Value-oriented Equity Investment Ideas for Sophisticated Investors

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Investing In The Tradition of
Graham, Buffett, Klarman
Year V, Volume III
March 2012
When asked how he became so
successful, Buffett answered:
“We read hundreds and hundreds
of annual reports every year.”
Top Ideas In This Report

Ambassadors Group
(NYSE: EPAX) …………………… 68
Corning
(NYSE: GLW) ………………….... 84
Xerox
(NYSE: XRX) …………………… 144
Also Inside

Editor’s Commentary ……………….. 4
Rapuano on Ambassadors Group ….. 6
Interview with John Lambert ………. 7
Portfolios with Signal Value™ …… 12
20 Superinvestor Holdings ……….. 68
Screening Superinvestor Stocks….. 148
Favorite Value Screens …………… 158
This Month’s Top Web Links …….. 167
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 SUPERI NVESTOR I SSUE

► Screening for bargains owned by superinvestors
► Latest top holdings of 50+ top investors
► 20 companies profiled by MOI research team
► Proprietary selection of Top Three candidates for investment
► Plus: Lisa Rapuano’s guest write-up on Ambassadors Group
► Plus: Exclusive interview with John Lambert
► Plus: Favorite stock screens for value investors
Superinvestor companies mentioned in this issue include AbitibiBowater,
Alliant Techsystems, Ambassadors Group, Ameriprise Financial,
Annaly Capital, Apache, Assured Guaranty, Axis Capital, Baker Hughes,
Bank of America, Best Buy, BofI Holding, Boston Scientific, BP,
C&J Energy, Canadian Natural Resources, Capital One, Chevron, CIGNA,
Citigroup, Cliffs Natural, CNinsure, Commercial Metals, ConocoPhillips,
Corning, Covidien, Cowen, CVR Energy, Dell, Delphi Automotive,
Delta Air Lines, DeVry, DIRECTV, Enstar Group, Everest Re, Flagstone Re,
Flextronics, Gannett, General Motors, Genworth Financial, GeoMet,
Goodyear Tire, Google, Greenlight Re, Halliburton, Hanesbrands,
Hartford Financial, HCA, Health Mgmt Associates, Hewlett-Packard,
HollyFrontier, Ingram Micro, JPMorgan Chase, Katy Industries, KKR & Co.,
Kronos Worldwide, MEMC Electronic Materials, Meritor, Navistar,
Newcastle Investment, Newfield Exploration, Oracle, Owens Illinois,
Patterson-UTI Energy, PDL BioPharma, PennyMac Mortgage, PHH, Popular,
Quad Graphics, R.R. Donnelley, RenaissanceRe, Republic Airways,
Sanofi-Aventis, Seagate Technology, SK Telecom, SLM Corp.,
Spectrum Brands, Staples, Symetra Financial, Take-Two Interactive Software,
Targacept, Telecom Argentina, Teva Pharma, Torchmark, TOTAL,
TravelCenters, TRW Automotive, United Continental, Universal Stainless,
US Airways, Valassis Comms, Valeant Pharmaceuticals, Valero Energy,
Validus, Virgin Media, Warner Chilcott, WellPoint, Xerium Technologies,
Xerox, YPF, and more.
(analyzed companies are underlined)

Visit the Members Area at
http://members.manualofideas.com



Table of Contents

EDITORIAL COMMENTARY ..........................................................................4
GUEST WRITE-UP: LISA RAPUANO ON AMBASSADORS GROUP..........6
EXCLUSIVE INTERVIEW WITH JOHN LAMBERT........................................7
ONLINE ONLY: THREE EXCLUSIVE INTERVIEWS .................................. 10
50+ PORTFOLIOS WITH SIGNAL VALUE™ .............................................. 12
AKRE CAPITAL (CHUCK AKRE) ................................................................................................ 13
ALTAI CAPITAL (TOBY SYMONDS) ........................................................................................... 14
ANCIENT ART / TETON (QUINCY LEE) ...................................................................................... 15
APPALOOSA (DAVID TEPPER) ................................................................................................. 16
ATLANTIC INVESTMENT (ALEXANDER ROEPERS) ...................................................................... 17
BARES CAPITAL (BRIAN BARES).............................................................................................. 18
BAUPOST (SETH KLARMAN) .................................................................................................... 19
BERKSHIRE HATHAWAY (WARREN BUFFETT) ........................................................................... 20
BP CAPITAL (BOONE PICKENS)............................................................................................... 21
BRAVE WARRIOR (GLENN GREENBERG) .................................................................................. 22
BREEDEN CAPITAL (RICHARD BREEDEN) ................................................................................. 23
CENTAUR VALUE (ZEKE ASHTON) ........................................................................................... 24
CENTERBRIDGE (JEFFREY ARONSON AND MARK GALLOGLY) .................................................... 25
CHILDREN’S INVESTMENT (CHRIS HOHN) ................................................................................. 26
CHOU ASSOCIATES (FRANCIS CHOU) ...................................................................................... 27
EAGLE CAPITAL (BOYKIN CURRY) ........................................................................................... 28
EAGLE VALUE (MERYL WITMER) ............................................................................................. 29
EDINBURGH PARTNERS (SANDY NAIRN) .................................................................................. 30
ESL INVESTMENTS (EDDIE LAMPERT) ..................................................................................... 31
FAIRFAX (PREM WATSA) ........................................................................................................ 32
FAIRHOLME (BRUCE BERKOWITZ) ........................................................................................... 33
FORCE CAPITAL (ROBERT JAFFE) ........................................................................................... 34
GATES CAPITAL (JEFF GATES) ............................................................................................... 35
GLENVIEW (LARRY ROBBINS) ................................................................................................. 36
GOLDENTREE (STEVE TANANBAUM) ....................................................................................... 37
GREENHAVEN (ED WACHENHEIM) ........................................................................................... 38
GREENLIGHT (DAVID EINHORN) .............................................................................................. 39
H PARTNERS (REHAN JAFFER) ............................................................................................... 40
HARBINGER (PHIL FALCONE) .................................................................................................. 41
HAWKSHAW (KIAN GHAZI) ...................................................................................................... 42
HOUND PARTNERS (JONATHAN AUERBACH) ............................................................................ 43
ICAHN ENTITIES (CARL ICAHN) ................................................................................................ 44
INTERNATIONAL VALUE ADVISERS (CHARLES DE VAULX) .......................................................... 45
JOHO CAPITAL (ROBERT KARR) .............................................................................................. 46
LANE FIVE (LISA RAPUANO) .................................................................................................... 47
LEUCADIA (IAN CUMMING AND JOE STEINBERG) ....................................................................... 48
LONE PINE (STEVE MANDEL) .................................................................................................. 49
MARKEL GAYNER (TOM GAYNER) ........................................................................................... 50
MHR (MARK RACHESKY) ....................................................................................................... 51
MSD CAPITAL (GLENN FUHRMAN AND JOHN PHELAN) .............................................................. 52
PABRAI FUNDS (MOHNISH PABRAI) ......................................................................................... 53
PAULSON & CO. (JOHN PAULSON) .......................................................................................... 54
PENNANT (ALAN FOURNIER) ................................................................................................... 55

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PERSHING SQUARE (BILL ACKMAN) ........................................................................................ 56
SAGEVIEW (ED GILHULY AND SCOTT STUART) ......................................................................... 57
SCOUT (JAMES CRICHTON) .................................................................................................... 58
SECOND CURVE (TOM BROWN) .............................................................................................. 59
SOUTHEASTERN (MASON HAWKINS) ....................................................................................... 60
THIRD POINT (DAN LOEB)....................................................................................................... 61
TIGER GLOBAL (CHASE COLEMAN) ......................................................................................... 62
VALUEACT (JEFFREY UBBEN) ................................................................................................. 63
WEITZ FUNDS (WALLY WEITZ) ................................................................................................ 64
WEST COAST (LANCE HELFERT AND PAUL ORFALEA) ............................................................... 65
WINTERGREEN (DAVID WINTERS) ........................................................................................... 66
WL ROSS & CO. (WILBUR ROSS) ........................................................................................... 67
PROFILING 20 SUPERINVESTOR HOLDINGS ......................................... 68
AMBASSADORS GROUP (EPAX) – LANE FIVE ^ ...................................................................... 68
BAKER HUGHES (BHI) – GREENHAVEN ^ ............................................................................... 72
BOSTON SCIENTIFIC (BSX) – APPALOOSA ^^ ........................................................................ 76
CANADIAN NATURAL (CNQ) – BP CAPITAL ¯, PERSHING SQUARE ^, WINTERGREEN ¯ .......... 80
CORNING (GLW) – CENTURY ^^, DODGE & COX ^^, SEQUOIA ^^ ....................................... 84
COVIDIEN (COV) – FPA CRESCENT ^, HEARTLAND ^ ............................................................. 88
CVR ENERGY (CVI) – APPALOOSA -, ICAHN ^^ .................................................................... 92
DELL (DELL) – ANCIENT ART ^^, FAIRFAX -, GREENLIGHT ^^, IVA -, WEITZ - ................... 96
DEVRY (DV) – ARIEL ^, FPA ^^, LANE FIVE ¯ ................................................................... 100
FLIR SYSTEMS (FLIR) – WEITZ ^ ........................................................................................ 104
GOOGLE (GOOG) – BRAVE WARRIOR ^, LONE PINE ^, PENNANT ^, SCOUT ^^, TIGER ^ .... 108
MEMC ELECTRONIC MATERIALS (WFR) – ALTAI ^, THIRD POINT ^^.................................... 112
NEWFIELD EXPLORATION (NFX) – EAGLE CAPITAL ^, FPA ^, OAKMARK ^ ............................ 116
ORACLE (ORCL) – APPALOOSA ^^, EAGLE ^^, GLENVIEW ^^, MARKEL ^, WEITZ ^^ ....... 120
SPECTRUM BRANDS (SPB) – HARBINGER ^ ......................................................................... 124
STAPLES (SPLS) – FORCE ^^, IVA ^, OLSTEIN ^^, PZENA ^ ............................................ 128
TAKE-TWO INTERACTIVE (TTWO) – GLENVIEW ^, ICAHN ¯ .................................................. 132
TRIPADVISOR (TRIP) – PENNANT ^^, SCOUT ^^ ................................................................ 136
VIRGIN MEDIA (VMED) – EDINBURGH ^^ ............................................................................ 140
XEROX (XRX) – CENTAUR -, GLENVIEW ^, GREENLIGHT ^^, OLSTEIN ^ ............................. 144
SCREENING ~850 HOLDINGS OF 50+ SUPERINVESTORS .................. 148
TOP 100, BY MARKET VALUE ................................................................................................ 148
TOP 100, BY THIS FY EPS YIELD (CONSENSUS ESTIMATES) ................................................... 150
TOP 100, BY NEXT FY EPS YIELD (CONSENSUS ESTIMATES) .................................................. 152
TOP 100, BY TRAILING GROSS PROFIT TO ENTERPRISE VALUE ............................................... 154
TOP 100, BY TANGIBLE BOOK VALUE TO MARKET VALUE........................................................ 156
FAVORITE SCREENS FOR VALUE INVESTORS.................................... 158
“MAGIC FORMULA,” BASED ON TRAILING OPERATING INCOME ................................................. 158
“MAGIC FORMULA,” BASED ON THIS YEAR’S EPS ESTIMATES ................................................. 159
“MAGIC FORMULA,” BASED ON NEXT YEAR’S EPS ESTIMATES ................................................ 160
CONTRARIAN: BIGGEST YTD LOSERS (DELEVERAGED & PROFITABLE) ..................................... 161
VALUE WITH CATALYST: CHEAP REPURCHASERS OF STOCK ................................................... 162
PROFITABLE DIVIDEND PAYORS WITH DECENT BALANCE SHEETS............................................ 163
DEEP VALUE: LOTS OF REVENUE, LOW ENTERPRISE VALUE ................................................... 164
DEEP VALUE: NEGLECTED GROSS PROFITEERS .................................................................... 165
ACTIVIST TARGETS: POTENTIAL SALES, LIQUIDATIONS OR RECAPS ......................................... 166
THIS MONTH’S TOP 10 WEB LINKS ....................................................... 167


Value-oriented Equity Investment Ideas for Sophisticated Investors

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Editorial Commentary
With the February 15
th
institutional investor holdings SEC filing deadline behind us,
we are pleased to bring you a new Superinvestor Issue of The Manual of Ideas.
We’ve screened hundreds of superinvestor companies, analyzed twenty of them, and
found three ideas that deserve closer consideration:
Ambassadors Group (Nasdaq: EPAX, $5.50 per share; MV $97 million)

Ambassadors has a long-term record of impressive growth and returns on capital.
Recent profitability has been pressured by revenue declines and high opex. The
company has a strong balance sheet and should benefit from a recovery, assuming
enrollment eventually returns to the 40,000-50,000 level that prevailed prior to the
recession. Improving economic conditions in 2012 will not be fully reflected in
travel bookings until 2013. It is worth noting that Ambassadors was slow to bounce
back after the 2001 recession. Similar dynamics may be at work currently due to the
long lead time required to generate travel bookings. The current valuation appears to
give little credit to recovery potential over the next two to three years.
Lisa Rapuano of Lane Five, a large shareholder of Ambassadors, kindly agreed to
write up her investment thesis for the benefit of our members (see page 6).
Corning (NYSE: GLW, $13.50 per share; MV $20 billion)

Corning, which makes specialty glass for LCD displays and other products, has been
hurt by steeper-than-expected price declines in the display and solar panel markets.
Display accounts for 40% of revenue, while the 50%-owned equity affiliate Dow
Corning sells into the solar panel market. According to management, “price declines
will reset the profitability of both Display Technologies and Dow Corning to lower
levels.” Still, analysts expect Corning to earn $1.39 and $1.52 per share in 2012 and
2013, respectively, rendering the shares quite attractive, especially in light of
Corning’s very strong balance sheet.
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Value-oriented Equity Investment Ideas for Sophisticated Investors

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Xerox (NYSE: XRX, $8.30 per share; MV $11 billion)

Xerox is one of the cheapest large IT services companies, trading at under 8x
estimated EPS of $1.12 in 2012. The company has been allocating capital in a
shareholder-friendly way, spending an expected ~$1 billion on repurchases this year.
Xerox also appears to have cost-cutting opportunities in the legacy ACS business,
which was acquired for $6 billion in 2010. As a result, EPS growth is likely to
outpace low to mid single digit revenue growth over the next few years. We wish
Xerox had a stronger balance sheet but acknowledge that buying back shares is most
likely a better use of capital than deleveraging the balance sheet.

VALUEx Zurich/Klosters took place from February 1-3 and was once again a huge
success. It was wonderful to see many of our members there and to meet some new
value investors from around the world. I hope you’ll consider applying to attend next
year’s event (check back at www.valuex.ch in a few months).
I take this opportunity to thank my friend and co-organizer Guy Spier for
making the event a great experience for all participants. VALUEx Zurich/Klosters
simply couldn’t exist without Guy’s charisma and hospitality.

We’ll be in Omaha for the Berkshire Hathaway annual meeting this May, and we
invite you to join us for drinks and conversation. Space at our private gathering is
very limited, so please email Oliver Mihaljevic today at oliver@manualofideas.com
if you plan on traveling to Omaha. We look forward to seeing you there!
While in town, we also look forward to attending John Schwartz and Whitney
Tilson’s star-studded Value Investing Congress, to be held on May 6-7. Visit
www.ValueInvestingCongress.com/manualofideas before March 15 to get $1,300 off
(we earn no commission but are simply passing the best deal on to you).
Sincerely,

John Mihaljevic, CFA
and The Manual of Ideas research team

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Access The Manual of Ideas Model Portfolio in the online members area at members.manualofideas.com.
The portfolio consists of three sub-portfolios: a downside protection portfolio, a deep value portfolio, and a “magic formula” portfolio.
To view the portfolio’s mark-to-market performance and latest activity, click on the above-referenced link or type it into your web browser.

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Guest Write-up: Lisa Rapuano on Ambassadors Group
Ambassadors Group runs high-end student travel under the People to People and Discovery brand
names. This business used to be terrific, showing high teens enrollment growth, high 20%-range
revenue growth and triple digit returns on invested capital from the early 2000s through its peak in
2007. However, the fundamentals have declined precipitously since then. This decline began in 2009,
when the company saw a dramatic downturn in the number of students travelled during the financial
crisis and recession. Unlike most other travel and education related companies, however, there has
been no rebound in sales, and the number of enrolled travelers continues to contract. For 2011, the
company should end the year with travelers down ~10%,and down over 54% from the 2007 peak.
During this time, the company has increased its selling and marketing expenses related to the
travel business by about 5% and general and administrative spending related to the travel business is
down only 13% from the peak. This is obviously very poor performance when what was a triple-digit
return business is likely to earn only about 3% on equity and capital in the year we just completed.
Despite the disappointing results for the last four enrollment years, we think the business could be
revived to at least some level of its former level of performance, and at $5.50 today, it trades at a
ridiculously compelling valuation. At today’s price of ~$5.62, the company has a market capitalization
of ~$98 million. Cash at year end was ~$58.6 million, plus student deposits or $27.4 million, which we
treat as debt, puts the enterprise value at ~$70 million.
This company has historically generated outsized free cash flow due to high margins and low
capital expenditure needs. Since the students put down significant deposits ahead of their travel dates,
the company holds a large amount of “float”. Working capital can be very volatile. In most years it is a
benefit to cash but in 2011 we expect working capital to use cash because of lower student deposits
and the company’s choice to prepay a lot of future travel expenses. In 2010, however, working capital
was positive. So let’s leave working capital aside for this exercise. The company’s pre-working capital
free cash flow yield to EV is as follows:
2011: 9.9%
2010: 25.7%
2009: 66.7%
The company is trading at 5.1x the amount of cash it generated just a year ago. We rarely see these
sorts of free cash flow multiples for any type of business.
Clearly, the market is pricing the stock as if these cash flow numbers will never be repeated, but
we think that with the right strategy free cash flow can return to previous levels. We are not advocating
a particular approach at this time, but we see multiple ways that costs can be cut, money-losing
programs can be closed, program itineraries and possibly pricing can be revamped to meet customer
needs more appropriately, assets can be sold or optimized, and marketing and sales can be made more
efficient. In December we asked the Board to consider these issues and come back to us with
proposals, and we intend to continue this conversation.
The core People to People Student Ambassadors program is less awful than the aggregate business
appears to be, and we think there are opportunities to isolate that value while lowering or eliminating
losses in the non-core programs. In addition, we think there are costs that are redundant, marketing
approaches that are outdated and expensive, overcapacity of real estate that can be optimized and
possibly sellable assets that are not core to the student travel operation.
Overall we think EPAX is worth at least $10 if it is run in a low growth, asset optimized manner
that returns capital to shareholders and possibly as much as $20 if the business can be reinvigorated
and repositioned to begin growing again.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Exclusive Interview with John Lambert
We recently had the pleasure of interviewing John Lambert, an investment
manager at London-based GAM. Before joining GAM in 2007, John spent six
years as a pan-European investment analyst at Gartmore. Prior to that, he
worked as a UK equity analyst at M&G and a commodity trader at Cargill. John
holds a First Class BA (Hons) in Economics with Russian from Exeter
University and is a CFA Charterholder. He lives in London.
The Manual of Ideas: How did you get interested in investing? Describe your
path as an investor and what attracted you to your current role at GAM.
John Lambert: I first got interested in investing on a personal level during the
late 1990s when market gyrations were providing the retail investor with plenty
of opportunities to make, and lose, money. I certainly didn’t take it very
seriously to start with, but the more I learned about investing the more I felt it
was the ideal job for me, so I decided to make a slight change of direction to my
career, which was in commodities at the time. It has taken a long time to really
find a coherent investment style that I feel comfortable with, having worked for
several years just as a European sector analyst in industrial goods and services.
This was followed for a while by running a small pot of hedge fund assets
investing in that same sector, before moving to GAM. Here the brief is far
broader, helping to manage long-only UK and global funds with a distinct
contrarian and deep value approach.
Our time horizon is multi-year, which I feel much more comfortable with
than the daily pressure of the hedge fund world. It represented a huge step up,
given the relatively narrow area of expertise and experience as a sector analyst,
so the learning curve was necessarily very steep. The principal attraction of this,
at the time and still today, was the opportunity to expand my investment
horizons substantially and blend company-specific work with a much broader
understanding of how markets and economies work and interact.
MOI: When it comes to stock selection, what are the key criteria you look for in
potential investments?
Lambert: In general, we look for investments in areas that for one reason or
other are seeing particularly depressed sentiment or are simply out of favor.
Within this framework, we also like stocks with a particularly strong internal
dynamic, meaning they are to a greater-than-normal extent in control of their
own destiny. This usually leads us to recovery or turnaround situations where
the company is undertaking a number of different actions to rehabilitate itself
following a period of often dramatic underperformance. As a result they are
often perceived as low-quality businesses. Moreover, we like to see a strong
sense of change within the business, obvious examples of which would be the
divisional structure of the company, the balance sheet and senior management.
Unsurprisingly, these situations can offer considerable upside should the
company execute the turnaround successfully. In the simplest terms you could
say we look to exploit mean reversion.
MOI: How do you assess the quality and incentives of management?
Lambert: When considering management, we find humility and conservatism
to be important qualities. A strong track record of achievement in directly
comparable areas is obviously also nice to have. More often than not, we are
“In light of the underlying
cash generation potential and
asset value of [BP], we feel it
is significantly undervalued at
the current price.”

