,292 2,133 3,187 2,260 2,893 2,306 1,730 1,691 403 568

Free cash flow 1,688 3,717 3,125 2,998 202 (483) 1,315 2,538 385 328

Cash & investments 864 436 1,590 2,464 940 825 3,334 4,107 2,001 4,107


Intangible assets 2,712 5,224 4,406 4,309 224 227 224 222 223 222

Total assets 19,392 32,798 37,753 42,722 34,417 35,572 37,621 39,526 36,477 39,526

Short-term debt 412 222 475 392 312 237 822 861 523 861


Long-term debt 3,901 5,156 4,619 6,470 6,264 7,163 7,515 6,762 7,511 6,762


Preferred stock 208 68 0 0 0 0 0 0 0 0

Common equity 7,590 14,982 18,605 18,507 15,620 14,725 15,025 15,982 15,051 15,982



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BUSINESS OVERVIEW Valero manufactures and markets transportation fuels, other petrochemical products, and power. It has three segments:

Refining (80% of assets*): includes 15 petroleum refineries (including Pembroke refinery acquired in August) with a combined throughput capacity of 2.9 million barrels per day.

Retail (5% of assets): ~6,800 retail and wholesale outlets in the U.S., Canada and the Caribbean, which market refined crude (i.e. distillates, gasoline), mainly from own refining.

Ethanol (2% of assets): includes 10 ethanol plants (7 acquired in ‘09; 3 in’10) with a capacity of 1.1 billion gallons/year. INVESTMENT HIGHLIGHTS

World’s largest independent refiner. While Valero lacks the scale and sourcing ability of the integrated E&P majors, it has low-cost operations and also benefits from some retail integration (~6,800 sites). Most of the refining capacity is in the U.S., mainly along the Gulf Coast (60+% of YTD throughput).

One of the largest ethanol companies in the U.S. Valero’s opportunistic buy of 10 plants in 2009/10 appears shrewd and may yield increasing profits.

EV-to-net PP&E of ~70% may not adequately reflect the value of Valero’s assets. The equity, which trades at ~75% of tangible book, may have big upside. EV-to-2006/07 average EBITDA is 2x.

“Location is most important” in the refining business, according to management. Other “still important” factors are a refinery’s complexity and size, and, as always, execution.


Non-controllable, market-related risks, including the price of inputs (crude) and outputs (distillates, gasolines), as well as the global refining capacity supply and demand balance. Earnings are impossible to predict (yet capex decisions may ignore this).

Quality of assets? As Valero touts its recent $1.8 billion cash acquisition of U.K.-based Pembroke as “portfolio-upgrading,” what does this imply for the competitive position of its existing U.S. assets?

Competition from larger, more-integrated E&P majors, which are better positioned to withstand depressed refining margins or feedstock shortages.

$3.5 billion of net debt (0.9x trailing EBITDA) as of June 30, excluding 1.8 billion cash outflow for Pembroke. ~70% of total debt matures in 2015+.

Potential U.S. greenhouse gas restrictions may put U.S. refiners at a disadvantage to offshore refineries.

* Based on assets of $40 billion as of June 30 (corporate assets’ share: 12%)


FYE December 31 2006 2007 2008 2009 2010 YTD

6/30/11 refinery throughput 13% % -17% -8% 0% 7% throughput GP/bbl1 12% -1% -9% -46% 30% 19% refinery EBIT/bbl 11% -10% -25% -86% 231% 60% revenue 12% 9% 25% -39% 27% 47% Assets ($bn) 37.8 42.7 34.4 35.6 37.6 39.5 % of assets by segment: Refining 91% 88% 89% 87% 81% 80% Retail 5% 5% 5% 5% 5% 5% Ethanol 0% 0% 0% 2% 3% 2% Corporate 4% 7% 5% 6% 12% 12% Revenue ($bn) 78.2 85.1 106.7 64.6 82.2 57.6 % of revenue by segment: Refining 89% 90% 90% 86% 85% 86% Retail 11% 10% 10% 12% 11% 10% Ethanol 0% 0% 0% 2% 4% 4% EBIT margin by segment: Refining 11% 9% 5%2 0% 3% 3% Retail 2% 3% 4% 4% 4% 3% Ethanol n/m n/m n/m 14% 7% 5%

EBIT margin 9% 7% 4%2 0% 2% 3% U.S. as % of revenue3 87% 86% 83% 85% 82% n/a Selected items as % of revenue: Gross profit 16% 14% 10% 9% 9% 8% Net income 6% 5% -1% 0% 1% 1% D&A 1% 2% 1% 2% 2% 1% Capex4 4% 3% 3% 4% 2% 2% Throughput GP/bbl1 $12 $12 $11 $6 $8 $9 Refining EBIT/bbl $8 $7 $5 $1 $2 $4 Return on tang. equity 40% 30% -8% -2% 6% 11%5 Tang. equity/assets 40% 40% 41% 43% 40% 40% shares out (avg) 11% -8% -7% 3% 4% 1%

1 Refining revenue less cost of sales divided by throughput volume. 2 Excludes $4.0 billion goodwill impairment loss in 2008. 3 Based on location of customer. 86% of yearend 2010 assets are in the U.S. 4 Excludes deferred turnaround and catalyst costs 5 Annualized.



TSO 2,760 3,880 .2x .8x 5x 5x

WNR 1,400 2,280 .3x 1.9x 5x 5x

ALJ 480 1,480 .3x 2.0x 6x 4x

VLO 10,770 14,290 .1x .7x 5x 5x

MAJOR HOLDERS Insiders <1% | FMR 5% | Brandes 2% | Appaloosa 1% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE Valero has large, low-cost refining assets along the U.S. Gulf Coast. While these assets face threats from competitors and produce inherently volatile, market-driven results, they remain important to the U.S. economic infrastructure. With shares trading at ~75% of tangible book, and an EV-to-net PP&E of ~70%, the market may be underestimating Valero’s resilience and future earning power. However, we struggle with the recent $1.8 billion cash acquisition of U.K.-based Pembroke, a transaction which has weakened the balance sheet, and, perhaps, highlighted the vulnerabilities of existing U.S. assets.



VALERO – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS


Valuation methodology 0.5x tangible book 6x average 2006-10 EBITDA less capex

1x net PP&E + net working capital


Tangible shareholders’ equity (6/30/2011) $15.8 billion



Average 2006-10 EBITDA $5.4 billion

Average 2006-10 capex1 -$2.5 billion

Average 2006-10 EBITDA less capex $2.9 billion




Net PP&E (6/31/2011) $23.2 billion

Net working capital (6/31/2011) 2.4 billion

Net PP&E + net working capital 25.6 billion



Minus: Net debt (6/30/2011) -$3.5 billion -$3.5 billion

Minus: Post-retirement liabilities, net (12/31/2010) -$1.1 billion -$1.1 billion

Estimated fair value of the equity of Valero Energy2 $7.9 billion $12.8 billion $21.0 billion


Implied upside/(downside) to recent stock price ($20 per share) -31% 12% 84%

Implied valuation metrics based on TTM financials:3



FCF yield ($2.3 billion) 29% 18% 11%

Implied valuation metrics based on 5-year average financials:4



FCF yield ($1.4 billion) 18% 11% 7%


Price to tangible book ($15.8 billion) 0.5x 0.8x 1.3x

1 Capex excludes deferred turnaround and catalyst costs. 2 Based on ~572 million shares outstanding. 3 Based on the trailing twelve months to June 2011. 4 Based on 2006-10. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates. VALERO – CAPITAL SPENDING BUDGET (in millions)

Source: Company presentation dated August 9, 2011, available at http://bit.ly/nmeT5T



VALERO – ECONOMIC PROJECTS OFFER EARNINGS GROWTH POTENTIAL

GLOBAL SPARE REFINING CAPACITY, 1987–2010

U.S. AND GLOBAL PETROLEUM DEMAND, 1998–2012E

Source: Company presentation dated August 9, 2011, available at http://bit.ly/nmeT5T



Favorite Screens for Value Investors “Magic Formula,” Based on Trailing Operating Income Companies with high returns on capital employed, trading at high trailing EBIT-to-enterprise value yield

▼ ▼ Move To Trailing EBIT/ Price/ Insiders

Price 52-Week MV EV EV/ EBIT/ Capital Tax Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales EV Employed Rate Book Own. Sells