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seeing new management teams in companies where the previous incumbents
have failed operationally or strategically, and hence assessing the abilities and
direction of the new team becomes a critical task. There are no hard and fast
rules, but we would be wary of those appearing overly confident or those for
whom the share price appears to be more important than the business.
MOI: How do you generate investment ideas?
Lambert: The principal method of idea generation is through the use of very
long-term performance charts, which help to identify areas of currently
depressed sentiment and hence probable low valuations. Ideas also come
through more quantitative screening, subscription to quality newsletters like the
MOI and general reading. It is best described as eclectic, and there are no hard
criteria for qualification as a potential idea or inclusion in the portfolio.
MOI: What are your favorite hunting grounds for investments in the current
environment? Do you see value in Japan and, if so, how do you approach that
market?
Lambert: One of the attractions of our approach is that there will always be
areas that are out of favor, that offer value, and there will always be companies
that are experiencing a period of underperformance that has the potential to be
reversed. Hence we find opportunities in a wide range of industries and
geographies at any one time, since ideas are much more often than not generated
at a stock-specific level.
We do see value in Japan at the moment, and see high quality companies
that are very cheaply priced in comparison with Western equivalents. Valuations
have descended to levels comparable with or below Western markets, balance
sheets are strong and corporates are being forced to undertake restructuring and
business reorganizations more actively than ever before. Nevertheless, Western
investors remain largely apathetic to this and hence the region appears to us to
offer significant value.
We don’t approach the market differently to any other, and if anything our
investment style is even more weighted to a bottom-up approach. We still
attempt to find companies that are either significantly below their intrinsic value,
have strong turnaround potential or ideally both together.
MOI: Would you outline the summary thesis behind one or two of your best
ideas at this time?
Lambert: Two such ideas at present would be BP (London/NYSE: BP) and
Cable & Wireless Worldwide (London: CWC), both in the UK.
At BP, we feel the company has clearly had a cathartic shock following the Gulf
of Mexico incident, which has led to new management and hopefully in time a
new culture as well. This has had the benefit of allowing new management a
much freer hand in terms of the strategic direction of the group. In light of the
underlying cash generation potential and asset value of the company, we feel it
is significantly undervalued at the current price.
For Cable & Wireless Worldwide, this is a classic example of what we look for.
Essentially the company has been mismanaged for a decade, and with old
management finally cleared out, we feel a new start is in the cards. The
company’s assets appear materially undervalued at the current highly depressed
“[Cable & Wireless’] assets
appear materially
undervalued at the current
highly depressed share price,
in particular their UK
network, their subsea
network internationally, their
high-growth hosting business
and substantial tax assets, to
name just a few. We believe a
much sharper focus on cash
flow, and operational
performance, will reveal the
value of these assets in time.”

Value-oriented Equity Investment Ideas for Sophisticated Investors

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share price, in particular their UK network, their subsea network internationally,
their high-growth hosting business and substantial tax assets, to name just a few.
We believe a much sharper focus on cash flow, and operational performance,
will reveal the value of these assets in time. In the meantime, the depressed
share price means the company could clearly be of interest to larger acquirers,
with reported expressions of interest in both individual assets and the entire
company in recent months.
MOI: In investing, good ideas are only one piece of the success equation.
Skilled portfolio management is indispensable. What are the biggest challenges
you face as a portfolio manager? How do you manage risk?
Lambert: One of the biggest challenges in our style is to manage the position
size appropriately, since this is a key means both of controlling stock-specific
risks and capturing performance from the best ideas within the portfolio.
Recovery and restructuring situations can be long, drawn out processes that
rarely develop in a straight line, so timing the entry and when to raise the
holding to a meaningful exposure become critical success factors. In this regard
we tend to start with small positions and grow them when we get greater
confidence in the trajectory of the recovery.
MOI: How has market volatility over the past few years affected your
investment process, and have you tweaked your approach in any way as a result?
Lambert: Market conditions have generally not favored our style of investing
over recent years, so it has necessarily become somewhat more pragmatic. This
essentially means we have blended our instinctive restructuring and recovery
bias with higher quality and more naturally resilient businesses. In so doing, we
have learned that value can be found right across the quality spectrum, and not
just in the most beaten-down and unloved names.
MOI: What is the single biggest mistake investors make?
Lambert: Compared to most professions, investors suffer a distinct lack of
useful information and feedback that would enable them to improve their
processes and, ultimately, results. Knowing where and how to make small
improvements across the range of skills required to deliver better returns is
difficult to do, and consequently it is often put to one side and forgotten. This
would be a mistake. A greater effort to understand one’s strengths and
weaknesses as an investor, by deconstructing and measuring your process as
thoroughly as possible, is something the thoughtful individual should constantly
be striving for. Process analytics and improvement should be a core part of any
investment process!
MOI: What books have stood out to you in recent years?
Lambert: There is a clear winner in this category. Howard Marks’ The Most
Important Thing was for me the most concise and insightful reference guide to
value investing that I have yet found. Practically every page contains a nugget of
thoughtful and indispensable advice. Moreover, what we found particularly
resonant was the idea that a quality company is not synonymous with a good
investment, and that few assets are so bad they can’t be a good investment if
bought cheaply enough.
MOI: John, thanks very much for sharing your ideas and insights.
“Knowing where and how to
make small improvements
across the range of skills
required to deliver better
returns is difficult to do, and
consequently it is often put to
one side and forgotten. This
would be a mistake.”

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Online Only: Three Exclusive Interviews
The second annual VALUEx Zurich/Klosters gathering of value investors took
place in early February in Switzerland (www.valuex.ch). We had the pleasure of
learning from some of the most thoughtful investors in the business, including
Guy Spier, Bryan Lawrence, Whitney Tilson, Colin Moran, Massimo Fuggetta,
Simon Denison-Smith, and Ciccio Azzollini, to name a few. We are pleased to
share with you exclusive video interviews with the latter three fund managers.
To watch the video interviews, visit The Manual of Ideas Members Area at
http://members.manualofideas.com or click on the links below.




Watch our interview with
Ciccio Azzollini, CEO of
Cattolica Partecipazioni at
http://youtu.be/Kp0-QIqfqWI
Watch our interview with
value investment manager
Massimo Fuggetta at
http://youtu.be/Kc93t3N48oc
Watch our interview with
Jonathan Mills and Simon
Denison-Smith, investment
managers of the London-
based Metropolis Valuefund,
http://youtu.be/RCfxtmxlfco
If you have never before logged into
the online Members Area, click here
to set up your member profile or
type the following into your browser:
http://members.manualofideas.com/
?xgi=4HCgDaXOxu6DMn

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
• 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
• 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
• Toby Symonds, Altai Capital
• David Tepper, Appaloosa
• Steve Tananbaum, GoldenTree
• Jeffrey Ubben, ValueAct
• Ed Wachenheim, Deephaven
• Prem Watsa, Fairfax
• Wally Weitz, Weitz Funds
• David Winters, Wintergreen
• Meryl Witmer, Eagle Value

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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 ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Ross Stores / ROST 11,878 51.95 9% 1,501 >100% <1% 12% 18x 16x 8.2x
2 Markel / MKL 3,925 407.96 -2% 135 2% 1% 8% 26x 25x 1.6x
3 Dollar Tree / DLTR 10,335 86.83 4% 734 2% <1% 10% 22x 18x 8.1x
4 American Tower / AMT 24,875 63.29 5% 1,387 1% <1% 13% 77x 41x n/m
5 MasterCard / MA 50,284 396.14 6% 192 2% <1% 12% 18x 15x >9.9x
6 Berkshire Hathaway / BRK.A 194,903 117,980 3% 0 >100% <1% 4% 17x 15x 2.0x
7 Enstar Group / ESGR 1,403 97.01 -1% 492 5% 3% 7% 9x 8x 1.3x
8 Primo Water / PRMW 69 2.91 -4% 477 >100% 2% 0% n/m 11x 1.4x
9 CarMax / KMX 6,777 29.91 -2% 806 0% <1% 4% 17x 16x 2.6x
10 O’Reilly Automotive / ORLY 10,709 83.45 4% 550 2% <1% 7% 19x 16x 5.1x


Top Holdings of Akre Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 American Tower / AMT 24,875 63.29 5% 1,387 1% <1% 13% 77x 41x n/m
2 Ross Stores / ROST 11,878 51.95 9% 1,501 >100% <1% 12% 18x 16x 8.2x
3 MasterCard / MA 50,284 396.14 6% 192 2% <1% 12% 18x 15x >9.9x
4 Dollar Tree / DLTR 10,335 86.83 4% 734 2% <1% 10% 22x 18x 8.1x
5 Markel / MKL 3,925 407.96 -2% 135 2% 1% 8% 26x 25x 1.6x
6 Enstar Group / ESGR 1,403 97.01 -1% 492 5% 3% 7% 9x 8x 1.3x
7 O’Reilly Automotive / ORLY 10,709 83.45 4% 550 2% <1% 7% 19x 16x 5.1x
8 Lamar Advertising / LAMR 2,956 31.80 16% 1,282 -11% 1% 6% >99x >99x n/m
9 Berkshire Hathaway / BRK.A 194,903 117,980 3% 0 >100% <1% 4% 17x 15x 2.0x
10 CarMax / KMX 6,777 29.91 -2% 806 0% <1% 4% 17x 16x 2.6x


New Positions Sold Out Positions
Exxon Mobil / XOM Middleburg Financial / MBRG


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $654 million
Top 10 as % of portfolio 83%
Median market value $9.3 billion
Average market value $46 billion
Median P/E (this FY) 18x
Median P/E (next FY) 15x
Median P / tangible book 2.7x
*
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.

Services
56%
Financial
40%
Technology
2%
Other
2%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 McMoRan Exploration / MMR 2,189 13.57 -7% 3,566 51% 2% 17% n/m n/m 1.3x
2 MEMC Electronic / WFR 1,242 5.39 37% 6,138 50% 3% 12% 18x 19x .7x
3 Energy XXI / EXXI 2,877 37.60 18% 1,134 10% 1% 15% 10x 8x 2.4x
4 Dynegy / DYN 203 1.65 -40% 6,313 40% 5% 4% n/m n/m .1x
5 ReachLocal / RLOC 250 8.51 38% 1,075 63% 4% 3% n/m n/m 7.7x
6 IntraLinks / IL 354 6.52 4% 1,666 -20% 3% 4% 15x 14x n/m
7 Leap Wireless / LEAP 715 9.09 -2% 1,180 -34% 2% 4% n/m n/m n/m
8 Six Flags / SIX 2,591 47.08 14% 2,420 -29% 4% 40% 84x 64x n/m


Top Holdings of Altai Capital – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Six Flags / SIX 2,591 47.08 14% 2,420 -29% 4% 40% 84x 64x n/m
2 McMoRan Exploration / MMR 2,189 13.57 -7% 3,566 51% 2% 17% n/m n/m 1.3x
3 Energy XXI / EXXI 2,877 37.60 18% 1,134 10% 1% 15% 10x 8x 2.4x
4 MEMC Electronic / WFR 1,242 5.39 37% 6,138 50% 3% 12% 18x 19x .7x
5 IntraLinks / IL 354 6.52 4% 1,666 -20% 3% 4% 15x 14x n/m
6 Leap Wireless / LEAP 715 9.09 -2% 1,180 -34% 2% 4% n/m n/m n/m
7 Dynegy / DYN 203 1.65 -40% 6,313 40% 5% 4% n/m n/m .1x
8 ReachLocal / RLOC 250 8.51 38% 1,075 63% 4% 3% n/m n/m 7.7x
9 iSoftStone / ISS 561 10.10 15% 418 -90% <1% 1% 18x 13x 2.8x
10 RealD / RLD 648 11.90 50% 68 -90% <1% 0% 25x 28x 3.7x


New Positions Sold Out Positions
None Blue Coat Systems / BCSI
Eastman Kodak / EK



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $284 million
Top 10 as % of portfolio 100%
Median market value $715 million
Average market value $1.2 billion
Median P/E (this FY) 18x
Median P/E (next FY) 19x
Median P / tangible book 2.6x
*
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.


Services
49%
Energy
33%
Technology
16%
Other
2%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Penn National Gaming / PENN 3,244 41.47 9% 342 new <1% 7% 19x 15x 8.4x
2 Apple / AAPL 460,050 493.42 22% 50 new <1% 11% 12x 10x 5.4x
3 Google / GOOG 197,003 605.91 -6% 40 23% <1% 11% 14x 12x 4.0x
4 Valeant Pharma / VRX 14,310 47.91 3% 406 7% <1% 9% n/a n/a n/m
5 Dell / DELL 31,888 17.75 21% 641 new <1% 5% 8x 9x >9.9x
6 Charter Comms / CHTR 6,306 58.59 3% 79 new <1% 2% n/m >99x n/m
7 BofI Holding / BOFI 190 16.66 3% 569 0% 5% 4% 8x 8x 1.1x
8 Teekay Corp. / TK 1,809 26.33 -1% 334 49% <1% 4% n/m n/m 1.8x
9 Level 3 Comms / LVLT 4,392 21.15 24% 295 new <1% 3% n/m n/m n/m
10 Credit Acceptance / CACC 2,379 92.67 13% 130 0% <1% 6% 11x 10x 4.4x


Top Holdings of Teton Capital / Ancient Art – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Apple / AAPL 460,050 493.42 22% 50 new <1% 11% 12x 10x 5.4x
2 Google / GOOG 197,003 605.91 -6% 40 23% <1% 11% 14x 12x 4.0x
3 Microsoft / MSFT 255,877 30.50 17% 645 -22% <1% 9% 11x 10x 6.1x
4 Valeant Pharma / VRX 14,310 47.91 3% 406 7% <1% 9% n/a n/a n/m
5 Penn National Gaming / PENN 3,244 41.47 9% 342 new <1% 7% 19x 15x 8.4x
6 Credit Acceptance / CACC 2,379 92.67 13% 130 0% <1% 6% 11x 10x 4.4x
7 CBS / CBS 19,597 29.90 10% 384 -20% <1% 5% 16x 13x n/m
8 Dell / DELL 31,888 17.75 21% 641 new <1% 5% 8x 9x >9.9x
9 Liberty Global / LBTYA 13,172 48.55 18% 214 0% <1% 5% n/m 32x n/m
10 BofI Holding / BOFI 190 16.66 3% 569 0% 5% 4% 8x 8x 1.1x


New Positions Sold Out Positions
Apple / AAPL
Bank of America / BAC
Charter Comms / CHTR
Chemtura / CHMT
Dell / DELL
Level 3 Comms / LVLT
Penn National Gaming / PENN
Aon / AON
Bancorp / TBBK
Clear Channel / CCO
NXP Semiconductors / NXPI



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $213 million
Top 10 as % of portfolio 74%
Median market value $4.4 billion
Average market value $46 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 1.8x
*
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.

Technology
37%
Services
28%
Financial
15%
Other
19%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Apple / AAPL 460,050 493.42 22% 182 >100% <1% 10% 12x 10x 5.4x
2 Boston Scientific / BSX 8,785 5.93 11% 7,798 new <1% 5% 14x 12x n/m
3 Oracle / ORCL 143,211 28.50 11% 1,219 new <1% 4% 12x 11x >9.9x
4 Royal Bank Scotland / RBS 26,145 8.77 38% 11,119 0% <1% 11% n/a n/a .3x
5 Dean Foods / DF 1,964 10.69 -5% 6,179 -22% 3% 8% 15x 12x n/m
6 Calumet Specialty / CLMT 1,147 22.26 10% 1,289 -3% 3% 3% 19x 11x 2.5x
7 Goodyear Tire / GT 3,392 13.88 -2% 6,057 -45% 2% 10% 7x 6x >9.9x
8 Hartford Financial / HIG 8,806 19.90 22% 1,275 -5% <1% 3% 6x 5x .4x
8 Hartford Financial / HIG 8,806 19.90 22% 1,275 -5% <1% 3% 6x 5x .4x
10 Delphi Automotive / DLPH 9,861 30.04 39% 229 new <1% 1% 8x 7x 9.0x

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.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 CVR Energy / CVI 2,346 27.10 45% 5,005 -21% 6% 16% 7x 8x 2.3x
2 Royal Bank Scotland / RBS 26,145 8.77 38% 11,119 0% <1% 11% n/a n/a .3x
3 Apple / AAPL 460,050 493.42 22% 182 >100% <1% 10% 12x 10x 5.4x
4 Goodyear Tire / GT 3,392 13.88 -2% 6,057 -45% 2% 10% 7x 6x >9.9x
5 Dean Foods / DF 1,964 10.69 -5% 6,179 -22% 3% 8% 15x 12x n/m
6 Boston Scientific / BSX 8,785 5.93 11% 7,798 new <1% 5% 14x 12x n/m
7 Oracle / ORCL 143,211 28.50 11% 1,219 new <1% 4% 12x 11x >9.9x
8 Calumet Specialty / CLMT 1,147 22.26 10% 1,289 -3% 3% 3% 19x 11x 2.5x
9 US Airways / LCC 1,435 8.85 75% 3,238 -65% 2% 3% 4x 4x n/m
10 Mueller Water / MWA 468 2.99 23% 9,442 -11% 6% 3% n/m 43x n/m

New Positions Sold Out Positions
Boston Scientific / BSX
Delphi Automotive / DLPH
Oracle / ORCL
AMR Corp. (AMR)
Applied Materials / AMAT
BP / BP
Citigroup / C
Dana Holding / DAN
Delta Air Lines / DAL
E*Trade Financial / ETFC
Google / GOOG
HollyFrontier / HFC
KB Home / KBH
KLA-Tencor / KLAC
Lam Research / LRCX
Micron Technology / MU
Mosaic Company / MOS
Navistar / NAV
Owens Corning / OC
Pulte Homes / PHM
Ryland Group / RYL
SuperMedia / SPMD
Temple-Inland / TIN
Teradyne / TER
Tesoro / TSO
Western Refining / WNR

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $864 million
Top 10 as % of portfolio 74%
Median market value $6.1 billion
Average market value $35 billion
Median P/E (this FY) 11x
Median P/E (next FY) 10x
Median P / tangible book 2.3x
*
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.