1 Unisys UIS 15.83 0% 161% 683 506 .1x 59% 1011% 40% n/m <1% 8 / 3

2 ITT Educational ESI 69.96 -29% 37% 1,891 1,735 1.1x 34% infinite 39% >9.9x <1% 9 / 3

3 Bridgepoint Edu. BPI 21.02 -39% 46% 1,104 816 1.0x 34% infinite 39% 3.7x <1% 6 / 6

4 DepoMed DEPO 5.00 -32% 108% 277 163 1.1x 34% infinite n/m 2.2x <1% 6 / 3

5 PDL BioPharma PDLI 5.78 -19% 16% 808 1,094 3.0x 31% infinite 36% n/m <1% 9 / -

6 Amerigroup AGP 43.78 -17% 73% 2,174 1,570 .3x 29% infinite 37% 2.2x 2% 19 / 14

7 Argan AGX 9.27 -20% 35% 126 47 .3x 31% 1108% 42% 1.6x 2% - / -

8 Tessera Technologies TSRA 13.01 -2% 78% 667 140 .5x 86% 339% 41% 1.2x <1% 6 / 2

9 Nova Measuring NVMI 6.26 -28% 88% 146 68 .6x 46% 363% n/m 1.6x <1% - / -

10 ePlus PLUS 23.31 -23% 30% 199 162 .2x 25% infinite 42% 1.0x 11% 8 / 6

11 Capella Education CPLA 30.29 -2% 174% 461 288 .7x 34% 335% 37% 2.4x 6% 10 / 1

12 Apollo Group APOL 44.93 -25% 21% 6,189 4,958 1.0x 26% 887% 58% 5.5x 3% 20 / 12

13 Career Education CECO 14.77 -2% 87% 1,127 739 .4x 45% 236% 34% 2.5x 2% 13 / 10

14 Dell DELL 14.00 -19% 26% 26,403 19,534 .3x 23% infinite 20% >9.9x 13% 20 / 12

15 * Ambassadors Group EPAX 6.37 0% 93% 113 23 .3x 23% infinite 26% 1.6x <1% 8 / 2

16 Cray CRAY 5.14 -4% 63% 187 55 .1x 60% 204% 6% 1.3x 5% 7 / 9

17 * General Motors GM 22.16 -2% 78% 33,253 22,896 .2x 26% 616% n/m n/m 3% 18 / 15

18 Veeco Instruments VECO 34.46 -12% 67% 1,415 839 .8x 37% 257% 10% 1.9x <1% 12 / 9

19 SuperGen SUPG 2.18 -10% 54% 202 77 1.3x 22% 8350% 1% 1.6x <1% 1 / -

20 Metropolitan Health MDF 4.77 -29% 27% 196 148 .4x 29% 286% 38% 2.6x 4% 10 / 5

21 * Korn/Ferry KFY 14.47 -12% 71% 681 414 .5x 21% infinite 36% 1.8x 1% 4 / 5

22 * Spirit Airlines SAVE 10.55 -3% 37% 765 516 .6x 21% infinite n/m 1.8x 2% 6 / 2

23 Power-One PWER 6.62 -1% 95% 687 601 .5x 54% 162% 37% 2.0x 3% 12 / 5

24 Global Sources GSOL 8.06 -19% 59% 272 138 .7x 20% infinite 5% 2.8x <1% - / -

25 H&R Block HRB 13.26 -24% 36% 4,053 3,453 .9x 20% infinite 38% >9.9x <1% 5 / 3

26 ViroPharma VPHM 17.51 -31% 27% 1,330 961 1.9x 23% 296% 38% 4.5x <1% 4 / 4

27 SanDisk SNDK 32.50 0% 65% 7,775 6,840 1.3x 22% 353% 13% 1.3x <1% 12 / 7

28 Almost Family AFAM 17.83 -5% 129% 167 113 .3x 38% 137% 40% 2.2x 10% 10 / 3

29 Forest Labs FRX 32.83 -17% 23% 9,014 6,669 1.5x 23% 265% 22% 3.2x <1% 1 / 6

30 United Online UNTD 4.92 -3% 52% 436 587 .6x 19% infinite 34% n/m 3% - / 6

31 Kulicke and Soffa KLIC 7.86 -33% 62% 571 339 .4x 62% 124% 7% 1.4x 2% 10 / 10

32 Smart Technologies SMT 4.42 -3% 236% 196 416 .5x 30% 145% 34% n/m <1% - / -

33 * Vista Gold Corp. VGZ 3.14 -43% 36% 224 189 n/m 34% 128% 37% 1.7x <1% 1 / 2

34 * Blue Coat Systems BCSI 12.54 -2% 157% 544 281 .6x 18% infinite 29% 3.1x <1% 6 / 4

35 Research In Motion RIMM 26.69 -19% 164% 13,994 11,605 .6x 39% 116% 26% 2.0x <1% - / -

36 * DeVry DV 39.46 -8% 69% 2,714 2,265 1.0x 22% 181% 33% 4.0x 2% 6 / 5

37 * USANA Health USNA 23.60 -2% 93% 372 372 .7x 20% 272% 34% >9.9x 52% 1 / 4

38 * Meredith MDP 23.63 0% 59% 868 1,036 .7x 22% 170% 38% n/m <1% 7 / 4

39 * LTX-Credence LTXC 5.72 -13% 72% 283 136 .5x 37% 111% n/m 1.6x 3% 3 / 7

40 * KLA-Tencor KLAC 33.67 -18% 54% 5,623 4,331 1.4x 27% 130% 28% 2.3x <1% 5 / 5

41 Teradyne TER 10.90 -19% 76% 2,029 1,277 .8x 31% 120% 4% 1.7x <1% 8 / 3

42 AmSurg AMSG 19.92 -18% 41% 623 891 1.2x 26% 127% 15% n/m 2% 11 / 6

43 * MIPS Technologies MIPS 4.32 -10% 321% 227 118 1.4x 17% infinite 18% 2.2x <1% 7 / 3

44 * Columbia Labs CBRX 2.18 -54% 98% 190 169 2.8x 17% infinite n/m >9.9x <1% 4 / 3

45 * Lam Research LRCX 35.99 -3% 64% 4,480 3,097 1.0x 26% 124% 10% 2.0x <1% 11 / 9

Company website SEC Y! Price Charts Proxy Y!

* New additions are highlighted. Screening criteria: ► Market value > $100 million ► ADRs and banks excluded ► China RTOs excluded



“Magic Formula,” Based on This Year’s EPS Estimates Companies with high returns on capital employed, trading at high earnings yields (based on this FY EPS estimates)

▼ ▼

Move To This FY EBIT/ Price to Insiders

Price 52-Week MV EV EV/ EPS Capital Tax Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales Yield Employed Rate Book Own. Sells

1 DepoMed DEPO 5.00 -32% 108% 277 163 1.1x 27% infinite n/m 2.2x <1% 6 / 3

2 * GT Solar GTAT 10.32 -36% 70% 1,306 935 .9x 17% infinite 34% 8.4x <1% 12 / 8

3 ITT Educational ESI 69.96 -29% 37% 1,891 1,735 1.1x 15% infinite 39% >9.9x <1% 9 / 3



6 Veeco Instruments VECO 34.46 -12% 67% 1,415 839 .8x 15% 257% 10% 1.9x <1% 12 / 9

7 Bridgepoint Edu. BPI 21.02 -39% 46% 1,104 816 1.0x 13% infinite 39% 3.7x <1% 6 / 6



10 SanDisk SNDK 32.50 0% 65% 7,775 6,840 1.3x 14% 353% 13% 1.3x <1% 12 / 7

11 ePlus PLUS 23.31 -23% 30% 199 162 .2x 13% infinite 42% 1.0x 11% 8 / 6

12 LTX-Credence LTXC 5.72 -13% 72% 283 136 .5x 20% 111% n/m 1.6x 3% 3 / 7

13 USANA Health USNA 23.60 -2% 93% 372 372 .7x 13% 272% 34% >9.9x 52% 1 / 4


15 Power-One PWER 6.62 -1% 95% 687 601 .5x 14% 162% 37% 2.0x 3% 12 / 5

16 PMC-Sierra PMCS 5.47 -4% 68% 1,278 1,084 1.7x 12% infinite 49% 3.7x <1% 13 / 9

17 Entropic Comms ENTR 3.61 -7% 287% 312 175 .7x 17% 103% n/m 1.1x <1% 7 / 5

18 Microsoft MSFT 24.05 -3% 22% 201,497 160,646 2.3x 12% 1870% 18% 4.6x 7% 7 / 4

19 Cisco Systems CSCO 15.08 -12% 63% 82,943 55,180 1.3x 11% infinite 17% 3.0x <1% 9 / 11


21 * Capella Education CPLA 30.29 -2% 174% 461 288 .7x 12% 335% 37% 2.4x 6% 10 / 1

22 * Neurocrine Bio NBIX 5.89 -10% 58% 325 210 4.0x 11% infinite n/m >9.9x 1% - / 6

23 Forest Labs FRX 32.83 -17% 23% 9,014 6,669 1.5x 11% 265% 22% 3.2x <1% 1 / 6

24 Teradyne TER 10.90 -19% 76% 2,029 1,277 .8x 12% 120% 4% 1.7x <1% 8 / 3

25 TRW Automotive TRW 35.41 -7% 79% 4,381 4,935 .3x 21% 70% 13% 6.7x 1% 14 / 9

26 Apollo Group APOL 44.93 -25% 21% 6,189 4,958 1.0x 11% 887% 58% 5.5x 3% 20 / 12

27 Marvell Technology MRVL 12.68 -11% 74% 7,753 5,353 1.5x 12% 166% 1% 2.7x <1% 2 / 3

28 KLA-Tencor KLAC 33.67 -18% 54% 5,623 4,331 1.4x 12% 130% 28% 2.3x <1% 5 / 5

29 Applied Materials AMAT 10.82 -5% 56% 14,264 11,161 1.0x 13% 101% 29% 2.2x <1% 18 / 11


31 * DeVry DV 39.46 -8% 69% 2,714 2,265 1.0x 11% 181% 33% 4.0x 2% 6 / 5

32 GameStop GME 21.57 -18% 33% 3,051 3,075 .3x 13% 89% 35% 3.4x <1% 3 / 5

33 * Medidata Solutions MDSO 14.53 -2% 89% 359 265 1.5x 10% infinite n/m 6.4x 10% 9 / 7

34 Qlogic QLGC 12.31 -1% 53% 1,280 880 1.5x 12% 107% 2% 2.6x <1% 7 / 7

35 Gilead Sciences GILD 37.20 -15% 17% 28,698 30,306 3.7x 11% 166% 24% 7.3x <1% 17 / 7

36 * WABCO Holdings WBC 40.29 -16% 86% 2,706 2,662 1.0x 12% 104% 7% >9.9x <1% 14 / 7


38 * Adobe Systems ADBE 22.69 0% 59% 11,206 10,099 2.5x 10% 916% 15% 9.3x <1% 10 / 4


40 * Brooks Automation BRKS 8.53 -36% 71% 564 366 .5x 17% 62% 3% 1.2x 1% 3 / 4

41 Intel INTC 19.19 -8% 25% 100,767 91,381 1.9x 12% 82% 27% 3.1x <1% 15 / 8

42 * Novellus Systems NVLS 26.24 -13% 59% 1,827 1,130 .7x 12% 80% 14% 2.0x <1% 10 / 5

43 * Oracle ORCL 24.78 -13% 47% 125,524 112,598 3.2x 10% infinite 25% >9.9x <1% 11 / 10

44 * Rubicon Technology RBCN 12.16 -12% 145% 280 197 1.5x 16% 61% 22% 1.2x <1% 2 / -

45 * Innospec IOSP 21.74 -49% 76% 516 446 .6x 16% 60% 5% 2.8x 2% 13 / 5


* New additions are highlighted. Criteria: ► MV > $100 million ► ADRs, banks excluded ► EV to MV < 1.5 ► China RTOs excluded



“Magic Formula,” Based on Next Year’s EPS Estimates Companies with high returns on capital employed, trading at high earnings yields (based on next FY EPS estimates)

▼ ▼

Move To Next FY EBIT/ Price to Insiders

Price 52-Week MV EV EV/ EPS Capital Tax Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales Yield Employed Rate Book Own. Sells

1 * GT Solar GTAT 10.32 -36% 70% 1,306 935 .9x 19% infinite 34% 8.4x <1% 12 / 8




5 LTX-Credence LTXC 5.72 -13% 72% 283 136 .5x 21% 111% n/m 1.6x 3% 3 / 7

6 SanDisk SNDK 32.50 0% 65% 7,775 6,840 1.3x 14% 353% 13% 1.3x <1% 12 / 7

7 Power-One PWER 6.62 -1% 95% 687 601 .5x 16% 162% 37% 2.0x 3% 12 / 5

8 USANA Health USNA 23.60 -2% 93% 372 372 .7x 14% 272% 34% >9.9x 52% 1 / 4


10 PMC-Sierra PMCS 5.47 -4% 68% 1,278 1,084 1.7x 14% infinite 49% 3.7x <1% 13 / 9


12 Microsoft MSFT 24.05 -3% 22% 201,497 160,646 2.3x 13% 1870% 18% 4.6x 7% 7 / 4

13 * ePlus PLUS 23.31 -23% 30% 199 162 .2x 13% infinite 42% 1.0x 11% 8 / 6

14 Jazz Pharmaceuticals JAZZ 34.40 -78% 27% 1,436 1,370 6.4x 13% infinite n/m >9.9x <1% 7 / -

15 Cisco Systems CSCO 15.08 -12% 63% 82,943 55,180 1.3x 13% infinite 17% 3.0x <1% 9 / 11

16 * Entropic Comms ENTR 3.61 -7% 287% 312 175 .7x 14% 103% n/m 1.1x <1% 7 / 5

17 * Bridgepoint Edu. BPI 21.02 -39% 46% 1,104 816 1.0x 12% infinite 39% 3.7x <1% 6 / 6

18 TRW Automotive TRW 35.41 -7% 79% 4,381 4,935 .3x 20% 70% 13% 6.7x 1% 14 / 9

19 GameStop GME 21.57 -18% 33% 3,051 3,075 .3x 14% 89% 35% 3.4x <1% 3 / 5

20 * WABCO Holdings WBC 40.29 -16% 86% 2,706 2,662 1.0x 14% 104% 7% >9.9x <1% 14 / 7

21 Teradyne TER 10.90 -19% 76% 2,029 1,277 .8x 13% 120% 4% 1.7x <1% 8 / 3

22 Marvell Technology MRVL 12.68 -11% 74% 7,753 5,353 1.5x 13% 166% 1% 2.7x <1% 2 / 3


24 SciClone Pharma SCLN 4.58 -48% 50% 267 221 2.2x 17% 67% 12% 5.3x <1% 6 / 3

25 KLA-Tencor KLAC 33.67 -18% 54% 5,623 4,331 1.4x 13% 130% 28% 2.3x <1% 5 / 5

26 Gilead Sciences GILD 37.20 -15% 17% 28,698 30,306 3.7x 12% 166% 24% 7.3x <1% 17 / 7

27 Qlogic QLGC 12.31 -1% 53% 1,280 880 1.5x 13% 107% 2% 2.6x <1% 7 / 7

28 * Innospec IOSP 21.74 -49% 76% 516 446 .6x 17% 60% 5% 2.8x 2% 13 / 5

29 Synaptics SYNA 23.21 -4% 39% 795 550 .9x 12% 139% 13% 2.4x <1% 4 / 1




33 * ITT Educational ESI 69.96 -29% 37% 1,891 1,735 1.1x 11% infinite 39% >9.9x <1% 9 / 3

34 * Magic Software MGIC 4.07 -45% 139% 137 90 .9x 11% 1008% 1% 2.9x <1% - / -

35 * DeVry DV 39.46 -8% 69% 2,714 2,265 1.0x 12% 181% 33% 4.0x 2% 6 / 5

36 * Adobe Systems ADBE 22.69 0% 59% 11,206 10,099 2.5x 11% 916% 15% 9.3x <1% 10 / 4