Energy
22%
Financial
17%
Technology
17%
Other
44%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Joy Global / JOY 8,970 83.75 12% 2,230 new 2% 15% 11x 10x 7.9x
2 Energizer Holdings / ENR 5,021 76.13 -2% 2,248 23% 3% 14% 12x 11x n/m
3 Flowserve / FLS 6,409 115.35 16% 1,614 33% 3% 15% 15x 13x 5.6x
4 Kennametal / KMT 3,508 43.98 20% 3,300 new 4% 12% 11x 10x 3.7x
5 Owens Illinois / OI 3,992 24.28 25% 8,240 3% 5% 17% 9x 8x n/m
6 Harman International / HAR 3,499 49.85 31% 590 new <1% 2% 17x 13x 2.7x
7 Rockwood Holdings / ROC 4,155 54.02 37% 600 new <1% 3% 14x 13x n/m
8 Crown Holdings / CCK 5,669 37.50 12% 748 4% <1% 2% 12x 11x n/m
9 Crane Co. / CR 2,831 48.68 4% 369 30% <1% 1% 13x 11x >9.9x
10 TRW Automotive / TRW 5,120 41.38 27% 300 71% <1% 1% 6x 7x 9.2x


Top Holdings of Atlantic Investment Management – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Owens Illinois / OI 3,992 24.28 25% 8,240 3% 5% 17% 9x 8x n/m
2 Joy Global / JOY 8,970 83.75 12% 2,230 new 2% 15% 11x 10x 7.9x
3 Flowserve / FLS 6,409 115.35 16% 1,614 33% 3% 15% 15x 13x 5.6x
4 Energizer Holdings / ENR 5,021 76.13 -2% 2,248 23% 3% 14% 12x 11x n/m
5 Ashland / ASH 5,019 64.10 12% 2,535 -16% 3% 13% 11x 9x n/m
6 Kennametal / KMT 3,508 43.98 20% 3,300 new 4% 12% 11x 10x 3.7x
7 Rockwood Holdings / ROC 4,155 54.02 37% 600 new <1% 3% 14x 13x n/m
8 Harman International / HAR 3,499 49.85 31% 590 new <1% 2% 17x 13x 2.7x
9 Crown Holdings / CCK 5,669 37.50 12% 748 4% <1% 2% 12x 11x n/m
10 Solutia / SOA 3,419 27.97 62% 760 1% <1% 2% 13x 11x n/m


New Positions Sold Out Positions
Harman International / HAR
Joy Global / JOY
Kennametal / KMT
Rockwood Holdings / ROC
Curtiss-Wright Corp. / CW
Jarden Corp. / JAH
McKesson / MCK
Nalco Holding / NLC
Newell Rubbermaid / NWL
Stanley Black Decker / SWK
Timken / TKR


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $1.2 billion
Top 10 as % of portfolio 96%
Median maret value $5.0 billion
Average market value $6.5 billion
Median P/E (this FY) 12x
Median P/E (next FY) 11x
Median P / tangible book 5.6x
*
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.

Capital Goods
43%
Basic Materials
38%
Technology
14%
Other
5%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 INTL FCStone / INTL 427 22.51 -4% 2,783 1% 15% 15% 9x n/a 1.8x
2 Utah Medical / UTMD 109 29.95 11% 413 1% 11% 3% 15x 13x n/m
3 Female Health / FHCO 147 5.25 16% 4,140 3% 15% 5% n/a n/a 8.6x
4 Dolan Media / DM 324 10.58 24% 3,013 15% 10% 8% 26x 18x n/m
5 Tandy Leather / TLF 52 5.10 5% 1,647 0% 16% 2% n/a n/a 1.6x
6 Winmark / WINA 305 61.28 7% 849 0% 17% 12% n/a n/a >9.9x
7 Interactive Intell. / ININ 520 27.53 20% 2,240 1% 12% 15% 32x 25x 5.6x
8 American Public Ed. / APEI 725 40.65 -6% 413 12% 2% 4% 20x 17x 6.0x
9 Colfax / CFX 2,843 33.57 18% 482 15% <1% 4% 21x 16x >9.9x
10 Hallmark Financial / HALL 132 6.84 -2% 1,907 0% 10% 3% n/m >99x .9x

Top Holdings of Bares Capital Management – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 INTL FCStone / INTL 427 22.51 -4% 2,783 1% 15% 15% 9x n/a 1.8x
2 Interactive Intell. / ININ 520 27.53 20% 2,240 1% 12% 15% 32x 25x 5.6x
3 Winmark / WINA 305 61.28 7% 849 0% 17% 12% n/a n/a >9.9x
4 Dolan Media / DM 324 10.58 24% 3,013 15% 10% 8% 26x 18x n/m
5 Female Health / FHCO 147 5.25 16% 4,140 3% 15% 5% n/a n/a 8.6x
6 American Public Ed. / APEI 725 40.65 -6% 413 12% 2% 4% 20x 17x 6.0x
7 Stratasys / SSYS 766 36.15 19% 460 16% 2% 4% 30x 26x 5.8x
8 Colfax / CFX 2,843 33.57 18% 482 15% <1% 4% 21x 16x >9.9x
9 Stamps.com / STMP 455 30.29 16% 457 -42% 3% 3% 23x 18x 4.9x
10 Hallmark Financial / HALL 132 6.84 -2% 1,907 0% 10% 3% n/m >99x .9x

New Positions Sold Out Positions
Kinder Morgan Mgmt / KMR
Travelzoo / TZOO
American Dental / ADPI
BIDZ.com / BIDZ
Level 3 Comms / LVLT
OneBeacon Insurance / OB
Winthrop Realty / FUR

Portfolio Metrics
**
Sector Weightings
*

Portfolio size $418 million
Top 10 as % of portfolio 73%
Median market value $964 million
Average market value $18 billion
Median P/E (this FY) 18x
Median P/E (next FY) 15x
Median P / tangible book 2.3x
*
Email support@manualofideas.com 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.

Financial
32%
Technology
24%
Services
22%
Other
23%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Targacept / TRGT 203 6.07 9% 6,000 new 18% 1% n/m n/m 1.1x
2 AVEO Pharma / AVEO 590 13.65 -21% 5,085 2% 12% 2% 20x n/m 2.4x
3 Theravance / THRX 1,407 16.53 -25% 14,226 0% 17% 7% n/m n/m n/m
4 News Corp. / NWSA 47,979 19.18 8% 25,700 1% 1% 14% 14x 11x >9.9x
5 Syneron Medical / ELOS 368 10.56 -5% 4,000 0% 11% 1% 30x 19x 2.0x
6 ViaSat / VSAT 1,937 45.22 -2% 10,500 0% 25% 14% 52x 48x 2.6x
7 Enzon Pharma / ENZN 359 7.43 11% 9,001 0% 19% 2% n/a n/a 1.8x
8 Alliance One / AOI 266 3.04 12% 8,787 0% 10% 1% 8x n/a .9x
9 Microsoft / MSFT 255,877 30.50 17% 12,000 0% <1% 11% 11x 10x 6.1x
10 Idenix Pharma / IDIX 1,153 10.92 47% 5,665 >100% 5% 2% n/m n/m n/m

Top Holdings of Baupost – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 BP / BP 147,159 46.35 8% 12,000 -13% <1% 16% 7x 7x 1.9x
2 Hewlett-Packard / HPQ 56,721 28.70 11% 18,750 -10% <1% 16% 7x 6x n/m
3 News Corp. / NWSA 47,979 19.18 8% 25,700 1% 1% 14% 14x 11x >9.9x
4 ViaSat / VSAT 1,937 45.22 -2% 10,500 0% 25% 14% 52x 48x 2.6x
5 Microsoft / MSFT 255,877 30.50 17% 12,000 0% <1% 11% 11x 10x 6.1x
6 Theravance / THRX 1,407 16.53 -25% 14,226 0% 17% 7% n/m n/m n/m
7 Allied Nevada Gold / ANV 3,044 34.07 13% 4,013 15% 4% 4% 92x 20x 5.6x
8 Genworth Financial / GNW 4,288 8.74 33% 10,000 0% 2% 3% 7x 5x .3x
9 AVEO Pharma / AVEO 590 13.65 -21% 5,085 2% 12% 2% 20x n/m 2.4x
10 Enzon Pharma / ENZN 359 7.43 11% 9,001 0% 19% 2% n/a n/a 1.8x

New Positions Sold Out Positions
Targacept / TRGT BreitBurn Energy / BBEP

Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $3.4 billion
Top 10 as % of portfolio 88%
Median market value $1.2 billion
Average market value $24 billion
Median P/E (this FY) 11x
Median P/E (next FY) 11x
Median P / tangible book 1.9x
*
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.
**
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.

Technology
40%
Health Care
18%
Energy
16%
Other
26%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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.
Berkshire has hired Todd Combs and Ted Weschler to help Buffett manage the portfolio and succeed him eventually.

MOI Signal Rank™ – Top Current Ideas of Berkshire Hathaway
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 IBM / IBM 226,790 192.42 5% 63,906 11% 5% 18% 13x 12x n/m
2 Wells Fargo / WFC 159,577 30.26 10% 383,704 6% 7% 17% 9x 8x 1.8x
3 Procter & Gamble / PG 175,951 63.88 -4% 76,766 0% 3% 7% 16x 15x n/m
4 Coca-Cola / KO 154,308 67.94 -3% 200,000 0% 9% 20% 17x 15x >9.9x
5 Washington Post / WPO 3,003 389.02 3% 1,728 0% 22% 1% 18x 23x 5.0x
6 American Express / AXP 60,176 51.81 10% 151,611 0% 13% 11% 12x 11x 3.2x
7 Moody’s / MCO 8,534 38.44 14% 28,415 0% 13% 2% 15x 13x n/m
8 USG / USG 1,473 13.99 38% 17,072 0% 16% 0% n/m n/m 9.4x
9 DIRECTV / DTV 32,111 45.51 6% 20,348 >100% 3% 1% 13x 10x n/m
10 ConocoPhillips / COP 95,929 72.25 -1% 29,101 0% 2% 3% 9x 8x 1.6x

Top Holdings of Berkshire Hathaway – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Coca-Cola / KO 154,308 67.94 -3% 200,000 0% 9% 20% 17x 15x >9.9x
2 IBM / IBM 226,790 192.42 5% 63,906 11% 5% 18% 13x 12x n/m
3 Wells Fargo / WFC 159,577 30.26 10% 383,704 6% 7% 17% 9x 8x 1.8x
4 American Express / AXP 60,176 51.81 10% 151,611 0% 13% 11% 12x 11x 3.2x
5 Procter & Gamble / PG 175,951 63.88 -4% 76,766 0% 3% 7% 16x 15x n/m
6 Kraft Foods / KFT 68,161 38.58 3% 87,035 -3% 5% 5% 17x 15x n/m
7 Wal-Mart / WMT 211,989 61.90 4% 39,037 0% 1% 4% 14x 13x 4.5x
8 ConocoPhillips / COP 95,929 72.25 -1% 29,101 0% 2% 3% 9x 8x 1.6x
9 U.S. Bancorp / USB 55,363 29.01 7% 69,039 0% 4% 3% 11x 10x 2.8x
10 Johnson & Johnson / JNJ 176,413 64.60 -1% 29,018 -23% 1% 3% 13x 12x 6.5x


New Positions Sold Out Positions
DaVita / DVA
Liberty Media / LMCA
Exxon Mobil / XOM

Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $69 billion
Top 10 as % of portfolio 90%
Median market value $56 billion
Average market value $83 billion
Median P/E (this FY) 13x
Median P/E (next FY) 12x
Median P / tangible book 2.9x
*
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.
**
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.


Financial
33%
Consumer
Non-Cyclical
32%
Technology
18%
Other
17%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 McMoRan Exploration / MMR 2,189 13.57 -7% 1,096 0% <1% 10% n/m n/m 1.3x
2 Chesapeake Energy / CHK 14,590 22.13 -1% 570 0% <1% 9% 8x 11x 1.1x
3 BP / BP 147,159 46.35 8% 402 0% <1% 13% 7x 7x 1.9x
4 Transocean / RIG 16,462 50.21 31% 163 new <1% 6% 34x 17x 1.3x
5 Weatherford / WFT 13,610 17.79 22% 515 0% <1% 6% 21x 12x 2.8x
6 Nat.-Oilwell Varco / NOV 35,035 82.66 22% 179 0% <1% 10% 14x 12x 4.7x
7 Golar LNG / GLNG 3,527 43.95 -1% 49 new <1% 1% 46x 22x 6.0x
8 SandRidge Energy / SD 3,107 7.46 -9% 1,181 0% <1% 6% n/m >99x 1.8x
9 Dawson Geophysical / DWSN 293 36.94 -7% 245 0% 3% 6% 18x 12x 1.5x
10 Exxon Mobil / XOM 401,671 83.80 -1% 94 0% <1% 5% 10x 9x 2.6x


Top Holdings of BP Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 BP / BP 147,159 46.35 8% 402 0% <1% 13% 7x 7x 1.9x
2 McMoRan Exploration / MMR 2,189 13.57 -7% 1,096 0% <1% 10% n/m n/m 1.3x
3 Nat.-Oilwell Varco / NOV 35,035 82.66 22% 179 0% <1% 10% 14x 12x 4.7x
4 Chesapeake Energy / CHK 14,590 22.13 -1% 570 0% <1% 9% 8x 11x 1.1x
5 Weatherford / WFT 13,610 17.79 22% 515 0% <1% 6% 21x 12x 2.8x
6 Dawson Geophysical / DWSN 293 36.94 -7% 245 0% 3% 6% 18x 12x 1.5x
7 Devon Energy / DVN 26,112 64.65 4% 140 0% <1% 6% 11x 10x 1.7x
8 SandRidge Energy / SD 3,107 7.46 -9% 1,181 0% <1% 6% n/m >99x 1.8x
9 Transocean / RIG 16,462 50.21 31% 163 new <1% 6% 34x 17x 1.3x
10 Exxon Mobil / XOM 401,671 83.80 -1% 94 0% <1% 5% 10x 9x 2.6x


New Positions Sold Out Positions
Golar LNG / GLNG
Transocean / RIG
EOG Resources / EOG


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $148 million
Top 10 as % of portfolio 77%
Median market value $28 billion
Average market value $56 billion
Median P/E (this FY) 14x
Median P/E (next FY) 11x
Median P / tangible book 1.9x
*
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.
**
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.

Energy
99%
Transportation
1%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Google / GOOG 197,003 605.91 -6% 299 3% <1% 14% 14x 12x 4.0x
2 Valeant Pharma / VRX 14,310 47.91 3% 4,360 13% 1% 16% n/a n/a n/m
3 Comcast / CMCSA 73,362 27.18 15% 4,923 4% <1% 10% 18x 15x n/m
4 VistaPrint / VPRT 1,448 39.23 28% 2,086 new 6% 6% 22x 19x >9.9x
5 U.S. Bancorp / USB 55,363 29.01 7% 2,959 3% <1% 7% 11x 10x 2.8x
6 Oracle / ORCL 143,211 28.50 11% 1,028 new <1% 2% 12x 11x >9.9x
7 Adobe Systems / ADBE 15,905 32.21 14% 1,422 new <1% 4% 13x 12x >9.9x
8 Primerica / PRI 1,601 24.68 6% 1,684 23% 3% 3% 9x 9x 1.2x
9 Visa / V 92,635 113.90 12% 274 7% <1% 2% 19x 16x >9.9x
10 Motorola Solutions / MSI 15,430 47.40 2% 2,157 -10% <1% 8% 16x 14x 4.1x

Top Holdings of Brave Warrior – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Valeant Pharma / VRX 14,310 47.91 3% 4,360 13% 1% 16% n/a n/a n/m
2 Google / GOOG 197,003 605.91 -6% 299 3% <1% 14% 14x 12x 4.0x
3 Fiserv / FISV 9,047 64.23 9% 2,375 -7% 2% 12% 13x 11x n/m
4 Comcast / CMCSA 73,362 27.18 15% 4,923 4% <1% 10% 18x 15x n/m
5 Motorola Solutions / MSI 15,430 47.40 2% 2,157 -10% <1% 8% 16x 14x 4.1x
6 U.S. Bancorp / USB 55,363 29.01 7% 2,959 3% <1% 7% 11x 10x 2.8x
7 VistaPrint / VPRT 1,448 39.23 28% 2,086 new 6% 6% 22x 19x >9.9x
8 Aon / AON 15,699 48.56 4% 1,508 -41% <1% 6% 14x 12x n/m
9 Lab Corp. of America / LH 8,922 90.03 5% 784 -6% <1% 5% 14x 13x n/m
10 MasterCard / MA 50,284 396.14 6% 164 -40% <1% 5% 18x 15x >9.9x

New Positions Sold Out Positions
Adobe Systems / ADBE
Globe Specialty / GSM
Oracle / ORCL
VistaPrint / VPRT
Wells Fargo / WFC

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $1.3 billion
Top 10 as % of portfolio 88%
Median market value $16 billion
Average market value $53 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 2.6x
*
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.

Technology
31%
Financial
23%
Health Care
21%
Other
25%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Zale / ZLC 93 2.90 -24% 5,935 0% 18% 2% n/m n/m 1.3x
2 Stanley Black Decker / SWK 12,681 75.08 11% 807 16% <1% 9% 13x 11x n/m
3 Flowserve / FLS 6,409 115.35 16% 1,026 6% 2% 17% 15x 13x 5.6x
4 Helmerich & Payne / HP 6,365 59.27 2% 1,562 0% 1% 13% 12x 10x 1.8x
5 American Science / ASEI 687 77.02 13% 388 >100% 4% 4% 26x 24x 2.6x
6 Ashland / ASH 5,019 64.10 12% 354 new <1% 3% 11x 9x n/m
7 Alliant Techsystems / ATK 1,924 58.27 2% 397 0% 1% 3% 7x 8x n/m
8 Iron Mountain / IRM 5,656 30.47 -1% 1,633 -13% <1% 7% 25x 23x n/m
9 H&R Block / HRB 4,921 16.80 3% 7,166 -8% 2% 17% 11x 10x >9.9x
10 Airgas / ARG 6,008 78.68 1% 733 -27% <1% 8% 19x 17x >9.9x


Top Holdings of Breeden Capital – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 H&R Block / HRB 4,921 16.80 3% 7,166 -8% 2% 17% 11x 10x >9.9x
2 Flowserve / FLS 6,409 115.35 16% 1,026 6% 2% 17% 15x 13x 5.6x
3 Helmerich & Payne / HP 6,365 59.27 2% 1,562 0% 1% 13% 12x 10x 1.8x
4 Stanley Black Decker / SWK 12,681 75.08 11% 807 16% <1% 9% 13x 11x n/m
5 Airgas / ARG 6,008 78.68 1% 733 -27% <1% 8% 19x 17x >9.9x
6 Steris / STE 1,807 31.35 5% 1,771 -65% 3% 8% 14x 14x 4.0x
7 Iron Mountain / IRM 5,656 30.47 -1% 1,633 -13% <1% 7% 25x 23x n/m
8 Dun & Bradstreet / DNB 3,829 78.77 5% 594 -40% 1% 7% 12x 11x n/m
9 American Science / ASEI 687 77.02 13% 388 >100% 4% 4% 26x 24x 2.6x
10 Alliant Techsystems / ATK 1,924 58.27 2% 397 0% 1% 3% 7x 8x n/m


New Positions Sold Out Positions
Ashland / ASH Aon / AON
EMCOR Group / EME



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $694 million
Top 10 as % of portfolio 94%
Median market value $5.0 billion
Average market value $5.2 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 3.3x
*
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.

Services
27%
Capital Goods
20%
Energy
13%
Other
39%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Millipore / MIL 504 8.06 15% 550 >100% <1% 6% n/a n/a .9x
2 Ancestry.com / ACOM 1,364 30.96 35% 235 42% <1% 9% 25x 20x n/m
3 Coinstar / CSTR 1,745 56.40 24% 120 0% <1% 9% 14x 12x 6.8x
4 Medtronic / MDT 41,929 39.73 4% 90 >100% <1% 4% 12x 11x >9.9x
5 Diamond Offshore / DO 8,725 62.76 14% 60 50% <1% 5% 15x 12x 2.0x
6 IDT Corp. / IDT 199 8.74 -7% 150 88% <1% 2% 58x 11x 3.8x
7 Apple / AAPL 460,050 493.42 22% 7 21% <1% 4% 12x 10x 5.4x
8 Aspen Insurance / AHL 2,002 28.33 7% 125 0% <1% 4% 10x 9x .6x
9 Activision Blizzard / ATVI 14,103 12.33 0% 420 -14% <1% 7% 13x 11x 5.1x
10 Xerox / XRX 10,986 7.92 -1% 450 -18% <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.


Top Holdings of Centaur Value Fund – By Dollar Value
1, 2
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Dell / DELL 31,888 17.75 21% 460 -8% <1% 10% 8x 9x >9.9x
2 Ancestry.com / ACOM 1,364 30.96 35% 235 42% <1% 9% 25x 20x n/m
3 Coinstar / CSTR 1,745 56.40 24% 120 0% <1% 9% 14x 12x 6.8x
4 Activision Blizzard / ATVI 14,103 12.33 0% 420 -14% <1% 7% 13x 11x 5.1x
5 Millipore / MIL 504 8.06 15% 550 >100% <1% 6% n/a n/a .9x
6 Cisco Systems / CSCO 106,953 19.90 10% 215 -54% <1% 5% 11x 10x 3.5x
7 Interactive Brokers / IBKR 711 15.61 4% 248 -10% <1% 5% 12x 10x 1.2x
8 Diamond Offshore / DO 8,725 62.76 14% 60 50% <1% 5% 15x 12x 2.0x
9 Apple / AAPL 460,050 493.42 22% 7 21% <1% 4% 12x 10x 5.4x
10 Medtronic / MDT 41,929 39.73 4% 90 >100% <1% 4% 12x 11x >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.


New Positions Sold Out Positions
Genie Energy / GNE
(spun off from IDT)
Medtronic / MDT
Millipore / MIL
Alleghany / Y
Big Lots / BIG
Biglari Holdings / BH
Gap / GPS
Himax Tech / HIMX
P.F. Chang’s / PFCB
Transatlantic Petro / TAT
Western Digital / WDC


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $80 million
Top 10 as % of portfolio 64%
Median market value $1.7 billion
Average market value $25 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 1.8x
*
Based on equity holdings disclosed in 13F-HR filings with the SEC. Excludes
portfolio cash, certain non-U.S. holdings, and non-equity securities.

Technology
63%
Financial
18%
Health Care
12%
Other
7%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Delphi Automotive / DLPH 9,861 30.04 39% 12,116 new 4% 28% 8x 7x 9.0x
2 Visteon Corp. / VC 2,650 51.44 3% 2,107 >100% 4% 8% 13x 12x 2.6x
3 Starwood Hotels / HOT 10,874 55.67 16% 1,550 >100% <1% 7% 24x 21x >9.9x
4 BankUnited / BKU 2,221 22.83 4% 10,768 0% 11% 19% 13x 14x 1.5x
5 CIT Group / CIT 8,357 41.65 19% 9,397 0% 5% 30% 30x 18x 1.0x
6 Quad Graphics / QUAD 695 14.83 3% 2,229 0% 5% 3% 6x 7x 2.2x
7 General Motors / GM 39,896 25.50 26% 1,242 6% <1% 2% 7x 7x n/m
8 iStar Financial / SFI 659 6.96 32% 3,956 0% 4% 2% n/m n/m .4x
9 Penn National Gaming / PENN 3,244 41.47 9% 45 0% <1% 0% 19x 15x 8.4x


Top Holdings of Centerbridge Partners – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 CIT Group / CIT 8,357 41.65 19% 9,397 0% 5% 30% 30x 18x 1.0x
2 Delphi Automotive / DLPH 9,861 30.04 39% 12,116 new 4% 28% 8x 7x 9.0x
3 BankUnited / BKU 2,221 22.83 4% 10,768 0% 11% 19% 13x 14x 1.5x
4 Visteon Corp. / VC 2,650 51.44 3% 2,107 >100% 4% 8% 13x 12x 2.6x
5 Starwood Hotels / HOT 10,874 55.67 16% 1,550 >100% <1% 7% 24x 21x >9.9x
6 Quad Graphics / QUAD 695 14.83 3% 2,229 0% 5% 3% 6x 7x 2.2x
7 General Motors / GM 39,896 25.50 26% 1,242 6% <1% 2% 7x 7x n/m
8 iStar Financial / SFI 659 6.96 32% 3,956 0% 4% 2% n/m n/m .4x
9 Royal Bank Scotland / RBS 26,145 8.77 38% 1,508 -41% <1% 1% n/a n/a .3x
10 Walter Investment / WAC 599 21.50 5% 162 -91% <1% 0% n/m 10x n/m


New Positions Sold Out Positions
Delphi Automotive / DLPH None


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $1.3 billion
Top 10 as % of portfolio 100%
Median market value $3.2 billion
Average market value $9.6 billion
Median P/E (this FY) 13x
Median P/E (next FY) 12x
Median P / tangible book 1.9x
*
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.

Financial
55%
Consumer
Cyclical
33%
Services
12%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Royal Bank Scotland / RBS 26,145 8.77 38% 1,301 0% <1% 1% n/a n/a .3x
2 News Corp. / NWSA 47,979 19.18 8% 51,557 -4% 2% 47% 14x 11x >9.9x
3 Viacom / VIA 29,330 54.25 2% 4,283 -25% <1% 11% n/a n/a n/m
4 Walt Disney / DIS 74,293 41.45 11% 16,797 -12% <1% 33% 14x 12x >9.9x
5 WellPoint / WLP 22,322 64.17 -3% 673 -48% <1% 2% 8x 8x >9.9x
6 Oracle / ORCL 143,211 28.50 11% 1,641 -39% <1% 2% 12x 11x >9.9x
7 Union Pacific / UNP 53,590 111.63 5% 926 -74% <1% 5% 14x 12x 2.9x


Top Holdings of Children’s Investment Fund – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 News Corp. / NWSA 47,979 19.18 8% 51,557 -4% 2% 47% 14x 11x >9.9x
2 Walt Disney / DIS 74,293 41.45 11% 16,797 -12% <1% 33% 14x 12x >9.9x
3 Viacom / VIA 29,330 54.25 2% 4,283 -25% <1% 11% n/a n/a n/m
4 Union Pacific / UNP 53,590 111.63 5% 926 -74% <1% 5% 14x 12x 2.9x
5 Oracle / ORCL 143,211 28.50 11% 1,641 -39% <1% 2% 12x 11x >9.9x
6 WellPoint / WLP 22,322 64.17 -3% 673 -48% <1% 2% 8x 8x >9.9x
7 Royal Bank Scotland / RBS 26,145 8.77 38% 1,301 0% <1% 1% n/a n/a .3x


New Positions Sold Out Positions
None Kansas City Southern / KSU


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $2.1 billion
Top 10 as % of portfolio 100%
Median market value $39 billion
Average market value $51 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 2.9x
*
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.

Services
90%
Transportation
5%
Financial
3%
Other
2%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Watson Pharma / WPI 7,374 57.99 -4% 635 0% <1% 8% 12x 10x n/m
2 Berkshire Hathaway / BRK.A 194,903 117,980 3% 0 0% <1% 8% 17x 15x 2.0x
3 Bank of America / BAC 81,797 8.07 45% 8,950 40% <1% 17% 11x 7x .6x
4 JPMorgan Chase / JPM 142,909 37.61 13% 1,279 0% <1% 11% 8x 7x 1.2x
5 Overstock.com / OSTK 162 6.96 -11% 2,310 0% 10% 4% n/m n/m >9.9x
6 Primus Telecom / PTGI 181 13.24 5% 451 new 3% 1% n/a n/a n/m
7 RadioShack / RSH 759 7.60 -22% 1,294 29% 1% 2% 8x 10x 1.0x
8 Sanofi-Aventis / SNY 100,338 37.23 2% 410 0% <1% 3% 8x 6x n/m
9 Wells Fargo / WFC 159,577 30.26 10% 998 0% <1% 7% 9x 8x 1.8x
10 Qiao Xing Mobile / QXM 71 1.25 28% 1,584 >100% 3% 0% n/a n/a .2x

Top Holdings of Chou Associates – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Bank of America / BAC 81,797 8.07 45% 8,950 40% <1% 17% 11x 7x .6x
2 JPMorgan Chase / JPM 142,909 37.61 13% 1,279 0% <1% 11% 8x 7x 1.2x
3 AbitibiBowater / ABH 1,545 15.28 5% 2,659 -1% 3% 9% 10x 6x .5x
4 Watson Pharma / WPI 7,374 57.99 -4% 635 0% <1% 8% 12x 10x n/m
5 Berkshire Hathaway / BRK.A 194,903 117,980 3% 0 0% <1% 8% 17x 15x 2.0x
6 Wells Fargo / WFC 159,577 30.26 10% 998 0% <1% 7% 9x 8x 1.8x
7 Sears Holdings / SHLD 5,084 47.57 50% 584 21% <1% 6% n/m n/m 1.6x
8 Goldman Sachs / GS 56,183 114.12 26% 165 0% <1% 4% 10x 9x .9x
9 Overstock.com / OSTK 162 6.96 -11% 2,310 0% 10% 4% n/m n/m >9.9x
10 Sanofi-Aventis / SNY 100,338 37.23 2% 410 0% <1% 3% 8x 6x n/m


New Positions Sold Out Positions
Primus Telecom / PTGI CryptoLogic / CRYP
Gannett / GCI
MannKind / MNKD


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $437 million
Top 10 as % of portfolio 78%
Median market value $7.1 billion
Average market value $38 billion
Median P/E (this FY) 10x
Median P/E (next FY) 8x
Median P / tangible book 1.3x
*
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.
**
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.

Financial
53%
Services
24%
Health Care
13%
Other
10%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Coca-Cola / KO 154,308 67.94 -3% 8,035 4% <1% 5% 17x 15x >9.9x
2 Aon / AON 15,699 48.56 4% 11,258 6% 3% 5% 14x 12x n/m
3 Ecolab / ECL 18,384 61.20 6% 7,966 9% 3% 5% 24x 20x >9.9x
4 Wal-Mart / WMT 211,989 61.90 4% 9,589 4% <1% 6% 14x 13x 4.5x
5 Microsoft / MSFT 255,877 30.50 17% 20,596 4% <1% 6% 11x 10x 6.1x
6 Praxair / PX 32,122 107.16 0% 4,197 3% 1% 4% 18x 16x >9.9x
7 UnitedHealth / UNH 55,718 53.32 5% 8,018 5% <1% 4% 11x 10x 2.0x
8 3M / MMM 61,072 87.14 7% 4,881 7% <1% 4% 14x 13x 8.9x
9 W.R. Berkley / WRB 4,980 36.21 5% 10,733 4% 8% 4% 14x 13x 1.3x
10 Alleghany / Y 2,621 306.00 7% 7 >100% <1% 0% 33x 27x 1.0x


Top Holdings of Eagle Capital Management – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Microsoft / MSFT 255,877 30.50 17% 20,596 4% <1% 6% 11x 10x 6.1x
2 Wal-Mart / WMT 211,989 61.90 4% 9,589 4% <1% 6% 14x 13x 4.5x
3 Aon / AON 15,699 48.56 4% 11,258 6% 3% 5% 14x 12x n/m
4 Coca-Cola / KO 154,308 67.94 -3% 8,035 4% <1% 5% 17x 15x >9.9x
5 Ecolab / ECL 18,384 61.20 6% 7,966 9% 3% 5% 24x 20x >9.9x
6 Comcast / CMCSA 73,362 27.18 15% 17,933 -19% <1% 5% 18x 15x n/m
7 Praxair / PX 32,122 107.16 0% 4,197 3% 1% 4% 18x 16x >9.9x
8 UnitedHealth / UNH 55,718 53.32 5% 8,018 5% <1% 4% 11x 10x 2.0x
9 3M / MMM 61,072 87.14 7% 4,881 7% <1% 4% 14x 13x 8.9x
10 News Corp. / NWSA 47,979 19.18 8% 21,095 -11% <1% 4% 14x 11x >9.9x


New Positions Sold Out Positions
Charles Schwab / SCHW
Oracle / ORCL
American Public Ed. / APEI
CNA Financial / CNA
Exxon Mobil / XOM
Intel / INTC
Molex / MOLX
Nalco Holding / NLC


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $10 billion
Top 10 as % of portfolio 49%
Median market value $26 billion
Average market value $67 billion
Median P/E (this FY) 14x
Median P/E (next FY) 13x
Median P / tangible book 2.5x
*
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.

Financial
24%
Services
23%
Consumer Non-
Cyclical
20%
Other
33%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Calpine / CPN 7,840 16.07 -2% 367 0% <1% 9% >99x 89x 1.8x
2 Macquarie Infrastr. / MIC 1,331 28.73 3% 373 0% <1% 16% 10x 14x n/m
3 Packaging Corp. / PKG 2,888 29.04 15% 223 0% <1% 10% 15x 13x 3.2x
4 Rockwood Holdings / ROC 4,155 54.02 37% 194 3% <1% 16% 14x 13x n/m
5 Delphi Automotive / DLPH 9,861 30.04 39% 58 new <1% 3% 8x 7x 9.0x
6 Globe Specialty / GSM 1,063 14.16 6% 375 1% <1% 8% 16x 12x 2.4x
7 Innophos / IPHS 1,053 48.69 0% 117 0% <1% 8% 13x 12x 3.6x
8 Rock-Tenn / RKT 4,803 68.04 18% 48 0% <1% 5% 13x 9x 6.2x
9 Spansion / CODE 779 13.07 58% 164 0% <1% 3% 14x 9x 4.4x
10 Black Diamond / BDE 177 8.15 9% 64 0% <1% 1% 51x 82x 2.2x


Top Holdings of Eagle Value – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Macquarie Infrastr. / MIC 1,331 28.73 3% 373 0% <1% 16% 10x 14x n/m
2 Rockwood Holdings / ROC 4,155 54.02 37% 194 3% <1% 16% 14x 13x n/m
3 Six Flags / SIX 2,591 47.08 14% 221 -23% <1% 15% 84x 64x n/m
4 Packaging Corp. / PKG 2,888 29.04 15% 223 0% <1% 10% 15x 13x 3.2x
5 Calpine / CPN 7,840 16.07 -2% 367 0% <1% 9% >99x 89x 1.8x
6 Innophos / IPHS 1,053 48.69 0% 117 0% <1% 8% 13x 12x 3.6x
7 Globe Specialty / GSM 1,063 14.16 6% 375 1% <1% 8% 16x 12x 2.4x
8 Rock-Tenn / RKT 4,803 68.04 18% 48 0% <1% 5% 13x 9x 6.2x
9 Spansion / CODE 779 13.07 58% 164 0% <1% 3% 14x 9x 4.4x
10 Delphi Automotive / DLPH 9,861 30.04 39% 58 new <1% 3% 8x 7x 9.0x


New Positions Sold Out Positions
Delphi Automotive / DLPH AbitibiBowater / ABH
Capital One / COF



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $67 million
Top 10 as % of portfolio 92%
Median market value $1.5 billion
Average market value $3.8 billion
Median P/E (this FY) 14x
Median P/E (next FY) 12x
Median P / tangible book 3.2x
*
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.


Basic Materials
53%
Services
20%
Transportation
17%
Other
10%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Applied Materials / AMAT 16,761 12.95 21% 16,498 4% 1% 9% 17x 11x 2.3x
2 General Dynamics / GD 25,035 70.30 6% 1,393 -16% <1% 4% 10x 9x n/m
3 Cisco Systems / CSCO 106,953 19.90 10% 17,626 -12% <1% 14% 11x 10x 3.5x
4 Zimmer Holdings / ZMH 10,901 60.84 14% 3,249 -12% 2% 8% 12x 11x 5.2x
5 D.R. Horton / DHI 4,541 14.33 14% 19,577 -13% 6% 12% 29x 18x 1.7x
6 Illinois Tool Works / ITW 26,919 55.71 19% 5,421 -3% 1% 12% 13x 12x >9.9x
7 Petroleo Brasileiro / PBR 186,029 29.57 19% 11,176 -5% <1% 14% 9x 8x 1.5x
8 Microsoft / MSFT 255,877 30.50 17% 9,853 -9% <1% 12% 11x 10x 6.1x
9 Intel / INTC 135,931 26.70 10% 8,111 -40% <1% 9% 11x 10x 4.5x
10 Wal-Mart / WMT 211,989 61.90 4% 19 new <1% 0% 14x 13x 4.5x


Top Holdings of Edinburgh Partners – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Cisco Systems / CSCO 106,953 19.90 10% 17,626 -12% <1% 14% 11x 10x 3.5x
2 Petroleo Brasileiro / PBR 186,029 29.57 19% 11,176 -5% <1% 14% 9x 8x 1.5x
3 Illinois Tool Works / ITW 26,919 55.71 19% 5,421 -3% 1% 12% 13x 12x >9.9x
4 Microsoft / MSFT 255,877 30.50 17% 9,853 -9% <1% 12% 11x 10x 6.1x
5 D.R. Horton / DHI 4,541 14.33 14% 19,577 -13% 6% 12% 29x 18x 1.7x
6 Intel / INTC 135,931 26.70 10% 8,111 -40% <1% 9% 11x 10x 4.5x
7 Applied Materials / AMAT 16,761 12.95 21% 16,498 4% 1% 9% 17x 11x 2.3x
8 Zimmer Holdings / ZMH 10,901 60.84 14% 3,249 -12% 2% 8% 12x 11x 5.2x
9 Bank of America / BAC 81,797 8.07 45% 14,469 -10% <1% 5% 11x 7x .6x
10 General Dynamics / GD 25,035 70.30 6% 1,393 -16% <1% 4% 10x 9x n/m


New Positions Sold Out Positions
Virgin Media / VMED
Wal-Mart / WMT
SK Telecom / SKM


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $2.4 billion
Top 10 as % of portfolio 99%
Median market value $26 billion
Average market value $77 billion
Median P/E (this FY) 11x
Median P/E (next FY) 10x
Median P / tangible book 2.9x
*
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.

Technology
45%
Capital Goods
28%
Energy
14%
Other
14%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 iStar Financial / SFI 659 6.96 32% 2,695 41% 3% 0% n/m n/m .4x
2 AutoNation / AN 4,767 36.11 -2% 54,410 -12% 41% 29% 16x 15x 7.5x
3 Capital One / COF 22,193 48.28 14% 5,094 -14% 1% 4% 8x 7x 1.4x
4 Big Lots / BIG 2,887 44.00 17% 1,653 -12% 3% 1% 15x 13x 3.9x
5 Gap / GPS 10,543 21.59 16% 31,172 -14% 6% 10% 14x 12x 4.2x
6 CIT Group / CIT 8,357 41.65 19% 5,135 -11% 3% 3% 30x 18x 1.0x
7 Genworth Financial / GNW 4,288 8.74 33% 9,412 -13% 2% 1% 7x 5x .3x
8 AutoZone / AZO 13,937 354.10 9% 2,969 -67% 8% 15% 15x 13x n/m
9 Sears Holdings / SHLD 5,084 47.57 50% 48,031 0% 45% 34% n/m n/m 1.6x

Top Holdings of ESL Investments – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Sears Holdings / SHLD 5,084 47.57 50% 48,031 0% 45% 34% n/m n/m 1.6x
2 AutoNation / AN 4,767 36.11 -2% 54,410 -12% 41% 29% 16x 15x 7.5x
3 AutoZone / AZO 13,937 354.10 9% 2,969 -67% 8% 15% 15x 13x n/m
4 Gap / GPS 10,543 21.59 16% 31,172 -14% 6% 10% 14x 12x 4.2x
5 Capital One / COF 22,193 48.28 14% 5,094 -14% 1% 4% 8x 7x 1.4x
6 CIT Group / CIT 8,357 41.65 19% 5,135 -11% 3% 3% 30x 18x 1.0x
7 Seagate Technology / STX 11,754 26.20 60% 6,977 -28% 2% 3% 4x 3x 4.9x
8 Genworth Financial / GNW 4,288 8.74 33% 9,412 -13% 2% 1% 7x 5x .3x
9 Big Lots / BIG 2,887 44.00 17% 1,653 -12% 3% 1% 15x 13x 3.9x
10 iStar Financial / SFI 659 6.96 32% 2,695 41% 3% 0% n/m n/m .4x


New Positions Sold Out Positions
None Cisco Systems / CSCO
Wells Fargo / WFC


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $6.8 billion
Top 10 as % of portfolio 100%
Median market value $9.4 billion
Average market value $29 billion
Median P/E (this FY) 12x
Median P/E (next FY) 11x
Median P / tangible book 1.8x
*
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.