37 * AudioCodes Ltd. AUDC 3.73 -33% 116% 154 134 .8x 15% 64% n/m 2.1x <1% - / -

38 * Lear LEA 40.97 -14% 39% 4,256 3,182 .2x 14% 64% 10% 2.0x <1% 8 / 2

39 * Autoliv ALV 48.92 -1% 71% 4,367 4,501 .6x 15% 60% 23% 2.9x <1% 6 / 6

40 Aeropostale ARO 10.71 -3% 159% 865 792 .3x 13% 76% 41% 2.4x 1% 17 / 8

41 Intel INTC 19.19 -8% 25% 100,767 91,381 1.9x 13% 82% 27% 3.1x <1% 15 / 8

42 Lexmark LXK 28.46 -6% 69% 2,256 1,565 .4x 15% 59% 18% 1.7x 1% 19 / 10

43 * Freeport-McMoRan FCX 41.94 -22% 46% 39,754 38,918 1.7x 15% 60% 35% 2.8x <1% 14 / 4

44 * TransGlobe Energy TGA 8.70 -18% 133% 631 565 2.9x 17% 54% 57% 2.5x <1% - / -

45 Applied Materials AMAT 10.82 -5% 56% 14,264 11,161 1.0x 12% 101% 29% 2.2x <1% 18 / 11


* New additions are highlighted. Criteria: ► MV > $100 million ► ADRs, banks excluded ► EV to MV < 1.5 ► China RTOs excluded



Contrarian: Biggest YTD Losers (deleveraged & profitable) Non-financial companies with no net debt, positive analyst estimates for next year’s EPS, and large YTD price drop

▼

Price Change Since EV / Price to Next Insiders

Price MV EV December 31, TTM Tangible FY % Buys/ Company Ticker ($) ($mn) ($mn) 2004 2009 2010 Revenue Book P/E Own. Sells

1 Oclaro OCLR 3.26 165 102 -87% -56% -75% .2x .8x 8x 1% 8 / 6

2 MIPS Technologies MIPS 4.32 227 118 -56% -1% -72% 1.4x 2.2x 13x <1% 7 / 3

3 * THQ THQI 1.76 120 101 -88% -65% -71% .1x 2.4x 7x <1% 4 / 3

4 Entropic Comms ENTR 3.61 312 175 n/m 18% -70% .7x 1.1x 7x <1% 7 / 5

5 Monster Worldwide MWW 7.27 939 862 -78% -58% -69% .8x n/m 10x 3% 10 / 5

6 SIGA Technologies SIGA 5.04 259 244 204% -13% -64% 17.5x 6.2x 11x 2% 10 / 5

7 Axcelis Technologies ACLS 1.30 138 101 -84% -8% -62% .3x .6x 7x <1% - / 5

8 Rentrak RENT 11.57 130 106 -7% -35% -62% 1.1x 3.5x 17x 7% 11 / 4

9 * SupportSoft SPRT 2.63 128 68 -61% 0% -59% 1.3x 2.1x 38x <1% 4 / -

10 * K-Swiss KSWS 5.12 182 131 -82% -48% -59% .5x .9x 512x <1% 5 / 3

11 * Blue Coat Systems BCSI 12.54 544 281 35% -56% -58% .6x 3.1x 17x <1% 6 / 4

12 Winnebago WGO 6.43 187 122 -84% -47% -58% .2x 1.8x 15x <1% 17 / -

13 Voyager Oil & Gas VOG 2.31 134 117 -86% 122% -57% 35.4x 1.7x 14x 7% - / 1

14 Akamai Technologies AKAM 20.28 3,739 3,242 56% -20% -57% 3.0x 2.2x 12x <1% 3 / 2

15 Golden Minerals AUMN 11.58 177 91 n/m 19% -57% >99x 1.8x 12x 3% - / 4

16 * Aeropostale ARO 10.71 865 792 -18% -53% -57% .3x 2.4x 8x 1% 17 / 8

17 Citi Trends CTRN 10.80 162 112 n/m -61% -56% .2x .8x 13x 2% 11 / 6

18 Ixia XXIA 7.45 518 486 -56% 0% -56% 1.6x 2.4x 11x <1% 5 / 11

19 * Inphi Corp. IPHI 9.12 250 131 n/m n/m -55% 1.5x 1.6x 12x 4% 9 / 9

20 WMS Industries WMS 20.56 1,177 1,086 -8% -49% -55% 1.4x 1.7x 10x <1% 8 / 7

21 * Capella Education CPLA 30.29 461 288 n/m -60% -55% .7x 2.4x 10x 6% 10 / 1

22 Cree CREE 30.05 3,294 2,209 -25% -47% -54% 2.2x 1.8x 16x <1% 2 / 1

23 Almost Family AFAM 17.83 167 113 142% -55% -54% .3x 2.2x 8x 10% 10 / 3

24 Dolby Laboratories DLB 31.68 3,498 2,595 n/m -34% -53% 2.8x 2.7x 12x <1% 5 / 9

25 Xyratex XRTX 7.90 239 112 -52% -41% -52% .1x .7x 5x <1% - / -

26 * Applied Micro AMCC 5.19 334 192 -69% -31% -51% .8x 1.6x 9x <1% 14 / 7

27 * LG Display LPL 8.67 6,089 5,602 -52% -49% -51% .2x .6x 12x <1% - / -

28 MaxLinear MXL 5.26 172 81 n/m n/m -51% 1.2x 1.7x 22x <1% 7 / 7

29 * Logitech LOGI 9.08 1,700 1,224 -40% -47% -51% .5x 3.0x 11x <1% - / -

30 * STEC STEC 8.71 450 236 89% -47% -51% .7x 1.3x 10x <1% 2 / -

31 * Thompson Creek TC 7.35 1,234 1,043 n/m -37% -50% 1.5x .7x 11x <1% 1 / -

32 hhgregg HGG 10.48 401 399 n/m -52% -50% .2x 1.4x 8x <1% 1 / 1

33 * Intevac IVAC 7.02 161 86 -7% -39% -50% .6x .9x 22x <1% 1 / 4

34 Finisar Corp. FNSR 15.02 1,351 1,076 -18% 68% -49% 1.1x 2.0x 10x 2% 13 / 7

35 * Enzo Biochem ENZ 2.68 103 76 -86% -50% -49% .8x 2.3x 134x 1% 4 / -

36 * Cameco CCJ 20.73 8,194 8,000 19% -36% -49% 4.0x 1.8x 14x <1% - / -

37 * Move MOVE 1.32 211 170 -56% -20% -49% .9x 3.9x 13x 2% 9 / 2

38 * Orion Marine ORN 5.98 160 135 n/m -72% -48% .4x .8x 66x <1% 3 / -

39 * AOL AOL 12.24 1,309 971 n/m -47% -48% .4x 1.2x 29x <1% 7 / -

40 * Ultra Clean UCTT 4.90 112 100 -19% -30% -47% .2x 1.2x 5x 5% 9 / 4

41 Uranium Energy UEC 3.18 234 200 n/m -16% -47% >99x 3.9x 19x 2% - / -

42 * ValueVision Media VVTV 3.22 155 142 -77% -33% -47% .2x 1.8x 10x 5% 15 / 4

43 NetScout Systems NTCT 12.13 519 401 74% -17% -47% 1.4x 4.0x 10x <1% 5 / 5

44 * Resources Connection RECN 9.80 446 301 -64% -54% -47% .6x 2.4x 14x <1% 2 / 1

45 * Palomar Medical PMTI 7.50 146 63 -71% -26% -47% 1.0x 1.0x 75x 2% 1 / 1

Company website SEC Y! Stock Price Charts Proxy Y!

* New additions are highlighted. Criteria: ► Positive net cash ► Positive next FY EPS ► MV > $100 million ► China RTOs excluded



Value with Catalyst: Cheap Repurchasers of Stock Companies that may be creating value by reducing their shares outstanding at relatively cheap prices

▼

Q-Q EV / Next Price to Net Cash Insiders

Price MV EV Change TTM FY Tangible as % of % Buys/ Company Ticker ($) ($mn) ($mn) in Shares Revenue P/E Book MV Own. Sells

1 * Novellus Systems NVLS 26.24 1,827 1,130 -11.3% .7x 8x 2.0x 38% <1% 10 / 5

2 * Franklin Financial FRNK 11.25 161 n/m -7.9% n/m - .6x n/m 3% 12 / -

3 * Bank of East Asia BKEAY 3.63 7,740 n/m -7.4% n/m 13x 1.4x n/m <1% - / -

4 Plexus Corp. PLXS 24.42 865 949 -7.3% .4x 9x 1.5x -10% <1% 6 / 6

5 Gap GPS 15.69 8,636 8,103 -7.0% .6x 9x 15.3x 6% 2% 13 / 7

6 J.C. Penney JCP 24.38 5,198 6,746 -6.9% .4x 11x 1.1x -30% <1% 16 / 6

7 * Stage Stores SSI 13.18 460 490 -5.6% .3x 10x 1.1x -7% 2% 14 / 6

8 ITT Educational ESI 69.96 1,891 1,735 -5.6% 1.1x 9x 21.9x 8% <1% 9 / 3

9 * Multimedia Games MGAM 4.24 113 108 -5.4% .9x 21x 1.3x 5% 4% 1 / 1

10 Eastern Insurance EIHI 12.72 103 n/m -5.4% n/m 18x .9x n/m 1% 1 / -

11 * Magellan Health MGLN 44.31 1,365 1,057 -5.3% .4x 11x 2.8x 23% <1% 16 / 8

12 Torchmark TMK 35.24 3,703 n/m -5.0% n/m 7x 1.1x n/m 1% 18 / 16

13 * Hewlett-Packard HPQ 23.60 48,950 61,693 -4.5% .5x 4x n/m -26% <1% 11 / 3

14 Kohl’s KSS 45.12 12,683 13,295 -4.2% .7x 9x 1.8x -5% 1% 17 / 5

15 * Arctic Cat ACAT 12.54 228 103 -4.1% .2x 11x 1.3x 55% 4% 14 / -

16 * Northwest Bancorp NWBI 10.95 1,131 n/m -4.1% n/m 15x 1.1x n/m <1% 17 / 1

17 * Nordion NDZ 8.41 543 526 -3.8% 1.9x - 1.6x 3% <1% - / -

18 DIRECTV DTV 41.93 30,956 41,890 -3.8% 1.6x 10x n/m -35% <1% 12 / 8

19 * Flextronics FLEX 5.15 3,767 4,423 -3.8% .1x 5x 1.9x -17% <1% - / -

20 * Capella Education CPLA 30.29 461 288 -3.6% .7x 10x 2.4x 37% 6% 10 / 1

21 * STMicroelectronics STM 6.14 5,549 4,487 -3.6% .4x 7x .9x 19% <1% - / -

22 FPIC Insurance FPIC 41.65 350 n/m -3.5% n/m 16x 1.5x n/m 6% 12 / 6

23 Assurant AIZ 32.76 3,095 n/m -3.4% n/m 6x .8x n/m 1% 20 / 11

24 * Tech Data TECD 41.36 1,920 1,502 -3.4% .1x 7x .9x 22% 1% 16 / 15

25 * LSI Corp. LSI 6.29 3,603 2,697 -3.3% 1.3x 10x 4.9x 25% <1% 13 / 5

26 * RF Micro Devices RFMD 5.01 1,385 1,288 -3.3% 1.3x 8x 2.7x 7% 3% 14 / 8

27 * Northrop Grumman NOC 49.26 13,697 14,866 -3.2% .5x 7x n/m -9% <1% 23 / 9

28 SAIC SAI 13.60 4,804 5,373 -3.1% .5x 9x 9.0x -12% <1% 15 / 7

29 Health Net HNT 21.47 1,913 n/m -2.9% n/m 7x 2.2x n/m 2% 11 / 11

30 Intel INTC 19.19 100,767 91,381 -2.9% 1.9x 8x 3.1x 9% <1% 15 / 8

31 * Activision Blizzard ATVI 10.67 12,194 9,250 -2.7% 1.9x 11x 4.6x 24% <1% 6 / 4

32 * Plantronics PLT 30.80 1,438 1,109 -2.7% 1.6x 10x 2.6x 23% <1% 13 / 7

33 * Vishay Intertech VSH 9.97 1,567 982 -2.7% .4x 5x 1.0x 37% <1% 5 / 3

34 * Dell DELL 14.00 26,403 19,534 -2.6% .3x 7x 25.8x 26% 13% 20 / 12

35 * Hyatt Hotels H 31.01 5,121 4,493 -2.5% 1.2x 32x 1.2x 12% <1% 12 / 7

36 * Amdocs DOX 25.97 5,014 3,880 -2.4% 1.2x 10x 3.8x 23% <1% - / -

37 * Territorial Bancorp TBNK 19.32 224 n/m -2.4% n/m 16x 1.0x n/m <1% - / -

38 * WMS Industries WMS 20.56 1,177 1,086 -2.4% 1.4x 10x 1.7x 8% <1% 8 / 7

39 * Synopsys SNPS 23.39 3,431 2,393 -2.4% 1.6x 12x 5.2x 30% <1% 11 / 4

40 RadioShack RSH 11.67 1,164 1,274 -2.4% .3x 6x 1.5x -9% <1% 7 / 8

41 * McKesson MCK 0.00 18,190 19,063 -2.4% .2x 11x 20.0x -5% <1% 11 / 10

42 * Navigators Group NAVG 0.00 598 n/m -2.4% n/m 14x .7x n/m 1% 18 / 2

43 Comtech Telecomm. CMTL 0.00 656 267 -2.3% .4x 23x 1.3x 59% 2% 7 / 4

44 * StanCorp Financial SFG 0.00 1,271 n/m -2.3% n/m 7x .7x n/m <1% 11 / 6

45 * ConocoPhillips COP 0.00 87,311 102,367 -2.3% .4x 7x 1.3x -17% <1% 1 / 1

Company website SEC Y! Proxy Y!

* New additions are highlighted. Criteria: ► MV < 2 * BV ► Next FY P/E < 12 ► Debt/equity < 0.4 ► MV > $100mn ► Q-Q shares < 0



Profitable Dividend Payors with Decent Balance Sheets Dividend-paying companies with no net debt and EPS estimates in excess of 75% of the indicated annual dividend

▼

Move To Dividend Yield Est. P/E Price to Insiders

Price 52-Week MV EV Last 12 Annual This Next Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Months Indicated FY FY Book Own. Sells