Services
89%
Financial
8%
Technology
3%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Intel / INTC 135,931 26.70 10% 11,500 new <1% 14% 11x 10x 4.5x
2 Johnson & Johnson / JNJ 176,413 64.60 -1% 5,947 15% <1% 18% 13x 12x 6.5x
3 Overstock.com / OSTK 162 6.96 -11% 3,389 0% 15% 1% n/m n/m >9.9x
4 Research In Motion / RIMM 8,087 15.44 6% 12,798 8% 2% 9% n/a n/a 1.1x
5 AbitibiBowater / ABH 1,545 15.28 5% 17,504 0% 17% 12% 10x 6x .5x
6 Level 3 Comms / LVLT 4,392 21.15 24% 12,931 0% 6% 13% n/m n/m n/m
7 Frontier Comms / FTR 4,020 4.04 -22% 18,620 0% 2% 3% 17x 16x n/m
8 Baldwin & Lyons / BWINB 338 22.72 4% 970 0% 7% 1% 15x 18x 1.1x
9 U.S. Bancorp / USB 55,363 29.01 7% 4,448 0% <1% 6% 11x 10x 2.8x
10 Wells Fargo / WFC 159,577 30.26 10% 4,512 0% <1% 6% 9x 8x 1.8x


Top Holdings of Fairfax – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Johnson & Johnson / JNJ 176,413 64.60 -1% 5,947 15% <1% 18% 13x 12x 6.5x
2 Intel / INTC 135,931 26.70 10% 11,500 new <1% 14% 11x 10x 4.5x
3 Level 3 Comms / LVLT 4,392 21.15 24% 12,931 0% 6% 13% n/m n/m n/m
4 AbitibiBowater / ABH 1,545 15.28 5% 17,504 0% 17% 12% 10x 6x .5x
5 Research In Motion / RIMM 8,087 15.44 6% 12,798 8% 2% 9% n/a n/a 1.1x
6 Dell / DELL 31,888 17.75 21% 9,152 -60% <1% 7% 8x 9x >9.9x
7 Wells Fargo / WFC 159,577 30.26 10% 4,512 0% <1% 6% 9x 8x 1.8x
8 U.S. Bancorp / USB 55,363 29.01 7% 4,448 0% <1% 6% 11x 10x 2.8x
9 USG / USG 1,473 13.99 38% 6,794 0% 6% 4% n/m n/m 9.4x
10 Frontier Comms / FTR 4,020 4.04 -22% 18,620 0% 2% 3% 17x 16x n/m


New Positions Sold Out Positions
Intel / INTC None


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $2.2 billion
Top 10 as % of portfolio 93%
Median market value $4.2 billion
Average market value $38 billion
Median P/E (this FY) 12x
Median P/E (next FY) 12x
Median P / tangible book 1.8x
*
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.
**
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.

Technology
31%
Services
19%
Health Care
18%
Other
33%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Fairholme (Bruce Berkowitz)
Bruce Berkowitz, manager of The Fairholme Fund, was one of the most successful value-oriented investors of the decade
from 2000-2010. Berkowitz is a contrarian who favors companies with strong free cash flow generation as well as companies
that are deeply undervalued based on assets. Fairholme runs concentrated, highly volatile equity portfolios.

MOI Signal Rank™ – Top Current Ideas of Fairholme
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Bank of America / BAC 81,797 8.07 45% 112,753 1% 1% 12% 11x 7x .6x
2 Wells Fargo / WFC 159,577 30.26 10% 850 87% <1% 0% 9x 8x 1.8x
3 MBIA / MBI 2,303 11.92 3% 46,531 -4% 24% 7% n/m 13x 1.0x
4 St. Joe / JOE 1,489 16.14 10% 26,185 -1% 28% 5% n/m n/m 1.7x
5 AIG / AIG 50,633 26.66 15% 116,574 -7% 6% 39% 35x 11x .6x
6 Berkshire Hathaway / BRK.A 194,903 117,980 3% 6 -35% <1% 9% 17x 15x 2.0x
7 CIT Group / CIT 8,357 41.65 19% 18,617 -4% 9% 10% 30x 18x 1.0x
8 Leucadia National / LUK 7,137 29.18 28% 18,279 -1% 7% 7% n/a n/a 1.2x
9 Assured Guaranty / AGO 3,189 17.50 33% 52 0% <1% 0% 6x 6x .7x

Top Holdings of Fairholme – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 AIG / AIG 50,633 26.66 15% 116,574 -7% 6% 39% 35x 11x .6x
2 Bank of America / BAC 81,797 8.07 45% 112,753 1% 1% 12% 11x 7x .6x
3 CIT Group / CIT 8,357 41.65 19% 18,617 -4% 9% 10% 30x 18x 1.0x
4 Sears Holdings / SHLD 5,084 47.57 50% 16,108 -1% 15% 10% n/m n/m 1.6x
5 Berkshire Hathaway / BRK.A 194,903 117,980 3% 6 -35% <1% 9% 17x 15x 2.0x
6 MBIA / MBI 2,303 11.92 3% 46,531 -4% 24% 7% n/m 13x 1.0x
7 Leucadia National / LUK 7,137 29.18 28% 18,279 -1% 7% 7% n/a n/a 1.2x
8 St. Joe / JOE 1,489 16.14 10% 26,185 -1% 28% 5% n/m n/m 1.7x
9 Citigroup / C 96,263 32.93 25% 2,110 -92% <1% 1% 8x 7x .7x
10 Wells Fargo / WFC 159,577 30.26 10% 850 87% <1% 0% 9x 8x 1.8x

New Positions Sold Out Positions
Goldman Sachs / GS
JPMorgan Chase / JPM
AT&T / T
Banco Santander / STD
Brookfield Asset / BAM
Royal Dutch Shell / RDS.A
Telefonica / TEF
Verizon / VZ
Vodafone / VOD
Winthrop Realty / FUR
Regions Financial / RF

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $7.9 billion
Top 10 as % of portfolio 99%
Median market value $56 billion
Average market value $72 billion
Median P/E (this FY) 10x
Median P/E (next FY) 9x
Median P / tangible book 1.2x
*
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.

Financial
78%
Services
15%
Conglomerates
7%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 CSX Corp. / CSX 23,152 22.05 5% 685 new <1% 4% 12x 10x 2.7x
2 iStar Financial / SFI 659 6.96 32% 3,591 49% 4% 7% n/m n/m .4x
3 Sears Holdings / SHLD 5,084 47.57 50% 1,308 74% 1% 16% n/m n/m 1.6x
4 State Auto Financial / STFC 499 12.38 -9% 164 >100% <1% 1% n/m 21x .8x
5 Williams-Sonoma / WSM 3,790 36.84 -4% 188 new <1% 2% 17x 15x 3.0x
6 Alexander & Baldwin / ALEX 1,966 47.14 15% 379 25% <1% 5% 46x 25x 1.7x
7 Staples / SPLS 10,324 14.76 6% 377 new <1% 1% 11x 10x 4.0x
8 Lowe’s / LOW 33,932 27.09 7% 461 new <1% 3% 17x 15x 2.0x
9 Can. Pacific Railway / CP 12,742 74.63 10% 156 new <1% 3% n/a n/a 2.8x
10 Ashford Hospitality / AHT 628 9.23 15% 304 >100% <1% 1% n/a n/a .6x

Top Holdings of Force Capital Management – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Sears Holdings / SHLD 5,084 47.57 50% 1,308 74% 1% 16% n/m n/m 1.6x
2 First Indust. Realty / FR 1,019 11.76 15% 3,023 -5% 3% 9% n/m n/m 1.0x
3 iStar Financial / SFI 659 6.96 32% 3,591 49% 4% 7% n/m n/m .4x
4 Copart / CPRT 3,025 46.47 -3% 514 -46% <1% 6% 18x 16x 8.7x
5 Charter Comms / CHTR 6,306 58.59 3% 388 -14% <1% 6% n/m >99x n/m
6 Bank of America / BAC 81,797 8.07 45% 2,267 -10% <1% 5% 11x 7x .6x
7 Alexander & Baldwin / ALEX 1,966 47.14 15% 379 25% <1% 5% 46x 25x 1.7x
8 Eagle Materials / EXP 1,456 32.40 26% 538 6% 1% 5% 53x 26x 4.7x
9 SL Green Realty / SLG 6,674 74.83 12% 215 -9% <1% 4% >99x 95x 1.2x
10 CSX Corp. / CSX 23,152 22.05 5% 685 new <1% 4% 12x 10x 2.7x


New Positions Sold Out Positions
C.H. Robinson / CHRW
Can. Pacific Railway / CP
CSX Corp. / CSX
Gaylord Entertain. / GET
General Growth / GGP
Hartford Financial / HIG
J.B. Hunt / JBHT
Liz Claiborne / LIZ
Lowe’s / LOW
News Corp. / NWSA
SodaStream / SODA
Staples / SPLS
Walt Disney / DIS
Williams-Sonoma / WSM
Asbury Automotive / ABG
AutoNation / AN
Barnes & Noble / BKS
Equinix / EQIX
Huntington Ingalls / HII
Iron Mountain / IRM
J.C. Penney / JCP
Lamar Advertising / LAMR
Shutterfly / SFLY
TransDigm / TDG
WABCO Holdings / WBC
Winthrop Realty / FUR

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $384 million
Top 10 as % of portfolio 66%
Median maret value $2.0 billion
Average market value $9.3 billion
Median P/E (this FY) 17x
Median P/E (next FY) 16x
Median P / tangible book 1.8x
*
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.

Services
68%
Transportation
14%
Financial
8%
Other
10%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Nortek / NTK 453 30.07 15% 1,880 new 12% 6% n/a n/a n/m
2 Ashland / ASH 5,019 64.10 12% 935 6% 1% 6% 11x 9x n/m
3 Quanex Building / NX 653 17.77 18% 3,261 2% 9% 6% 32x 20x 2.3x
4 Zimmer Holdings / ZMH 10,901 60.84 14% 748 89% <1% 5% 12x 11x 5.2x
5 Darling / DAR 1,859 15.88 19% 3,582 >100% 3% 6% 10x 11x >9.9x
6 GeoMet / GMET 28 0.71 -24% 2,242 8% 6% 0% 14x 4x .6x
7 Richardson Electron. / RELL 210 12.39 1% 1,118 50% 7% 1% 33x 26x 1.0x
8 Xylem / XYL 4,996 27.07 5% 882 new <1% 3% 14x 14x n/m
9 Vishay Precision / VPG 209 15.63 -2% 1,212 0% 9% 2% 19x 14x 1.2x
10 ITT Corp. / ITT 2,096 22.60 17% 898 new <1% 2% 14x 13x n/m

Top Holdings of Gates Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Solutia / SOA 3,419 27.97 62% 4,348 -13% 4% 13% 13x 11x n/m
2 W.R. Grace / GRA 4,048 54.83 19% 1,267 -23% 2% 8% 13x 12x >9.9x
3 DaVita / DVA 7,851 83.97 11% 761 -27% <1% 7% 17x 14x n/m
4 Ashland / ASH 5,019 64.10 12% 935 6% 1% 6% 11x 9x n/m
5 Quanex Building / NX 653 17.77 18% 3,261 2% 9% 6% 32x 20x 2.3x
6 Darling / DAR 1,859 15.88 19% 3,582 >100% 3% 6% 10x 11x >9.9x
7 Blount International / BLT 818 16.77 15% 3,378 -1% 7% 6% 13x 11x n/m
8 Nortek / NTK 453 30.07 15% 1,880 new 12% 6% n/a n/a n/m
9 Snap-on / SNA 3,548 60.98 20% 890 -18% 2% 6% 13x 11x 6.5x
10 Zimmer Holdings / ZMH 10,901 60.84 14% 748 89% <1% 5% 12x 11x 5.2x


New Positions Sold Out Positions
E.W. Scripps / SSP
ITT Corp. / ITT
Nortek / NTK
Xylem / XYL
C.R. Bard / BCR

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $924 million
Top 10 as % of portfolio 70%
Median market value $1.9 billion
Average market value $3.0 billion
Median P/E (this FY) 14x
Median P/E (next FY) 13x
Median P / tangible book 1.9x
*
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.

Basic Materials
33%
Capital Goods
27%
Services
13%
Other
28%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Citigroup / C 96,263 32.93 25% 8,561 >100% <1% 5% 8x 7x .7x
2 Crown Castle / CCI 14,029 49.31 10% 7,232 12% 3% 6% 62x 43x n/m
3 Thermo Fisher / TMO 21,002 55.52 23% 4,649 8% 1% 4% 12x 11x n/m
4 Take-Two / TTWO 1,415 15.80 17% 5,619 >100% 6% 1% n/m 6x 5.1x
5 Quest Diagnostics / DGX 9,078 57.54 -1% 1,046 new <1% 1% 13x 11x n/m
6 HCA / HCA 12,149 27.83 26% 8,770 12% 2% 4% 8x 7x n/m
7 Openwave Systems / OPWV 181 2.10 33% 2,568 >100% 3% 0% n/m n/m 5.0x
8 Lab Corp. of America / LH 8,922 90.03 5% 1,082 41% 1% 2% 14x 13x n/m
9 Sprint Nextel / S 6,860 2.29 -2% 11,049 24% <1% 0% n/m n/m n/m
10 Xerox / XRX 10,986 7.92 -1% 25,382 7% 2% 3% 7x 6x >9.9x


Top Holdings of Glenview Capital – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Life Technologies / LIFE 8,830 49.55 27% 13,781 -3% 8% 12% 12x 11x 1.9x
2 McKesson / MCK 20,018 81.34 4% 4,613 -22% 2% 6% 13x 11x >9.9x
3 Crown Castle / CCI 14,029 49.31 10% 7,232 12% 3% 6% 62x 43x n/m
4 Citigroup / C 96,263 32.93 25% 8,561 >100% <1% 5% 8x 7x .7x
5 Thermo Fisher / TMO 21,002 55.52 23% 4,649 8% 1% 4% 12x 11x n/m
6 Flextronics / FLEX 4,785 6.97 23% 36,934 -11% 5% 4% 8x 7x 2.3x
7 HCA / HCA 12,149 27.83 26% 8,770 12% 2% 4% 8x 7x n/m
8 Tyco International / TYC 22,703 49.25 5% 4,475 -24% <1% 4% 14x 12x >9.9x
9 BMC Software / BMC 6,446 39.25 20% 5,409 -4% 3% 4% 12x 11x n/m
10 Fidelity National / FIS 8,580 28.65 8% 7,325 -8% 2% 4% 13x 11x n/m


New Positions Sold Out Positions
Oracle / ORCL
Quest Diagnostics / DGX
Agilent Technologies / A
Coca-Cola Enterprise / CCE
Comcast / CMCSA
Corning / GLW
DaVita / DVA
Goldman Sachs / GS
Morgan Stanley / MS
Pfizer / PFE
Pharma Product / PPDI
Wyndham / WYN


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $5.9 billion
Top 10 as % of portfolio 52%
Median market value $12 billion
Average market value $22 billion
Median P/E (this FY) 12x
Median P/E (next FY) 11x
Median P / tangible book 2.3x
*
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.

Health Care
30%
Services
22%
Technology
19%
Other
29%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 CBS / CBS 19,597 29.90 10% 469 new <1% 12% 16x 13x n/m
2 Tenet Healthcare / THC 2,819 5.72 12% 12,257 -9% 2% 61% 13x 12x >9.9x
3 American Capital / ACAS 2,996 8.69 29% 1,530 -17% <1% 11% 11x 10x .7x
4 Charter Comms / CHTR 6,306 58.59 3% 66 -85% <1% 3% n/m >99x n/m
5 Gannett / GCI 3,481 14.61 9% 993 -81% <1% 13% 7x 7x n/m


Top Holdings of GoldenTree Asset Management – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Tenet Healthcare / THC 2,819 5.72 12% 12,257 -9% 2% 61% 13x 12x >9.9x
2 Gannett / GCI 3,481 14.61 9% 993 -81% <1% 13% 7x 7x n/m
3 CBS / CBS 19,597 29.90 10% 469 new <1% 12% 16x 13x n/m
4 American Capital / ACAS 2,996 8.69 29% 1,530 -17% <1% 11% 11x 10x .7x
5 Charter Comms / CHTR 6,306 58.59 3% 66 -85% <1% 3% n/m >99x n/m


New Positions Sold Out Positions
CBS / CBS Ashland / ASH
Booz Allen Hamilton / BAH
Cedar Fair / FUN
CIT Group / CIT
CONSOL Energy / CNX
Halliburton / HAL
KKR & Co. / KKR
Penn National Gaming / PENN
Popular / BPOP
Rowan Companies / RDC
Solutia / SOA
Tenneco / TEN
TRW Automotive / TRW


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $116 million
Top 10 as % of portfolio 100%
Median maret value $4.1 billion
Average market value $6.9 billion
Median P/E (this FY) 11x
Median P/E (next FY) 10x
Median P / tangible book 2.3x
*
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.

Health Care
61%
Services
28%
Financial
11%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Devon Energy / DVN 26,112 64.65 4% 4,728 17% 1% 9% 11x 10x 1.7x
2 Lowe’s / LOW 33,932 27.09 7% 12,118 9% <1% 10% 17x 15x 2.0x
3 Air Products & Chem / APD 19,039 90.40 6% 3,459 1% 2% 10% 15x 13x 4.0x
4 FedEx / FDX 29,961 95.27 14% 4,424 1% 1% 13% 15x 13x 2.2x
5 Baker Hughes / BHI 20,785 47.62 -2% 4,517 >100% 1% 7% 10x 8x 2.3x
6 Agilent Technologies / A 15,340 44.14 26% 3,261 >100% <1% 4% 14x 13x 6.6x
7 UPS / UPS 74,005 76.69 5% 3,924 9% <1% 9% 16x 14x >9.9x
8 Rockwell Collins / COL 8,774 59.03 7% 2,355 5% 2% 4% 13x 12x >9.9x
9 RHJ International / RHJIF 392 4.66 -13% 1,877 4% 2% 0% n/a n/a n/m
10 Home Depot / HD 69,879 45.33 8% 2,094 34% <1% 3% 19x 16x 4.2x


Top Holdings of Greenhaven Associates – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 FedEx / FDX 29,961 95.27 14% 4,424 1% 1% 13% 15x 13x 2.2x
2 Lowe’s / LOW 33,932 27.09 7% 12,118 9% <1% 10% 17x 15x 2.0x
3 3M / MMM 61,072 87.14 7% 3,616 -3% <1% 10% 14x 13x 8.9x
4 Air Products & Chem / APD 19,039 90.40 6% 3,459 1% 2% 10% 15x 13x 4.0x
5 Devon Energy / DVN 26,112 64.65 4% 4,728 17% 1% 9% 11x 10x 1.7x
6 UPS / UPS 74,005 76.69 5% 3,924 9% <1% 9% 16x 14x >9.9x
7 Baker Hughes / BHI 20,785 47.62 -2% 4,517 >100% 1% 7% 10x 8x 2.3x
8 Equitable Resources / EQT 7,324 49.01 -11% 3,159 -2% 2% 5% 21x 16x 2.1x
9 Agilent Technologies / A 15,340 44.14 26% 3,261 >100% <1% 4% 14x 13x 6.6x
10 Rockwell Collins / COL 8,774 59.03 7% 2,355 5% 2% 4% 13x 12x >9.9x


New Positions Sold Out Positions
Am. Independence / AMIC
Lennox International / LII
Mohawk Industries / MHK
None


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $3.2 billion
Top 10 as % of portfolio 82%
Median market value $16 billion
Average market value $30 billion
Median P/E (this FY) 15x
Median P/E (next FY) 13x
Median P / tangible book 3.3x
*
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.