1 Invesco Mortgage IVR 17.02 -3% 41% 1,964 1,964 23% 23% 4x 4x 1.1x <1% 8 / 4

2 Cypress Sharpridge CYS 12.90 -8% 10% 1,065 1,064 19% 19% 6x 6x 1.0x <1% 6 / -

3 PennyMac Mortgage PMT 16.25 -6% 19% 452 n/m 7% 12% 8x 7x .9x 3% 16 / -

4 TICC Capital TICC 8.57 -10% 53% 280 n/m 11% 12% 9x 8x .9x 1% 1 / -

5 BGC Partners BGCP 5.96 -18% 69% 743 n/m 10% 11% 8x 7x 2.7x 14% 5 / 4

6 Crexus Investment CXS 9.16 -3% 47% 702 n/m 9% 11% 10x 8x .8x <1% 7 / -

7 Mesabi Trust MSB 22.94 -12% 153% 301 n/m 11% 10% 10x 8x >9.9x <1% - / -

8 THL Credit TCRD 10.98 -5% 35% 222 n/m 7% 9% 11x 8x .8x <1% 9 / 1

9 Gladstone Investment GAIN 6.65 -17% 29% 147 n/m 8% 9% 11x 10x .7x <1% 5 / 1

10 Ellington Financial EFC 18.29 -4% 37% 302 268 16% 9% 9x 6x .8x 8% 2 / -

11 Societe Generale SCGLY 5.94 -4% 140% 23,210 n/m 8% 9% 5x 3x .4x <1% - / -

12 * Colony Financial CLNY 15.13 -2% 42% 498 n/m 8% 8% 10x 7x .8x <1% 4 / -

13 Himax Tech HIMX 1.42 -13% 89% 251 204 35% 8% 13x 8x .7x <1% - / -

14 Banco Macro BMA 26.39 0% 116% 1,655 n/m 8% 8% 6x 5x 3.3x <1% - / -

15 Santander Brasil BSBR 8.77 -7% 79% 34,956 n/m 9% 8% 9x 7x 1.3x <1% - / -

16 Westpac Banking WBK 101.61 -10% 36% 61,913 n/m 8% 8% 9x 9x 2.0x <1% - / -

17 City Telecom CTEL 9.70 -3% 68% 386 342 8% 8% 13x 9x 1.7x <1% - / -

18 Nat’l Australia Bank NABZY 23.20 -15% 30% 51,204 n/m 7% 7% 9x 8x 1.5x <1% - / -

19 Telecom Argentina TEO 22.58 -17% 21% 2,129 1,831 10% 7% 8x 7x 1.3x <1% - / -

20 Siliconware SPIL 3.93 0% 85% 2,534 2,240 11% 7% 14x 10x 1.3x <1% - / -

21 Australia and NZ ANZBY 20.10 -10% 33% 53,237 n/m 7% 7% 9x 8x 1.8x <1% - / -

22 * AXA AXAHY 14.60 -6% 59% 34,184 n/m 7% 7% 9x 4x 1.0x <1% - / -

23 Banco Argentaria BBVA 8.66 -7% 60% 41,468 n/m 4% 7% 7x 6x 1.1x <1% - / -

24 Chatham Lodging CLDT 10.42 0% 87% 144 125 5% 7% 25x 11x .6x 4% 3 / 1

25 Mercury General MCY 36.18 -7% 25% 1,984 n/m 7% 7% 13x 13x 1.1x <1% 2 / 1

26 TrustCo Bank Corp NY TRST 3.95 -1% 69% 368 n/m 7% 7% 11x 9x 1.4x 2% 13 / 1

27 United Bankshares UBSI 19.64 0% 57% 986 n/m 6% 6% 12x 11x 2.0x 2% 4 / 2

28 * AstraZeneca AZN 44.95 -9% 19% 61,011 59,824 6% 6% 6x 7x >9.9x <1% - / -

29 People’s United PBCT 10.56 0% 37% 3,976 n/m 6% 6% 16x 12x 1.2x <1% 11 / 7

30 * American Software AMSWA 6.13 -22% 46% 161 116 6% 6% 16x 14x 3.1x 2% 7 / 1

31 * Sun Life Financial SLF 25.62 -14% 35% 14,863 n/m 6% 6% 8x 8x 1.6x <1% - / -

32 NutriSystem NTRI 12.13 -6% 87% 339 303 6% 6% 18x 11x 4.4x 4% 9 / 3

33 * CTC Media CTCM 15.32 -3% 64% 2,410 2,280 5% 6% 13x 10x 9.6x <1% 4 / 4

34 * Credit Suisse CS 26.19 0% 82% 31,676 n/m 6% 6% 6x 5x 1.0x <1% - / -

35 * DDi Corp. DDIC 7.14 -2% 73% 145 130 5% 6% 6x 6x 1.6x 1% 2 / 3

36 Chunghwa Telecom CHT 34.02 -28% 10% 26,219 23,602 6% 6% 18x 18x 2.1x <1% - / -

37 Renasant RNST 12.25 -1% 48% 307 n/m 6% 6% 12x 10x 1.1x <1% 4 / -

38 Electro Rent ELRC 14.64 -24% 23% 351 310 4% 5% 14x 12x 1.5x <1% - / -

39 World Wrestling Ent. WWE 8.82 -1% 69% 656 489 14% 5% 14x 11x 2.1x 2% 8 / 11

40 Safety Insurance SAFT 37.59 0% 33% 571 n/m 5% 5% 24x 12x .9x 6% 12 / 8

41 * Reed Elsevier ENL 22.14 -4% 26% 17,615 17,613 5% 5% 9x 9x >9.9x <1% - / -

42 * Greenhill & Co. GHL 34.34 0% 146% 1,000 n/m 5% 5% 20x 13x 6.9x <1% 3 / -

43 * Garmin GRMN 31.00 -16% 17% 6,017 4,535 6% 5% 15x 14x 2.2x <1% - / -

44 * United Overseas Bank UOVEY 30.95 -16% 13% 23,968 n/m 215% 5% 12x 11x 1.6x <1% - / -

45 PetMed Express PETS 9.88 -5% 91% 208 148 5% 5% 14x 14x 2.4x 1% 5 / -


* New additions are highlighted. Criteria: ► Positive net cash ► Positive EPS for this/next FY ► MV > $100 million ► China RTOs excl.



Deep Value: Lots of Revenue, Low Enterprise Value Companies that trade at low multiples of net revenue

▼

Move To Est. P/E Annual Price to Insiders

Price 52-Week MV EV EV/ This Next Dividend Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales FY FY Yield Book Own. Sells

1 Ingram Micro IM 16.24 -9% 33% 2,615 1,891 .05x 9x 7x - .8x 1% 11 / 13

2 Tech Data TECD 41.36 -15% 31% 1,920 1,502 .06x 8x 7x - .9x 1% 16 / 15

3 World Fuel Services INT 31.65 -24% 33% 2,251 2,285 .09x 12x 11x .5% 2.9x 3% 13 / 11

4 Kelly Services KELYA 13.65 -26% 68% 505 513 .10x 10x 8x 1.5% .9x 3% 18 / 8

5 Office Depot ODP 2.23 0% 180% 625 1,339 .12x n/m 15x - 1.0x <1% 15 / 6

6 AmerisourceBergen ABC 37.54 -28% 16% 10,108 9,470 .12x 15x 13x 1.2% >9.9x <1% 9 / 9

7 SYNNEX SNX 23.20 -3% 58% 847 1,160 .12x 6x 6x - 1.0x 18% 8 / 5

8 Sunoco SUN 33.98 -19% 38% 4,116 5,118 .12x 72x 15x 1.8% 1.5x <1% 7 / 4

9 Barnes & Noble BKS 9.98 -15% 111% 601 854 .12x n/m 20x - n/m 4% 11 / 9

10 Celestica CLS 7.22 0% 73% 1,427 919 .13x - - - 1.1x <1% - / -

11 Unisys UIS 15.83 0% 161% 683 506 .13x 12x 5x - n/m <1% 8 / 3

12 Valero Energy VLO 18.82 -18% 65% 10,768 14,284 .14x 5x 5x 1.1% .7x <1% 10 / 9

13 Cardinal Health CAH 39.98 -26% 18% 14,017 14,589 .14x 13x 11x 2.2% 8.8x <1% 9 / 10

14 Insight Enterprises NSIT 15.68 -21% 25% 710 738 .14x 8x 7x - 1.4x 1% 15 / 11

15 Flextronics FLEX 5.15 -6% 65% 3,767 4,423 .15x 6x 5x - 1.9x <1% - / -

16 Manpower MAN 36.03 0% 93% 2,952 3,167 .15x 11x 8x 2.2% 2.4x <1% 2 / 4

17 Brightpoint CELL 7.92 -26% 67% 540 662 .15x 8x 7x - 6.1x 1% 3 / 6

18 Tesoro TSO 19.16 -44% 50% 2,757 3,873 .15x 5x 5x - .8x <1% 4 / 8

19 General Motors GM 22.16 -2% 78% 33,253 22,896 .16x 5x 5x - n/m 3% 18 / 15

20 McKesson MCK 73.85 -22% 18% 18,190 19,063 .17x 12x 11x 1.1% >9.9x <1% 11 / 10

21 Sony SNE 20.53 0% 80% 20,928 15,482 .17x 18x 10x 1.5% 1.0x <1% - / -

22 Insperity NSP 23.54 -14% 38% 623 320 .17x 19x 14x 2.5% 2.8x 3% 11 / 7

23 Avnet AVT 24.75 -10% 54% 3,782 4,623 .17x 6x 6x - 1.2x <1% 10 / 11

24 Best Buy BBY 24.06 -3% 90% 8,996 8,948 .18x 7x 6x 2.7% 2.6x <1% 19 / 3

25 Sanmina-SCI SANM 7.23 0% 140% 583 1,213 .18x 5x 4x - .8x <1% - / -

26 Benchmark Electron. BHE 12.52 -2% 62% 746 451 .19x 10x 8x - .7x 1% 10 / 1

27 * Tellabs TLAB 3.69 0% 119% 1,346 288 .19x n/m >99x 2.2% .9x <1% 18 / 11

28 Marathon Petroleum MPC 34.99 -16% 36% 12,474 14,126 .20x 5x 6x 2.3% 1.5x <1% 23 / 2

29 Sears Holdings SHLD 52.55 -1% 80% 5,618 8,599 .20x n/m n/m - 1.6x <1% 1 / 2

30 Eastman Kodak EK 3.04 -42% 96% 818 1,312 .20x n/m n/m - n/m <1% 11 / -

31 * Jabil Circuit JBL 14.22 -28% 62% 3,109 3,385 .21x 6x 6x 2.0% 1.7x 4% 9 / 5

32 Owens & Minor OMI 27.16 -5% 31% 1,732 1,785 .21x 14x 12x 2.9% 2.8x 2% 15 / 11

33 EMCOR Group EME 20.80 0% 57% 1,392 1,139 .21x 11x 9x - 5.4x 2% 10 / 8

34 Supervalu SVU 6.80 -3% 83% 1,443 7,957 .21x 5x 5x 5.1% n/m <1% 12 / 3

35 BJ’s Wholesale Club BJ 49.94 -19% 5% 2,731 2,480 .22x 17x 16x - 2.2x 1% 10 / 9

36 * Delek US Holdings DK 13.28 -53% 32% 770 1,081 .22x 6x 7x 1.1% 1.6x <1% 6 / 1