Transportation
24%
Energy
17%
Services
14%
Other
46%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Einstein Noah / BAGL 236 14.05 -11% 10,733 0% 64% 3% 18x 16x >9.9x
2 BioFuel Energy / BIOF 77 0.63 -7% 27,169 0% 22% 0% n/a n/a .9x
3 General Motors / GM 39,896 25.50 26% 19,009 29% 1% 9% 7x 7x n/m
4 Apple / AAPL 460,050 493.42 22% 1,464 11% <1% 13% 12x 10x 5.4x
5 Dell / DELL 31,888 17.75 21% 14,100 new <1% 4% 8x 9x >9.9x
6 Microsoft / MSFT 255,877 30.50 17% 15,171 0% <1% 8% 11x 10x 6.1x
7 Delphi Automotive / DLPH 9,861 30.04 39% 8,195 new 2% 4% 8x 7x 9.0x
8 Seagate Technology / STX 11,754 26.20 60% 14,449 0% 3% 7% 4x 3x 4.9x
9 Xerox / XRX 10,986 7.92 -1% 16,952 new 1% 2% 7x 6x >9.9x
10 Liberty Media / LMCA 10,589 85.15 9% 980 new <1% 1% 33x 51x 2.6x

Top Holdings of Greenlight – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Apple / AAPL 460,050 493.42 22% 1,464 11% <1% 13% 12x 10x 5.4x
2 General Motors / GM 39,896 25.50 26% 19,009 29% 1% 9% 7x 7x n/m
3 Microsoft / MSFT 255,877 30.50 17% 15,171 0% <1% 8% 11x 10x 6.1x
4 Seagate Technology / STX 11,754 26.20 60% 14,449 0% 3% 7% 4x 3x 4.9x
5 CareFusion / CFN 5,716 25.43 0% 12,153 -5% 5% 5% 14x 13x 4.5x
6 Ensco / ESV 12,869 55.80 19% 5,052 9% 2% 5% 18x 10x 1.7x
7 Marvell Technology / MRVL 9,365 16.05 16% 17,374 4% 3% 5% 13x 14x 3.3x
8 Dell / DELL 31,888 17.75 21% 14,100 new <1% 4% 8x 9x >9.9x
9 Delphi Automotive / DLPH 9,861 30.04 39% 8,195 new 2% 4% 8x 7x 9.0x
10 NCR / NCR 3,332 21.14 28% 9,611 -3% 6% 4% 9x 8x n/m


New Positions Sold Out Positions
CA / CA
Dell / DELL
Delphi Automotive / DLPH
DST Systems / DST
Liberty Media / LMCA
OmniVision / OVTI
Research In Motion / RIMM
Tessera Technologies / TSRA
Xerox / XRX
Yahoo! / YHOO
Becton Dickinson / BDX
CVS Caremark / CVS
Employers Holdings / EIG
Ingram Micro / IM
LyondellBasell / LYB
Marathon Oil / MRO
SemGroup / SEMG
Synaptics / SYNA

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $5.6 billion
Top 10 as % of portfolio 64%
Median market value $6.3 billion
Average market value $26 billion
Median P/E (this FY) 13x
Median P/E (next FY) 11x
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.

Technology
46%
Services
16%
Consumer
Cyclical
13%
Other
25%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Sealy Corp. / ZZ 153 1.52 -12% 14,616 0% 14% 3% 76x 19x n/m
2 Boyd Gaming / BYD 786 9.10 22% 3,400 2% 4% 4% >99x 34x 1.8x
3 Cumulus Media / CMLS 536 3.79 13% 677 0% <1% 0% 8x 7x n/m
4 Six Flags / SIX 2,591 47.08 14% 13,310 0% 24% 84% 84x 64x n/m
5 W.R. Grace / GRA 4,048 54.83 19% 1,110 0% 2% 8% 13x 12x >9.9x


Top Holdings of H Partners – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Six Flags / SIX 2,591 47.08 14% 13,310 0% 24% 84% 84x 64x n/m
2 W.R. Grace / GRA 4,048 54.83 19% 1,110 0% 2% 8% 13x 12x >9.9x
3 Boyd Gaming / BYD 786 9.10 22% 3,400 2% 4% 4% >99x 34x 1.8x
4 Sealy Corp. / ZZ 153 1.52 -12% 14,616 0% 14% 3% 76x 19x n/m
5 Cumulus Media / CMLS 536 3.79 13% 677 0% <1% 0% 8x 7x n/m


New Positions Sold Out Positions
None Leap Wireless / LEAP
Pulte Homes / PHM



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $743 million
Top 10 as % of portfolio 100%
Median market value $786 million
Average market value $1.7 billion
Median P/E (this FY) 40x
Median P/E (next FY) 18x
Median P / tangible book 1.8x
*
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.

Services
89%
Basic Materials
8%
Consumer
Cyclical
3%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 N.A. Energy Partners / NOA 193 5.34 -17% 7,032 2% 19% 2% n/a n/a 1.7x
2 Spectrum Brands / SPB 1,497 28.91 6% 28,066 0% 54% 50% 12x 10x n/m
3 Crosstex Energy / XTXI 626 13.26 5% 7,000 0% 15% 6% n/m n/m n/m
4 Cliffs Natural / CLF 10,519 73.55 18% 450 0% <1% 2% 6x 7x 2.4x
5 Harbinger Group / HRG 680 4.88 22% 117,425 0% 84% 35% n/a n/a n/m
6 EXCO Resources / XCO 1,514 7.05 -33% 3,500 30% 2% 2% 11x 15x 1.0x
7 Calpine / CPN 7,840 16.07 -2% 676 0% <1% 1% >99x 89x 1.8x
8 Presidential Life / PLFE 337 11.38 14% 546 0% 2% 0% n/a n/a .4x
9 General Moly / GMO 331 3.64 18% 1,398 0% 2% 0% n/m n/m 2.3x
10 Owens Corning / OC 4,092 33.85 18% 475 0% <1% 1% 16x 12x 2.7x


Top Holdings of Harbinger Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Spectrum Brands / SPB 1,497 28.91 6% 28,066 0% 54% 50% 12x 10x n/m
2 Harbinger Group / HRG 680 4.88 22% 117,425 0% 84% 35% n/a n/a n/m
3 Crosstex Energy / XTXI 626 13.26 5% 7,000 0% 15% 6% n/m n/m n/m
4 N.A. Energy Partners / NOA 193 5.34 -17% 7,032 2% 19% 2% n/a n/a 1.7x
5 Cliffs Natural / CLF 10,519 73.55 18% 450 0% <1% 2% 6x 7x 2.4x
6 EXCO Resources / XCO 1,514 7.05 -33% 3,500 30% 2% 2% 11x 15x 1.0x
7 Owens Corning / OC 4,092 33.85 18% 475 0% <1% 1% 16x 12x 2.7x
8 Calpine / CPN 7,840 16.07 -2% 676 0% <1% 1% >99x 89x 1.8x
9 Presidential Life / PLFE 337 11.38 14% 546 0% 2% 0% n/a n/a .4x
10 General Moly / GMO 331 3.64 18% 1,398 0% 2% 0% n/m n/m 2.3x


New Positions Sold Out Positions
None CVR Energy / CVI
Forest Oil Corp. / FST
Huntsman / HUN
Lone Pine Resources / LPR
Research In Motion / RIMM
WD-40 Company / WDFC

Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $1.6 billion
Top 10 as % of portfolio 99%
Median market value $1.5 billion
Average market value $2.8 billion
Median P/E (this FY) 12x
Median P/E (next FY) 12x
Median P / tangible book 1.7x
*
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.
**
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.

Technology
54%
Financial
38%
Energy
4%
Other
4%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Blyth / BTH 521 63.40 12% 279 68% 3% 20% n/a n/a 2.9x
2 Sycamore Networks / SCMR 570 19.84 11% 320 new 1% 7% n/m n/m 1.3x
3 Talbots / TLB 222 3.15 18% 2,977 9% 4% 11% n/m n/m >9.9x
4 Westport Innovations / WPRT 2,140 44.06 33% 69 new <1% 3% n/a n/a >9.9x
5 Abercrombie & Fitch / ANF 3,874 45.07 -8% 200 0% <1% 10% 19x 13x 2.0x
6 Frozen Food Express / FFEX 21 1.20 -7% 1,872 0% 11% 3% n/a n/a .4x
7 AnnTaylor Stores / ANN 1,239 23.65 -5% 206 0% <1% 5% 14x 12x 2.8x
8 Electronic Arts / EA 5,773 17.42 -15% 203 -31% <1% 4% 20x 15x >9.9x
9 XO Group / XOXO 251 8.77 5% 887 0% 3% 9% 58x 32x 2.3x
10 Ingram Micro / IM 2,971 19.37 6% 661 0% <1% 14% 10x 8x .9x


Top Holdings of Hawkshaw Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Blyth / BTH 521 63.40 12% 279 68% 3% 20% n/a n/a 2.9x
2 Ingram Micro / IM 2,971 19.37 6% 661 0% <1% 14% 10x 8x .9x
3 Talbots / TLB 222 3.15 18% 2,977 9% 4% 11% n/m n/m >9.9x
4 Abercrombie & Fitch / ANF 3,874 45.07 -8% 200 0% <1% 10% 19x 13x 2.0x
5 XO Group / XOXO 251 8.77 5% 887 0% 3% 9% 58x 32x 2.3x
6 Sycamore Networks / SCMR 570 19.84 11% 320 new 1% 7% n/m n/m 1.3x
7 Aviat Networks / AVNW 144 2.35 28% 2,182 0% 4% 6% >99x 12x .9x
8 Symantec / SYMC 12,970 17.78 14% 288 -50% <1% 6% 11x 10x n/m
9 AnnTaylor Stores / ANN 1,239 23.65 -5% 206 0% <1% 5% 14x 12x 2.8x
10 Electronic Arts / EA 5,773 17.42 -15% 203 -31% <1% 4% 20x 15x >9.9x


New Positions Sold Out Positions
Sycamore Networks / SCMR CIBER / CBR
Dell / DELL



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $89 million
Top 10 as % of portfolio 92%
Median maret value $570 million
Average market value $4.2 billion
Median P/E (this FY) 17x
Median P/E (next FY) 12x
Median P / tangible book 2.1x
*
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.

Technology
39%
Services
35%
Consumer Non-
Cyclical
20%
Other
6%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Google / GOOG 197,003 605.91 -6% 85 68% <1% 7% 14x 12x 4.0x
2 Valeant Pharma / VRX 14,310 47.91 3% 1,988 7% <1% 13% n/a n/a n/m
3 General Motors / GM 39,896 25.50 26% 1,380 new <1% 5% 7x 7x n/m
4 Sherwin-Williams / SHW 10,207 98.37 10% 457 98% <1% 6% 17x 15x >9.9x
5 Kronos Worldwide / KRO 2,719 23.46 30% 1,619 63% 1% 5% 9x 8x 3.1x
6 Groupon / GRPN 13,413 21.03 2% 451 new <1% 1% 70x 27x >9.9x
7 Williams Companies / WMB 17,128 29.06 8% 961 new <1% 4% 19x 20x 2.2x
8 Level 3 Comms / LVLT 4,392 21.15 24% 2,106 30% 1% 6% n/m n/m n/m
9 Molycorp / MCP 2,238 26.68 11% 330 new <1% 1% 18x 10x 2.6x
10 Ascent Media / ASCMA 699 47.11 -7% 688 3% 5% 5% n/m n/m n/m


Top Holdings of Hound Partners – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Valeant Pharma / VRX 14,310 47.91 3% 1,988 7% <1% 13% n/a n/a n/m
2 W.R. Grace / GRA 4,048 54.83 19% 1,686 -2% 2% 13% 13x 12x >9.9x
3 Carter’s / CRI 2,504 42.73 7% 1,399 -11% 2% 8% 22x 18x 9.0x
4 Google / GOOG 197,003 605.91 -6% 85 68% <1% 7% 14x 12x 4.0x
5 Ensco / ESV 12,869 55.80 19% 913 -28% <1% 7% 18x 10x 1.7x
6 Sherwin-Williams / SHW 10,207 98.37 10% 457 98% <1% 6% 17x 15x >9.9x
7 Level 3 Comms / LVLT 4,392 21.15 24% 2,106 30% 1% 6% n/m n/m n/m
8 TransDigm / TDG 5,886 116.19 21% 329 -15% <1% 5% 19x 17x n/m
9 Kronos Worldwide / KRO 2,719 23.46 30% 1,619 63% 1% 5% 9x 8x 3.1x
10 General Motors / GM 39,896 25.50 26% 1,380 new <1% 5% 7x 7x n/m


New Positions Sold Out Positions
Angie’s List / ANGI
General Motors / GM
Groupon / GRPN
Molycorp / MCP
Williams Companies / WMB
Compass Minerals / CMP
Liberty Interactive / LINTA
Microsoft / MSFT
Theravance / THRX



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $719 million
Top 10 as % of portfolio 77%
Median maret value $5.1 billion
Average market value $28 billion
Median P/E (this FY) 17x
Median P/E (next FY) 12x
Median P / tangible book 3.1x
*
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.

Services
25%
Basic Materials
19%
Health Care
18%
Other
37%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Navistar / NAV 3,164 45.79 21% 7,251 >100% 10% 3% 8x 7x n/m
2 Dynegy / DYN 203 1.65 -40% 18,042 0% 15% 0% n/m n/m .1x
3 El Paso Corp. / EP 20,961 27.18 2% 72,279 10% 9% 16% 26x 22x 4.8x
4 Motorola Solutions / MSI 15,430 47.40 2% 38,292 0% 12% 15% 16x 14x 4.1x
5 Federal-Mogul / FDML 1,709 17.28 17% 76,385 1% 77% 11% 9x 8x n/m
6 American Railcar / ARII 605 28.32 18% 11,849 0% 55% 3% >99x 20x 2.0x
7 Mentor Graphics / MENT 1,586 14.49 7% 16,120 0% 15% 2% 14x 12x 5.8x
8 Hain Celestial / HAIN 1,773 39.98 9% 7,131 0% 16% 2% 23x 20x n/m
9 Icahn Enterprises / IEP 3,870 39.02 9% 79,238 0% 80% 25% n/a n/a 2.5x
10 WebMD Health / WBMD 1,543 27.09 -28% 5,692 >100% 10% 1% 22x 59x 3.5x

Top Holdings of Icahn Entities – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Icahn Enterprises / IEP 3,870 39.02 9% 79,238 0% 80% 25% n/a n/a 2.5x
2 El Paso Corp. / EP 20,961 27.18 2% 72,279 10% 9% 16% 26x 22x 4.8x
3 Motorola Solutions / MSI 15,430 47.40 2% 38,292 0% 12% 15% 16x 14x 4.1x
4 Federal-Mogul / FDML 1,709 17.28 17% 76,385 1% 77% 11% 9x 8x n/m
5 Motorola Mobility / MMI 11,815 39.45 2% 30,193 -10% 10% 10% 64x 34x 3.2x
6 Forest Labs / FRX 8,375 31.54 4% 26,362 1% 10% 7% 9x 27x 3.0x
7 American Railcar / ARII 605 28.32 18% 11,849 0% 55% 3% >99x 20x 2.0x
8 Navistar / NAV 3,164 45.79 21% 7,251 >100% 10% 3% 8x 7x n/m
9 Hain Celestial / HAIN 1,773 39.98 9% 7,131 0% 16% 2% 23x 20x n/m
10 Amylin Pharma / AMLN 2,512 17.17 51% 14,382 0% 10% 2% n/m n/m n/m

New Positions Sold Out Positions
CVR Energy / CVI Clorox / CLX
Vector Group / VGR


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $12 billion
Top 10 as % of portfolio 91%
Median market value $1.8 billion
Average market value $4.4 billion
Median P/E (this FY) 16x
Median P/E (next FY) 14x
Median P / tangible book 3.1x
*
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.
**
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.

Financial
29%
Consumer
Cyclical
18%
Capital Goods
17%
Other
35%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 TOTAL / TOT 127,111 53.65 5% 5,721 17% <1% 6% 8x 8x 1.7x
2 Devon Energy / DVN 26,112 64.65 4% 4,743 9% 1% 6% 11x 10x 1.7x
3 Net1 UEPS / UEPS 456 10.13 32% 12,380 0% 28% 3% 7x 9x >9.9x
4 Staples / SPLS 10,324 14.76 6% 12,586 14% 2% 4% 11x 10x 4.0x
5 Valassis Comms / VCI 1,037 23.17 20% 3,370 39% 8% 2% 9x 8x n/m
6 Nortel Inversora / NTL 35 23.90 3% 115 3% 8% 0% 6x 6x .0x
7 Seacor Holdings / CKH 2,106 96.98 9% 788 new 4% 2% 25x 16x 1.2x
8 Washington Post / WPO 3,003 389.02 3% 530 0% 7% 4% 18x 23x 5.0x
9 IAMGOLD / IAG 6,148 16.32 3% 2,588 27% <1% 1% 13x 12x 2.0x
10 Cimarex Energy / XEC 5,739 66.93 8% 856 35% <1% 1% 11x 12x 2.5x


Top Holdings of International Value Advisers – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 News Corp. / NWSA 47,979 19.18 8% 16,633 -1% <1% 7% 14x 11x >9.9x
2 TOTAL / TOT 127,111 53.65 5% 5,721 17% <1% 6% 8x 8x 1.7x
3 Devon Energy / DVN 26,112 64.65 4% 4,743 9% 1% 6% 11x 10x 1.7x
4 Microsoft / MSFT 255,877 30.50 17% 8,769 -16% <1% 6% 11x 10x 6.1x
5 Hewlett-Packard / HPQ 56,721 28.70 11% 9,186 -4% <1% 5% 7x 6x n/m
6 Dell / DELL 31,888 17.75 21% 13,571 -16% <1% 5% 8x 9x >9.9x
7 MasterCard / MA 50,284 396.14 6% 547 -15% <1% 4% 18x 15x >9.9x
8 Washington Post / WPO 3,003 389.02 3% 530 0% 7% 4% 18x 23x 5.0x
9 Staples / SPLS 10,324 14.76 6% 12,586 14% 2% 4% 11x 10x 4.0x
10 Berkshire Hathaway / BRK.A 194,903 117,980.00 3% 2 0% <1% 4% 17x 15x 2.0x


New Positions Sold Out Positions
Seacor Holdings / CKH Iron Mountain / IRM
Vodafone / VOD



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $4.8 billion
Top 10 as % of portfolio 52%
Median market value $13 billion
Average market value $39 billion
Median P/E (this FY) 13x
Median P/E (next FY) 11x
Median P / tangible book 2.3x
*
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.

Technology
34%
Services
31%
Energy
15%
Other
20%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 SINA Corp. / SINA 4,480 68.56 32% 687 >100% 1% 10% 73x 49x 3.9x
2 Google / GOOG 197,003 605.91 -6% 130 0% <1% 16% 14x 12x 4.0x
3 Yahoo! / YHOO 20,018 16.14 0% 3,490 0% <1% 11% 20x 17x 2.4x
4 Katy Industries / KT 7,930 16.30 10% 3,389 0% <1% 11% 5x 5x .9x
5 Veeco Instruments / VECO 1,098 28.36 36% 777 new 2% 4% 22x 14x 1.6x
6 TAL Education / XRS 876 11.32 14% 2,104 16% 3% 5% 37x 29x 5.7x
7 Changyou.com / CYOU 1,330 25.39 10% 252 new <1% 1% 5x 5x 3.4x
8 Hexcel / HXL 2,645 26.61 10% 821 0% <1% 4% 19x 17x 3.6x
9 Home Inns & Hotels / HMIN 1,390 30.69 19% 494 0% 1% 3% 24x 20x 4.0x
10 21Vianet Group / VNET 630 11.10 21% 364 new <1% 1% 4x 4x n/m


Top Holdings of Joho Capital – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 New Oriental Edu. / EDU 4,180 26.85 12% 4,311 -25% 3% 24% 30x 23x 7.5x
2 Google / GOOG 197,003 605.91 -6% 130 0% <1% 16% 14x 12x 4.0x
3 Yahoo! / YHOO 20,018 16.14 0% 3,490 0% <1% 11% 20x 17x 2.4x
4 Katy Industries / KT 7,930 16.30 10% 3,389 0% <1% 11% 5x 5x .9x
5 SINA Corp. / SINA 4,480 68.56 32% 687 >100% 1% 10% 73x 49x 3.9x
6 Estee Lauder / EL 22,060 56.90 1% 792 -16% <1% 9% 25x 22x >9.9x
7 TAL Education / XRS 876 11.32 14% 2,104 16% 3% 5% 37x 29x 5.7x
8 Veeco Instruments / VECO 1,098 28.36 36% 777 new 2% 4% 22x 14x 1.6x
9 Hexcel / HXL 2,645 26.61 10% 821 0% <1% 4% 19x 17x 3.6x
10 Home Inns & Hotels / HMIN 1,390 30.69 19% 494 0% 1% 3% 24x 20x 4.0x


New Positions Sold Out Positions
21Vianet Group / VNET
Changyou.com / CYOU
Veeco Instruments / VECO
7 Days Group / SVN
Renren / RENN



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $492 million
Top 10 as % of portfolio 98%
Median maret value $3.4 billion
Average market value $22 billion
Median P/E (this FY) 21x
Median P/E (next FY) 17x
Median P / tangible book 3.7x
*
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.


Technology
48%
Services
43%
Consumer Non-
Cyclical
9%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Ambassadors Group / EPAX 86 4.90 9% 1,189 >100% 7% 6% 54x 27x 1.3x
2 Williams Controls / WMCO 81 11.07 0% 667 0% 9% 7% 13x 10x 4.6x
3 Healthsouth / HLS 1,796 18.85 7% 279 0% <1% 5% 15x 13x n/m
4 Quiksilver / ZQK 753 4.55 26% 1,125 0% <1% 5% 22x 13x 3.7x
5 Learning Tree / LTRE 78 5.74 -16% 726 0% 5% 4% 64x 15x 2.1x
6 Monotype Imaging / TYPE 545 15.13 -3% 293 0% <1% 4% 17x 15x n/m
7 Markel / MKL 3,925 407.96 -2% 10 0% <1% 4% 26x 25x 1.6x
8 MasterCard / MA 50,284 396.14 6% 12 0% <1% 5% 18x 15x >9.9x
9 Corinthian Colleges / COCO 424 5.00 130% 2,020 6% 2% 10% 17x 11x 2.2x
10 Skechers / SKX 698 13.98 15% 338 0% <1% 5% n/m 29x .8x


Top Holdings of Lane Five Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Corinthian Colleges / COCO 424 5.00 130% 2,020 6% 2% 10% 17x 11x 2.2x
2 Williams Controls / WMCO 81 11.07 0% 667 0% 9% 7% 13x 10x 4.6x
3 Ambassadors Group / EPAX 86 4.90 9% 1,189 >100% 7% 6% 54x 27x 1.3x
4 Healthsouth / HLS 1,796 18.85 7% 279 0% <1% 5% 15x 13x n/m
5 Quiksilver / ZQK 753 4.55 26% 1,125 0% <1% 5% 22x 13x 3.7x
6 MasterCard / MA 50,284 396.14 6% 12 0% <1% 5% 18x 15x >9.9x
7 Skechers / SKX 698 13.98 15% 338 0% <1% 5% n/m 29x .8x
8 Monotype Imaging / TYPE 545 15.13 -3% 293 0% <1% 4% 17x 15x n/m
9 Learning Tree / LTRE 78 5.74 -16% 726 0% 5% 4% 64x 15x 2.1x
10 Markel / MKL 3,925 407.96 -2% 10 0% <1% 4% 26x 25x 1.6x


New Positions Sold Out Positions
None None


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $104 million
Top 10 as % of portfolio 54%
Median maret value $1.4 billion
Average market value $5.3 billion
Median P/E (this FY) 17x
Median P/E (next FY) 15x
Median P / tangible book 2.1x
*
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.


Services
55%
Consumer
Cyclical
17%
Financial
16%
Other
13%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 INTL FCStone / INTL 427 22.51 -4% 1,618 0% 9% 3% 9x n/a 1.8x
2 Jefferies / JEF 3,236 15.71 14% 58,006 3% 28% 63% 13x 10x 1.1x
3 Cowen / COWN 320 2.77 7% 994 0% <1% 0% n/m 7x .6x
4 Mueller Industries / MLI 1,797 47.02 22% 10,423 0% 27% 34% 19x n/a 2.1x


Top Holdings of Leucadia – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Jefferies / JEF 3,236 15.71 14% 58,006 3% 28% 63% 13x 10x 1.1x
2 Mueller Industries / MLI 1,797 47.02 22% 10,423 0% 27% 34% 19x n/a 2.1x
3 INTL FCStone / INTL 427 22.51 -4% 1,618 0% 9% 3% 9x n/a 1.8x
4 Cowen / COWN 320 2.77 7% 994 0% <1% 0% n/m 7x .6x


New Positions Sold Out Positions
None Global Power Equip. / GLPW


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $1.4 billion
Top 10 as % of portfolio 100%
Median market value $427 million
Average market value $1.2 billion
Median P/E (this FY) 16x
Median P/E (next FY) 10x
Median P / tangible book 1.8x
*
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.
**
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.


Financial
66%
Basic Materials
34%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 priceline.com / PCLN 27,134 545.04 17% 1,467 >100% 3% 5% 24x 18x >9.9x
2 Google / GOOG 197,003 605.91 -6% 1,347 44% <1% 5% 14x 12x 4.0x
3 Polo Ralph Lauren / RL 15,938 172.60 25% 4,680 11% 5% 5% 25x 21x 7.4x
4 Apple / AAPL 460,050 493.42 22% 2,151 4% <1% 7% 12x 10x 5.4x
5 VanceInfo / VIT 591 13.29 47% 7,863 0% 18% 1% 17x 14x 2.4x
6 Visa / V 92,635 113.90 12% 4,797 >100% <1% 4% 19x 16x >9.9x
7 Fossil / FOSL 6,290 100.49 27% 3,625 83% 6% 2% 22x 18x 6.4x
8 New Oriental Edu. / EDU 4,180 26.85 12% 9,957 48% 6% 2% 30x 23x 7.5x
9 Williams-Sonoma / WSM 3,790 36.84 -4% 6,235 7% 6% 2% 17x 15x 3.0x
10 Accretive Health / AH 2,403 24.47 6% 9,058 16% 9% 1% 57x 35x >9.9x

Top Holdings of Lone Pine – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Apple / AAPL 460,050 493.42 22% 2,151 4% <1% 7% 12x 10x 5.4x
2 Google / GOOG 197,003 605.91 -6% 1,347 44% <1% 5% 14x 12x 4.0x
3 Polo Ralph Lauren / RL 15,938 172.60 25% 4,680 11% 5% 5% 25x 21x 7.4x
4 priceline.com / PCLN 27,134 545.04 17% 1,467 >100% 3% 5% 24x 18x >9.9x
5 Express Scripts / ESRX 24,408 50.17 12% 13,779 -5% 3% 5% 17x 14x n/m
6 Dollar General / DG 14,680 42.89 4% 15,341 -3% 4% 4% 18x 16x n/m
7 Visa / V 92,635 113.90 12% 4,797 >100% <1% 4% 19x 16x >9.9x
8 Crown Castle / CCI 14,029 49.31 10% 10,584 -13% 4% 3% 62x 43x n/m
9 Las Vegas Sands / LVS 42,367 51.59 21% 9,697 32% 1% 3% 20x 17x 5.7x
10 NetApp / NTAP 14,231 39.69 9% 12,199 4% 3% 3% 17x 14x 5.4x


New Positions Sold Out Positions
Baidu.com / BIDU
eBay / EBAY
El Paso Corp. / EP
FMC Technologies / FTI
Green Mtn Coffee / GMCR
Kinder Morgan / KMI
Liberty Media / LMCA
Lululemon Athletica / LULU
Medco Health / MHS
Michael Kors / KORS
V.F. Corp. / VFC
W.R. Grace / GRA
Willis Group / WSH
Bed Bath & Beyond / BBBY
Citigroup / C
Coca-Cola / KO
Dollar Tree / DLTR
Estee Lauder / EL
Flavors & Fragrances / IFF
Goodrich Corp. / GR
Grifols / GRFS
Liberty Starz / LSTZA
NII Holdings / NIHD
Royal Caribbean / RCL
Schlumberger / SLB
U.S. Bancorp / USB
United Technologies / UTX
Yum! Brands / YUM

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $15 billion
Top 10 as % of portfolio 45%
Median market value $11 billion
Average market value $32 billion
Median P/E (this FY) 18x
Median P/E (next FY) 16x
Median P / tangible book 4.8x
*
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.

Technology
38%
Services
30%
Consumer
Cyclical
14%
Other
19%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Fairfax Financial / FRFHF 8,590 421.00 -2% 279 0% 1% 6% 10x 20x 1.1x
2 Brookfield Asset / BAM 36,475 30.98 13% 3,102 0% <1% 5% n/a n/a 4.3x
3 Union Bankshares / UBSH 368 14.09 6% 3,505 0% 13% 3% 14x 13x 1.1x
4 Investors Title / ITIC 93 44.00 23% 229 0% 11% 1% n/a n/a .9x
5 Exxon Mobil / XOM 401,671 83.80 -1% 811 7% <1% 4% 10x 9x 2.6x
6 Wal-Mart / WMT 211,989 61.90 4% 1,086 1% <1% 4% 14x 13x 4.5x
7 Paychex / PAYX 11,347 31.31 4% 146 >100% <1% 0% 21x 19x >9.9x
8 Louisiana-Pacific / LPX 1,098 8.06 0% 107 88% <1% 0% n/m n/m 1.1x
9 Expeditors Int’l / EXPD 9,124 43.03 5% 48 >100% <1% 0% 24x 21x 4.7x
10 Nicholas Financial / NICK 160 13.35 4% 154 84% 1% 0% n/a n/a 1.2x
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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 CarMax / KMX 6,777 29.91 -2% 5,191 0% 2% 8% 17x 16x 2.6x
2 Fairfax Financial / FRFHF 8,590 421.00 -2% 279 0% 1% 6% 10x 20x 1.1x
3 Diageo / DEO 58,691 93.40 7% 1,247 0% <1% 6% 16x 14x n/m
4 Berkshire Hathaway / BRK.A 194,903 117,980.00 3% 1 -52% <1% 6% 17x 15x 2.0x
5 Brookfield Asset / BAM 36,475 30.98 13% 3,102 0% <1% 5% n/a n/a 4.3x
6 Exxon Mobil / XOM 401,671 83.80 -1% 811 7% <1% 4% 10x 9x 2.6x
7 Wal-Mart / WMT 211,989 61.90 4% 1,086 1% <1% 4% 14x 13x 4.5x
8 Walt Disney / DIS 74,293 41.45 11% 1,538 0% <1% 3% 14x 12x >9.9x
9 UPS / UPS 74,005 76.69 5% 741 0% <1% 3% 16x 14x >9.9x
10 Marriott / MAR 11,971 35.72 22% 1,407 0% <1% 3% 26x 23x n/m

New Positions Sold Out Positions
DreamWorks / DWA
Loews Corp. / L
Marriott Vacations / VAC
McCormick / MKC
Mosaic Company / MOS
SEI Investments / SEIC
Vodafone / VOD
Campbell Soup / CPB
EnCana / ECA


Portfolio Metrics
*
Sector Weightings
*, **

Portfolio size $1.9 billion
Top 10 as % of portfolio 49%
Median market value $19 billion
Average market value $49 billion
Median P/E (this FY) 16x
Median P/E (next FY) 14x
Median P / tangible book 2.8x
*
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.
**
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.


Services
35%
Financial
26%
Consumer Non-
Cyclical
10%
Other
30%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Key Energy Services / KEG 2,220 14.73 -5% 17,474 3% 12% 12% 16x 9x 5.1x
2 Leap Wireless / LEAP 715 9.09 -2% 23,534 0% 30% 10% n/m n/m n/m
3 Loral Space / LORL 2,081 67.76 4% 8,130 0% 26% 26% n/a n/a 2.3x
4 Ensco / ESV 12,869 55.80 19% 6,631 0% 3% 17% 18x 10x 1.7x
5 Lions Gate / LGF 1,698 11.84 42% 51,262 0% 36% 28% n/a n/a n/m
6 MetroPCS / PCS 3,554 9.81 13% 14,618 14% 4% 7% 13x 12x >9.9x
7 TIM Participacoes / TSU 21,391 27.63 7% 85 0% <1% 0% 22x 17x 5.5x
8 Rand Logistics / RLOG 136 7.69 18% 462 0% 3% 0% 26x 17x 2.9x
9 Dynavax Tech / DVAX 606 4.05 22% 445 0% <1% 0% n/m n/m >9.9x


Top Holdings of MHR Fund Management – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Lions Gate / LGF 1,698 11.84 42% 51,262 0% 36% 28% n/a n/a n/m
2 Loral Space / LORL 2,081 67.76 4% 8,130 0% 26% 26% n/a n/a 2.3x
3 Ensco / ESV 12,869 55.80 19% 6,631 0% 3% 17% 18x 10x 1.7x
4 Key Energy Services / KEG 2,220 14.73 -5% 17,474 3% 12% 12% 16x 9x 5.1x
5 Leap Wireless / LEAP 715 9.09 -2% 23,534 0% 30% 10% n/m n/m n/m
6 MetroPCS / PCS 3,554 9.81 13% 14,618 14% 4% 7% 13x 12x >9.9x
7 Rand Logistics / RLOG 136 7.69 18% 462 0% 3% 0% 26x 17x 2.9x
8 TIM Participacoes / TSU 21,391 27.63 7% 85 0% <1% 0% 22x 17x 5.5x
9 Dynavax Tech / DVAX 606 4.05 22% 445 0% <1% 0% n/m n/m >9.9x


New Positions Sold Out Positions
None M & F Worldwide / MFW


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $2.2 billion
Top 10 as % of portfolio 100%
Median market value $1.9 billion
Average market value $4.6 billion
Median P/E (this FY) 18x
Median P/E (next FY) 12x
Median P / tangible book 2.9x
*
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.


Services
45%
Energy
29%
Technology
26%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Bluenight Energy / BKEP 243 6.90 6% 3,577 0% 10% 3% n/m 20x n/m
2 Asbury Automotive / ABG 784 24.68 14% 3,686 0% 12% 12% 14x 12x 2.7x
3 DineEquity / DIN 898 49.77 18% 2,512 0% 14% 16% 12x 12x n/m
4 EchoStar / SATS 2,713 31.35 50% 3,615 4% 4% 14% >99x 68x 1.4x
5 First Opportunity Fund / FF 486 11.77 -5% 3,600 0% 9% 5% 15x 13x 1.8x
6 Tyler Tech / TYL 1,090 36.68 22% 1,356 0% 5% 6% 45x 37x n/m
7 Domino’s Pizza / DPZ 1,889 32.46 -4% 2,886 -12% 5% 12% 20x 17x n/m
8 Macquarie Infrastr. / MIC 1,331 28.73 3% 3,095 -12% 7% 11% 10x 14x n/m
9 Wright Express / WXS 2,351 60.65 12% 1,609 -10% 4% 12% 14x 13x >9.9x
10 Energy XXI / EXXI 2,877 37.60 18% 550 0% <1% 3% 10x 8x 2.4x


Top Holdings of MSD Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 DineEquity / DIN 898 49.77 18% 2,512 0% 14% 16% 12x 12x n/m
2 EchoStar / SATS 2,713 31.35 50% 3,615 4% 4% 14% >99x 68x 1.4x
3 Wright Express / WXS 2,351 60.65 12% 1,609 -10% 4% 12% 14x 13x >9.9x
4 Domino’s Pizza / DPZ 1,889 32.46 -4% 2,886 -12% 5% 12% 20x 17x n/m
5 Asbury Automotive / ABG 784 24.68 14% 3,686 0% 12% 12% 14x 12x 2.7x
6 Macquarie Infrastr. / MIC 1,331 28.73 3% 3,095 -12% 7% 11% 10x 14x n/m
7 Tyler Tech / TYL 1,090 36.68 22% 1,356 0% 5% 6% 45x 37x n/m
8 First Opportunity Fund / FF 486 11.77 -5% 3,600 0% 9% 5% 15x 13x 1.8x
9 Sunstone Hotel / SHO 1,156 9.74 20% 3,496 -11% 3% 4% n/a n/a 1.5x
10 Bluenight Energy / BKEP 243 6.90 6% 3,577 0% 10% 3% n/m 20x n/m


New Positions Sold Out Positions
None Atlas Pipeline Part. / APL

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $787 million
Top 10 as % of portfolio 97%
Median market value $1.2 billion
Average market value $1.4 billion
Median P/E (this FY) 14x
Median P/E (next FY) 14x
Median P / tangible book 1.7x
*
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.

Services
70%
Transportation
11%
Technology
7%
Other
11%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Berkshire Hathaway / BRK.A 194,903 117,980 3% 0 >100% <1% 12% 17x 15x 2.0x
2 Terex / TEX 2,465 22.47 66% 2,267 new 2% 18% 51x 13x >9.9x
3 DIRECTV / DTV 32,111 45.51 6% 398 new <1% 6% 13x 10x n/m
4 Wells Fargo / WFC 159,577 30.26 10% 1,387 4% <1% 15% 9x 8x 1.8x
5 Potash / POT 38,424 44.70 8% 796 0% <1% 13% n/a n/a 5.0x
6 Citigroup / C 96,263 32.93 25% 506 new <1% 6% 8x 7x .7x
7 Pinnacle Airlines / PNCL 27 1.43 74% 1,986 0% 10% 1% n/m 72x .4x
8 Horsehead / ZINC 466 10.67 18% 1,855 37% 4% 7% 14x 13x 1.1x
9 CapitalSource / CSE 1,934 7.04 5% 2,188 -22% <1% 5% n/m 14x 1.3x
10 Brookfield Resident. / BRP 799 8.04 21% 226 -6% <1% 1% n/a n/a n/m

Top Holdings of Pabrai Funds – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Terex / TEX 2,465 22.47 66% 2,267 new 2% 18% 51x 13x >9.9x
2 Wells Fargo / WFC 159,577 30.26 10% 1,387 4% <1% 15% 9x 8x 1.8x
3 Potash / POT 38,424 44.70 8% 796 0% <1% 13% n/a n/a 5.0x
4 Berkshire Hathaway / BRK.A 194,903 117,980.00 3% 0 >100% <1% 12% 17x 15x 2.0x
5 Goldman Sachs / GS 56,183 114.12 26% 215 -26% <1% 9% 10x 9x .9x
6 Horsehead / ZINC 466 10.67 18% 1,855 37% 4% 7% 14x 13x 1.1x
7 DIRECTV / DTV 32,111 45.51 6% 398 new <1% 6% 13x 10x n/m
8 Bank of America / BAC 81,797 8.07 45% 2,136 -70% <1% 6% 11x 7x .6x
9 Citigroup / C 96,263 32.93 25% 506 new <1% 6% 8x 7x .7x
10 CapitalSource / CSE 1,934 7.04 5% 2,188 -22% <1% 5% n/m 14x 1.3x


New Positions Sold Out Positions
Citigroup / C
DIRECTV / DTV
Terex / TEX
Air Transport / ATSG
Brookfield Infrastr. / BIP
Brookfield Prop. / BPO
Harvest Natural / HNR



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $284 million
Top 10 as % of portfolio 97%
Median market value $3.8 billion
Average market value $40 billion
Median P/E (this FY) 12x
Median P/E (next FY) 12x
Median P / tangible book 1.1x
*
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.