37 US Airways LCC 5.14 -4% 139% 833 2,928 .23x 47x 4x - n/m <1% 1 / -

38 * Arrow Electronics ARW 28.87 -22% 65% 3,318 4,902 .24x 6x 5x - 1.5x <1% 8 / 8

39 * Magna International MGA 33.58 -1% 85% 8,130 6,532 .24x - - 3.0% 1.1x <1% - / -

40 * Lear LEA 40.97 -14% 39% 4,256 3,182 .24x 8x 7x 1.2% 2.0x <1% 8 / 2

41 * LG Display LPL 8.67 -2% 118% 6,089 5,602 .24x n/m 12x 2.7% .6x <1% - / -

42 Kroger KR 22.71 -13% 14% 13,742 20,691 .24x 11x 10x 1.8% 3.4x <1% 27 / 15

43 Tyson Foods TSN 16.63 -12% 21% 6,241 7,716 .25x 9x 8x 1.0% 1.7x <1% 6 / 5

44 * Centene CNC 28.62 -30% 37% 1,440 1,226 .25x 13x 11x - 2.6x 6% 15 / 13

45 * Safeway SWY 17.09 0% 49% 5,982 10,794 .26x 10x 9x 3.4% 1.4x <1% 12 / 11


* New additions are highlighted. Criteria: ► EV to TTM revenue < 0.5x ► MV < revenue ► MV > $500 million ► China RTOs excluded



Deep Value: Neglected Gross Profiteers Companies that trade at low multiples of gross profit

▼

Move To Enterprise Value / Est. P/E Price/ Insiders

Price 52-Week MV EV Gross This Next Tang. % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales Profit EBIT FY FY Book Own. Sells

1 Imation IMN 6.79 -1% 82% 261 3 .00x .02x n/m n/m n/m .6x 22% 15 / 8

2 Winn-Dixie Stores WINN 6.06 -2% 66% 338 209 .03x .1x n/m n/m n/m .5x <1% 1 / 2

3 Molina Healthcare MOH 17.76 -10% 63% 818 169 .04x .2x 1.3x 11x 10x 1.8x 4% 10 / 9

4 Charming Shoppes CHRS 2.65 -3% 86% 308 268 .1x .3x n/m 13x 9x 1.3x 1% 10 / 6

5 American Equity AEL 9.24 -1% 51% 551 406 .3x .3x .3x 5x 4x .6x 5% 9 / 3

6 Office Depot ODP 2.23 0% 180% 625 1,339 .1x .4x n/m n/m 15x 1.0x <1% 15 / 6

7 Investment Tech ITG 10.64 -5% 87% 436 213 .4x .4x n/m 15x 9x 1.5x 3% 17 / 9

8 * WellCare WCG 40.49 -40% 38% 1,730 474 .1x .5x 1.3x 8x 10x 2.1x <1% 6 / 10

9 Kindred Healthcare KND 12.90 -16% 125% 672 2,002 .4x .5x 20.7x 7x 7x n/m 2% 4 / 12

10 Barnes & Noble BKS 9.98 -15% 111% 601 854 .1x .5x n/m n/m 20x n/m 4% 11 / 9

11 Xyratex XRTX 7.90 -3% 124% 239 112 .1x .5x 2.3x 9x 5x .7x <1% - / -

12 * Career Education CECO 14.77 -2% 87% 1,127 739 .4x .5x 2.9x 6x 8x 2.5x 2% 13 / 10

13 * First American FAF 14.20 -12% 22% 1,496 1,181 .3x .5x 1.1x 20x 12x 1.3x 1% 16 / 5

14 Unisys UIS 15.83 0% 161% 683 506 .1x .5x 1.7x 12x 5x n/m <1% 8 / 3

15 Celadon Group CGI 10.26 -3% 64% 231 225 .4x .5x 11.4x 11x 9x 1.5x <1% 2 / 2

16 Telecom Argentina TEO 22.58 -17% 21% 2,129 1,831 .5x .6x 2.1x 8x 7x 1.3x <1% - / -

17 * Stein Mart SMRT 6.10 -1% 80% 274 173 .1x .6x 3.7x 9x 8x 1.0x 2% 9 / 6

18 US Airways LCC 5.14 -4% 139% 833 2,928 .2x .6x 5.2x 47x 4x n/m <1% 1 / -

19 Haverty Furniture HVT 10.50 -9% 34% 232 178 .3x .6x 45.7x 34x 17x .9x 3% 14 / 10

20 * Lincoln Educational LINC 9.43 -1% 111% 213 220 .4x .6x 2.2x 9x 13x 1.6x 5% 14 / 6

21 Kelly Services KELYA 13.65 -26% 68% 505 513 .1x .6x 9.5x 10x 8x .9x 3% 18 / 8

22 Humana HUM 69.76 -32% 21% 11,638 4,342 .1x .6x 2.0x 9x 9x 2.5x <1% 11 / 12

23 MedCath MDTH 12.77 -43% 17% 261 154 .5x .6x n/m 71x 75x .8x <1% - / 7

24 * Sierra Wireless SWIR 7.24 -2% 128% 228 110 .2x .6x n/m - - 1.7x <1% - / -

25 PC Connection PCCC 7.89 -22% 26% 211 158 .1x .6x 3.4x 8x 7x 1.0x 1% 2 / 2

26 hhgregg HGG 10.48 -15% 155% 401 399 .2x .6x 5.1x 9x 8x 1.4x <1% 1 / 1

27 Rosetta Stone RST 11.95 0% 105% 252 137 .5x .6x n/m n/m 41x 2.1x <1% - / 1

28 * IDT Corp. IDT 18.80 -29% 62% 432 196 .1x .7x 5.9x 14x 16x 2.2x 13% 2 / 4

29 * New York & Co. NWY 3.35 -50% 124% 208 176 .2x .7x n/m >99x 10x 2.0x 2% 10 / 1

30 * ArcelorMittal MT 19.56 0% 99% 30,778 55,870 .6x .7x 10.9x 7x 5x .6x <1% - / -

31 RadioShack RSH 11.67 -1% 100% 1,164 1,274 .3x .7x 4.4x 7x 6x 1.5x <1% 7 / 8

32 * Fred’s FRED 10.56 -2% 40% 416 367 .2x .7x 7.5x 13x 11x 1.0x 2% 36 / 28

33 Brown Shoe BWS 7.16 -2% 120% 319 703 .3x .7x 11.0x 6x 5x 1.3x 4% 18 / 9

34 Best Buy BBY 24.06 -3% 90% 8,996 8,948 .2x .7x 4.3x 7x 6x 2.6x <1% 19 / 3

35 Blyth BTH 52.92 -43% 27% 436 355 .4x .7x 8.3x - - 1.9x 32% 8 / 4

36 * P.F. Chang’s PFCB 27.95 -1% 91% 624 677 .5x .7x 11.3x 17x 15x 2.0x 1% 10 / 2

37 Nature’s Sunshine NATR 18.22 -58% 16% 284 214 .6x .7x 9.2x 15x 14x 3.4x <1% 2 / 2

38 * Systemax SYX 12.81 -9% 33% 466 378 .1x .7x 5.2x 8x 7x 1.2x 3% 4 / 1

39 Sony SNE 20.53 0% 80% 20,928 15,482 .2x .7x 7.9x 18x 10x 1.0x <1% - / -

40 Coca-Cola FEMSA KOF 93.64 -24% 7% 2,548 2,984 .3x .7x 2.3x 18x 16x .4x <1% - / -

41 Sears Holdings SHLD 52.55 -1% 80% 5,618 8,599 .2x .7x 429.9x n/m n/m 1.6x <1% 1 / 2

42 * Blue Coat Systems BCSI 12.54 -2% 157% 544 281 .6x .8x 5.5x 20x 17x 3.1x <1% 6 / 4

43 * Orbotech ORBK 10.33 -11% 51% 366 181 .3x .8x 2.7x 7x 7x .9x <1% - / -

44 * American Greetings AM 18.25 -2% 36% 691 713 .4x .8x 4.1x 7x 6x .9x 1% 18 / 13

45 Skechers SKX 14.44 -8% 102% 720 607 .3x .8x 26.0x n/m 13x .8x <1% 2 / 3


* New additions are highlighted. Criteria: ► EV < TTM gross profit ► MV < 2x gross profit ► MV > $200 million ► China RTOs excluded



Activist Targets: Potential Sales, Liquidations or Recaps Companies that may unlock value through a corporate event

▼

Move To Price to Next Insiders

Price 52-Week MV EV Tangible Net Cash NCAV EV/ FY % Buys/ Company Ticker ($) Low High ($mn) ($mn) Book (% of MV) (% of MV) Sales P/E Own. Sells

1 Imation IMN 6.79 -1% 82% 261 3 .6x 99% 131% .0x n/m 22% 15 / 8

2 Crexus Investment CXS 9.16 -3% 47% 702 (196) .8x 128% 128% n/m 8x <1% 7 / -

3 Opnext OPXT 1.40 -11% 218% 126 75 .6x 41% 127% .2x 70x <1% 6 / 8

4 Xyratex XRTX 7.90 -3% 124% 239 112 .7x 53% 117% .1x 5x <1% - / -

5 Axcelis Technologies ACLS 1.30 -4% 190% 138 101 .6x 27% 116% .3x 7x <1% - / 5

6 PennyMac Mortgage PMT 16.25 -6% 19% 452 (348) .9x 177% 116% n/m 7x 3% 16 / -

7 Benchmark Electron. BHE 12.52 -2% 62% 746 451 .7x 40% 115% .2x 8x 1% 10 / 1

8 Kimball KBALB 5.12 -6% 54% 140 89 .4x 37% 112% .1x - <1% - / 1

9 Maxygen MAXY 5.28 -41% 7% 157 (19) .9x 112% 111% n/m - 2% 6 / 1

10 Ingram Micro IM 16.24 -9% 33% 2,615 1,891 .8x 28% 110% .1x 7x 1% 11 / 13

11 Movado MOV 11.12 -15% 62% 276 167 .7x 40% 109% .4x 14x 5% 14 / 4

12 Force Protection FRPT 3.50 -7% 71% 245 96 .8x 61% 103% .2x 8x 2% 12 / 5

13 ModusLink MLNK 3.86 -9% 93% 169 50 .7x 70% 101% .1x - 1% 3 / 1

14 BigBand Networks BBND 1.46 -2% 125% 103 (25) .9x 124% 100% n/m n/m 1% 12 / 6

15 * West Marine WMAR 8.10 -1% 66% 184 172 .7x 7% 99% .3x 9x <1% 9 / 2

16 Callaway Golf ELY 5.21 0% 63% 337 270 .7x 20% 97% .3x 20x 1% 9 / 3

17 * Orbotech ORBK 10.33 -11% 51% 366 181 .9x 50% 95% .3x 7x <1% - / -

18 Rimage RIMG 13.21 -4% 38% 125 6 1.0x 95% 94% .1x 18x 1% 9 / 3

19 Tech Data TECD 41.36 -15% 31% 1,920 1,502 .9x 22% 91% .1x 7x 1% 16 / 15

20 PC Connection PCCC 7.89 -22% 26% 211 158 1.0x 25% 90% .1x 7x 1% 2 / 2

21 * Aviat Networks AVNW 2.79 -4% 133% 169 88 .9x 48% 89% .2x 13x 1% 2 / 5

22 SemiLEDs LEDS 4.36 -5% 637% 119 35 .7x 71% 88% .9x n/m <1% 2 / -

23 * K-Swiss KSWS 5.12 -2% 158% 182 131 .9x 28% 88% .5x >99x <1% 5 / 3

24 CSS Industries CSS 15.72 -5% 37% 153 149 .9x 3% 88% .3x - <1% - / -

25 FormFactor FORM 7.64 -10% 45% 389 64 1.0x 83% 87% .4x n/m <1% 5 / 4

26 Tellabs TLAB 3.69 0% 119% 1,346 288 .9x 79% 87% .2x >99x <1% 18 / 11

27 Sycamore Networks SCMR 16.50 -2% 108% 473 65 1.1x 86% 87% 1.1x n/m <1% 3 / 3

28 Richardson Electron. RELL 13.45 -37% 14% 232 9 1.0x 96% 86% .1x 24x <1% 5 / 4

29 Cutera CUTR 7.48 -7% 33% 104 13 1.1x 88% 84% .2x n/m 7% 8 / 3

30 Oplink Comms OPLK 14.24 -6% 107% 294 107 1.0x 63% 82% .5x 7x 2% 7 / 8

31 Hardinge HDNG 9.42 -21% 49% 110 102 .7x 7% 82% .3x 10x 3% 7 / 3

32 QLT QLTI 6.16 -13% 44% 309 108 .9x 65% 81% 2.7x - <1% 3 / -

33 EXFO Electro-Optical EXFO 5.90 -16% 124% 169 98 .8x 42% 80% .4x - <1% - / -

34 Bel Fuse BELFA 17.24 -1% 64% 189 89 .9x 53% 80% .3x - 14% - / -

35 * Rudolph Tech RTEC 6.85 -6% 86% 218 125 1.2x 43% 79% .6x 7x 5% 19 / 10

36 Exar EXAR 5.72 -6% 27% 256 54 1.1x 79% 79% .4x 14x <1% 2 / 9

37 NeoPhotonics NPTN 6.08 -9% 244% 151 87 .8x 42% 78% .4x 25x <1% 1 / -

38 * Enstar Group ESGR 91.56 -27% 25% 1,324 (2,054) 1.2x 255% 78% n/m 8x <1% 1 / 1

39 * Tessera Technologies TSRA 13.01 -2% 78% 667 140 1.2x 79% 77% .5x 12x <1% 6 / 2

40 Westell Technologies WSTL 2.41 -35% 63% 166 59 1.0x 65% 76% .3x 10x 4% 13 / 9

41 InfoSpace INSP 8.83 -25% 11% 337 74 1.3x 78% 76% .3x 18x 1% 7 / 6

42 * Ultra Clean UCTT 4.90 -1% 178% 112 100 1.2x 10% 75% .2x 5x 5% 9 / 4

43 * Pacific Biosciences PACB 5.49 -5% 218% 297 86 1.3x 71% 73% 7.6x n/m 1% 4 / 1

44 * Oclaro OCLR 3.26 -1% 481% 165 102 .8x 38% 72% .2x 8x 1% 8 / 6

45 * Safeguard Scientific SFE 14.14 -24% 51% 293 83 .8x 72% 72% n/m n/m <1% 1 / 1


* New additions are highlighted. Criteria: ► TBV > 50% of MV ► ST assets - liabilities > 50% of MV ► MV > $100mn ► China RTOs excl.



This Month’s Top 10 Web Links A Selection of Our Favorite Freely Accessible Internet Resources

Warren Buffett Interview with Charlie Rose Plus: Buffett’s op-ed in The New York Times, http://nyti.ms/qiWT7h

http://bit.ly/oYsmau

Fairholme Funds Semi-Annual Report Plus: Berkowitz’s conference call with Bank of America CEO, http://bit.ly/q9iIHL Plus: Morningstar analysts discuss recent performance, http://bit.ly/n0Y24c

http://bit.ly/dFm3fv

Longleaf Partners Semi-Annual Report http://bit.ly/o0z6RU

Tweedy Browne Comment on Recent Market Turmoil http://bit.ly/q2v1J9

David Swensen Opinion on Mutual Fund Industry http://nyti.ms/pHsuBo

George Soros Interview with SPIEGEL Plus: Charts on the global debt crisis, http://bit.ly/oiCQAT Plus: Kleiner Perkins report on U.S. financial state, http://bit.ly/oFIWCy

http://bit.ly/nj0GKM

Jim Grant Interview with CNBC http://bit.ly/otnKw2

Tom Russo, David Nadel Interview with Consuelo Mack http://bit.ly/r0rgrr

Jeffrey Gundlach Conference Call on Market Turmoil http://bit.ly/pR9NVX

Farnam Street: “What does Bill Gates Read for Fun?” http://bit.ly/p1Tr3h



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