Financial
53%
Basic Materials
20%
Capital Goods
18%
Other
9%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Delphi Automotive / DLPH 9,861 30.04 39% 51,735 new 16% 12% 8x 7x 9.0x
2 SuperMedia / SPMD 44 2.84 8% 2,608 0% 17% 0% n/a n/a n/m
3 Motorola Mobility / MMI 11,815 39.45 2% 11,000 22% 4% 3% 64x 34x 3.2x
4 NovaGold / NG 2,347 8.48 0% 22,955 14% 8% 2% n/m n/m 9.0x
5 Goodrich Corp. / GR 15,694 125.35 1% 1,428 >100% 1% 1% 18x 16x >9.9x
6 AMC Networks / AMCX 3,032 42.19 12% 5,750 15% 8% 2% 22x 18x n/m
7 Medco Health / MHS 23,541 60.82 9% 2,000 >100% <1% 1% 15x 13x n/m
8 Tower Hill Mines / THM 437 5.03 15% 5,130 2% 6% 0% n/m n/m 2.4x
9 Dex One / DEXO 99 1.97 19% 3,676 0% 7% 0% n/a n/a n/m
10 FelCor Lodging / FCH 516 4.14 36% 5,700 >100% 5% 0% n/m n/m 4.1x

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.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Delphi Automotive / DLPH 9,861 30.04 39% 51,735 new 16% 12% 8x 7x 9.0x
2 AngloGold Ashanti / AU 17,571 45.11 6% 34,291 -7% 9% 12% 10x 8x 3.9x
3 Anadarko Petroleum / APC 43,343 87.04 14% 9,580 -32% 2% 6% 26x 19x 3.5x
4 Hartford Financial / HIG 8,806 19.90 22% 37,520 -3% 8% 6% 6x 5x .4x
5 JPMorgan Chase / JPM 142,909 37.61 13% 18,520 0% <1% 5% 8x 7x 1.2x
6 Capital One / COF 22,193 48.28 14% 13,485 -39% 3% 5% 8x 7x 1.4x
7 MGM Mirage / MGM 7,152 14.63 40% 37,418 -8% 8% 4% n/m n/m n/m
8 Mylan / MYL 9,725 22.80 6% 21,103 -15% 5% 4% 11x 10x n/m
9 Motorola Mobility / MMI 11,815 39.45 2% 11,000 22% 4% 3% 64x 34x 3.2x
10 Gold Fields / GFI 12,246 16.47 8% 23,506 -4% 3% 3% 17x 10x 2.5x

New Positions Sold Out Positions
Delphi Automotive / DLPH
El Paso Corp. / EP
Royal Bank Scotland / RBS
United Rentals / URI
Alpha Natural / ANR
Ashford Hospitality / AHT
BlackRock / BLK
Citigroup / C
Covidien / COV
CVS Caremark / CVS
Hewlett-Packard / HPQ
Lear / LEA
Liberty Interactive / LINTA
McClatchy / MNI
Medtronic / MDT
MetLife / MET
Nalco Holding / NLC
PAETEC Holding / PAET
Regions Financial / RF
RLJ Lodging / RLJ
SL Green Realty / SLG
Talisman Energy / TLM
Temple-Inland / TIN
Weyerhaeuser / WY
Southern Union / SUG

Portfolio Metrics
*

Sector Weightings
*

Portfolio size $13 billion
Top 10 as % of portfolio 61%
Median market value $6.0 billion
Average market value $17 billion
Median P/E (this FY) 12x
Median P/E (next FY) 11x
Median P / tangible book 1.9x
*
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.

Financial
30%
Basic Materials
22%
Consumer
Cyclical
12%
Other
35%
HIG: Listen to Paulson’s
contentious exchange with
the CEO on the Q4 earnings
call on February 8.
The exchange starts at 50
minutes 30 seconds into the
call (related slides).

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Fidelity National / FIS 8,580 28.65 8% 8,815 11% 3% 6% 13x 11x n/m
2 Universal Stainless / USAP 267 39.01 4% 686 0% 10% 1% 10x 8x 1.7x
3 DaVita / DVA 7,851 83.97 11% 3,284 2% 4% 6% 17x 14x n/m
4 Apple / AAPL 460,050 493.42 22% 420 14% <1% 5% 12x 10x 5.4x
5 Huntington Ingalls / HII 1,786 36.59 17% 3,546 new 7% 3% 10x 13x n/m
6 TripAdvisor / TRIP 4,011 30.04 19% 5,996 new 4% 4% 22x 18x n/m
7 Qualcomm / QCOM 104,411 61.73 13% 4,379 0% <1% 6% 16x 15x 4.8x
8 WellPoint / WLP 22,322 64.17 -3% 2,781 7% <1% 4% 8x 8x >9.9x
9 Sprint Nextel / S 6,860 2.29 -2% 19,400 90% <1% 1% n/m n/m n/m
10 Aeroflex / ARX 982 11.58 13% 3,336 >100% 4% 1% 14x 10x n/m

Top Holdings of Pennant Capital – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 TransDigm / TDG 5,886 116.19 21% 2,807 -5% 6% 8% 19x 17x n/m
2 DaVita / DVA 7,851 83.97 11% 3,284 2% 4% 6% 17x 14x n/m
3 Qualcomm / QCOM 104,411 61.73 13% 4,379 0% <1% 6% 16x 15x 4.8x
4 Fidelity National / FIS 8,580 28.65 8% 8,815 11% 3% 6% 13x 11x n/m
5 Apple / AAPL 460,050 493.42 22% 420 14% <1% 5% 12x 10x 5.4x
6 Dollar General / DG 14,680 42.89 4% 4,618 0% 1% 5% 18x 16x n/m
7 TripAdvisor / TRIP 4,011 30.04 19% 5,996 new 4% 4% 22x 18x n/m
8 WellPoint / WLP 22,322 64.17 -3% 2,781 7% <1% 4% 8x 8x >9.9x
9 Terex / TEX 2,465 22.47 66% 7,743 -7% 7% 4% 51x 13x >9.9x
10 Sensata Tech / ST 5,581 31.69 21% 5,042 -18% 3% 4% 15x 12x n/m

New Positions Sold Out Positions
Huntington Ingalls / HII
TripAdvisor / TRIP
Adobe Systems / ADBE
Aviat Networks / AVNW
Calumet Specialty / CLMT
CF Industries / CF
CVR Energy / CVI
Expedia / EXPE
General Motors / GM
HollyFrontier / HFC
Kronos Worldwide / KRO
Rockwell Collins / COL
Wells Fargo / WFC
Western Refining / WNR

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $4.3 billion
Top 10 as % of portfolio 52%
Median market value $6.8 billion
Average market value $35 billion
Median P/E (this FY) 13x
Median P/E (next FY) 12x
Median P / tangible book 2.7x
*
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.

Technology
21%
Financial
21%
Capital Goods
21%
Other
37%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Beam / BEAM 8,342 53.66 5% 20,819 new 13% 13% 23x 21x n/m
2 Fortune Brands Home / FBHS 3,070 19.72 16% 20,819 new 13% 5% 26x 20x n/m
3 Can. Pacific Railway / CP 12,742 74.63 10% 24,154 >100% 14% 21% n/a n/a 2.8x
4 General Growth / GGP 15,339 16.40 12% 72,234 0% 8% 14% n/m 96x 1.8x
5 J.C. Penney / JCP 9,063 42.44 21% 39,076 0% 18% 19% 35x 21x 2.0x
6 Alexander & Baldwin / ALEX 1,966 47.14 15% 3,562 0% 9% 2% 46x 25x 1.7x
7 Howard Hughes / HHC 1,941 51.15 16% 3,568 0% 9% 2% n/m >99x .9x
8 Kraft Foods / KFT 68,161 38.58 3% 21,161 -16% 1% 9% 17x 15x n/m
9 Family Dollar Stores / FDO 6,789 57.65 0% 8,385 -26% 7% 6% 16x 14x 5.9x
10 Citigroup / C 96,263 32.93 25% 26,120 0% <1% 10% 8x 7x .7x

Top Holdings of Pershing Square – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Can. Pacific Railway / CP 12,742 74.63 10% 24,154 >100% 14% 21% n/a n/a 2.8x
2 J.C. Penney / JCP 9,063 42.44 21% 39,076 0% 18% 19% 35x 21x 2.0x
3 General Growth / GGP 15,339 16.40 12% 72,234 0% 8% 14% n/m 96x 1.8x
4 Beam / BEAM 8,342 53.66 5% 20,819 new 13% 13% 23x 21x n/m
5 Citigroup / C 96,263 32.93 25% 26,120 0% <1% 10% 8x 7x .7x
6 Kraft Foods / KFT 68,161 38.58 3% 21,161 -16% 1% 9% 17x 15x n/m
7 Family Dollar Stores / FDO 6,789 57.65 0% 8,385 -26% 7% 6% 16x 14x 5.9x
8 Fortune Brands Home / FBHS 3,070 19.72 16% 20,819 new 13% 5% 26x 20x n/m
9 Howard Hughes / HHC 1,941 51.15 16% 3,568 0% 9% 2% n/m >99x .9x
10 Alexander & Baldwin / ALEX 1,966 47.14 15% 3,562 0% 9% 2% 46x 25x 1.7x


New Positions Sold Out Positions
Beam (BEAM)
Fortune Brands Home / FBHS
Lowe’s / LOW


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $8.7 billion
Top 10 as % of portfolio 100%
Median market value $9.1 billion
Average market value $23 billion
Median P/E (this FY) 20x
Median P/E (next FY) 20x
Median P / tangible book 1.9x
*
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.

Services
40%
Transportation
23%
Consumer Non-
Cyclical
22%
Other
15%
Fortune Brands has separated into Beam and Fortune Brands Home.
Pershing Square
previously owned the
combined company,
Fortune Brands.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 COMSCORE / SCOR 744 22.51 6% 1,668 4% 5% 30% n/m >99x >9.9x
2 Liberty Interactive / LINTA 10,717 18.16 12% 1,550 0% <1% 22% 25x 18x n/m
3 Life Technologies / LIFE 8,830 49.55 27% 1,108 -30% <1% 44% 12x 11x 1.9x
4 Arris Group / ARRS 1,409 11.95 10% 453 -88% <1% 4% 14x 11x 2.4x


Top Holdings of Sageview Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Life Technologies / LIFE 8,830 49.55 27% 1,108 -30% <1% 44% 12x 11x 1.9x
2 COMSCORE / SCOR 744 22.51 6% 1,668 4% 5% 30% n/m >99x >9.9x
3 Liberty Interactive / LINTA 10,717 18.16 12% 1,550 0% <1% 22% 25x 18x n/m
4 Arris Group / ARRS 1,409 11.95 10% 453 -88% <1% 4% 14x 11x 2.4x


New Positions Sold Out Positions
None Covidien / COV
State Bank Financial / STBZ



Portfolio Metrics
*
Sector Weightings
*

Portfolio size $126 million
Top 10 as % of portfolio 100%
Median market value $8.8 billion
Average market value $9.3 billion
Median P/E (this FY) 13x
Median P/E (next FY) 11x
Median P / tangible book 2.1x
*
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.


Services
52%
Health Care
44%
Technology
4%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Google / GOOG 197,003 605.91 -6% 485 new <1% 10% 14x 12x 4.0x
2 Arcos Dorados / ARCO 4,365 20.83 1% 14,262 52% 7% 11% 36x 23x 7.4x
3 PepsiCo / PEP 99,980 63.95 -4% 2,405 new <1% 5% 14x 13x n/m
4 Coca-Cola Enterprise / CCE 8,559 27.43 6% 8,104 17% 3% 8% 12x 11x n/m
5 Williams Companies / WMB 17,128 29.06 8% 7,815 17% 1% 8% 19x 20x 2.2x
6 Sally Beauty / SBH 4,271 22.92 8% 7,054 new 4% 6% 17x 15x n/m
7 Fresh Market / TFM 2,112 43.98 10% 3,303 9% 7% 5% 41x 33x >9.9x
8 Tupperware Brands / TUP 3,549 61.86 11% 968 new 2% 2% 12x 11x 7.1x
9 Family Dollar Stores / FDO 6,789 57.65 0% 3,527 0% 3% 7% 16x 14x 5.9x
10 TripAdvisor / TRIP 4,011 30.04 19% 1,700 new 1% 2% 22x 18x n/m


Top Holdings of Scout Capital – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Sensata Tech / ST 5,581 31.69 21% 9,800 -10% 6% 11% 15x 12x n/m
2 Arcos Dorados / ARCO 4,365 20.83 1% 14,262 52% 7% 11% 36x 23x 7.4x
3 Google / GOOG 197,003 605.91 -6% 485 new <1% 10% 14x 12x 4.0x
4 Williams Companies / WMB 17,128 29.06 8% 7,815 17% 1% 8% 19x 20x 2.2x
5 Coca-Cola Enterprise / CCE 8,559 27.43 6% 8,104 17% 3% 8% 12x 11x n/m
6 Family Dollar Stores / FDO 6,789 57.65 0% 3,527 0% 3% 7% 16x 14x 5.9x
7 Domino’s Pizza / DPZ 1,889 32.46 -4% 5,551 -6% 10% 6% 20x 17x n/m
8 Sally Beauty / SBH 4,271 22.92 8% 7,054 new 4% 6% 17x 15x n/m
9 PepsiCo / PEP 99,980 63.95 -4% 2,405 new <1% 5% 14x 13x n/m
10 Fresh Market / TFM 2,112 43.98 10% 3,303 9% 7% 5% 41x 33x >9.9x


New Positions Sold Out Positions
Google / GOOG
ITC Holdings / ITC
Las Vegas Sands / LVS
Lululemon Athletica / LULU
Michael Kors / KORS
Molson Coors / TAP
PepsiCo / PEP
Sally Beauty / SBH
TripAdvisor / TRIP
Tupperware Brands / TUP
BHP Billiton / BHP
CF Industries / CF
eBay / EBAY
Expedia / EXPE
Sherwin-Williams / SHW
Visa / V


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $2.8 billion
Top 10 as % of portfolio 78%
Median market value $8.1 billion
Average market value $38 billion
Median P/E (this FY) 17x
Median P/E (next FY) 15x
Median P / tangible book 5.5x
*
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.

Services
45%
Technology
22%
Consumer Non-
Cyclical
16%
Other
17%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 NewStar Financial / NEWS 499 10.08 -1% 2,434 16% 5% 12% n/a n/a .9x
2 Primus Guaranty / PRSG 197 5.60 14% 6,069 15% 17% 17% n/a n/a n/m
3 Taylor Capital / TAYC 269 13.17 35% 2,158 7% 11% 14% 18x 12x .9x
4 Bancorp / TBBK 269 8.10 12% 1,233 18% 4% 5% 13x 8x 1.0x
5 Synovus Financial / SNV 1,508 1.92 36% 4,300 30% <1% 4% 19x 11x .8x
6 Sterling Financial / STSA 1,187 19.15 15% 378 0% <1% 4% 13x 13x 1.4x
7 Seacoast Banking / SBCF 162 1.71 13% 1,685 17% 2% 1% 43x 17x 1.3x
8 Sun Bancorp NJ / SNBC 240 2.80 16% 710 3% <1% 1% 93x 23x .9x
9 Suffolk Bancorp / SUBK 124 12.76 18% 75 new <1% 0% n/a n/a .9x
10 CoBiz Financial / COBZ 224 6.05 5% 2,366 -17% 6% 7% 13x 10x 1.1x


Top Holdings of Second Curve – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Primus Guaranty / PRSG 197 5.60 14% 6,069 15% 17% 17% n/a n/a n/m
2 Taylor Capital / TAYC 269 13.17 35% 2,158 7% 11% 14% 18x 12x .9x
3 Banner Corp. / BANR 334 19.39 13% 1,460 -5% 8% 14% 13x 20x .8x
4 NewStar Financial / NEWS 499 10.08 -1% 2,434 16% 5% 12% n/a n/a .9x
5 Citizens Republic / CRBC 545 13.54 19% 1,724 -36% 4% 11% 13x 11x 1.3x
6 CoBiz Financial / COBZ 224 6.05 5% 2,366 -17% 6% 7% 13x 10x 1.1x
7 Mercantile Bank / MBWM 109 12.63 30% 830 -2% 10% 5% 12x 10x .8x
8 Bancorp / TBBK 269 8.10 12% 1,233 18% 4% 5% 13x 8x 1.0x
9 Synovus Financial / SNV 1,508 1.92 36% 4,300 30% <1% 4% 19x 11x .8x
10 Sterling Financial / STSA 1,187 19.15 15% 378 0% <1% 4% 13x 13x 1.4x


New Positions Sold Out Positions
Suffolk Bancorp / SUBK West. Alliance Banc / WAL


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $206 million
Top 10 as % of portfolio 92%
Median market value $269 million
Average market value $399 million
Median P/E (this FY) 13x
Median P/E (next FY) 11x
Median P / tangible book 1.0x
*
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.


Financial
100%
Basic Materials

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Quicksilver Resource / KWK 894 5.22 -22% 17,560 17% 10% 0% 44x n/m .8x
2 Level 3 Comms / LVLT 4,392 21.15 24% 40,013 >100% 19% 4% n/m n/m n/m
3 Saks / SKS 1,728 10.81 11% 17,815 31% 11% 1% 28x 22x 1.5x
4 Texas Industries / TXI 937 33.59 9% 8,194 5% 29% 1% n/m n/m 1.4x
5 Martin Marietta / MLM 3,985 87.20 16% 5,983 8% 13% 2% 35x 26x 5.1x
6 InterContinental H. / IHG 6,423 21.93 22% 19,837 76% 7% 2% 18x 17x >9.9x
7 Wendy’s Arby’s / WEN 2,032 5.21 -3% 34,320 12% 9% 1% 29x 22x n/m
8 Travelers / TRV 24,511 59.38 0% 18,071 10% 4% 4% 10x 10x 1.2x
9 Lamar Advertising / LAMR 2,956 31.80 16% 8,146 24% 9% 1% >99x >99x n/m
10 Madison Sq. Garden / MSG 2,361 31.15 9% 5,941 8% 8% 1% 33x 25x 9.5x

Top Holdings of Southeastern – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Dell / DELL 31,888 17.75 21% 141,422 -3% 8% 10% 8x 9x >9.9x
2 Chesapeake Energy / CHK 14,590 22.13 -1% 87,391 -1% 13% 8% 8x 11x 1.1x
3 Cemex / CX 8,555 8.42 56% 174,985 -1% 17% 6% n/m n/m .6x
4 Loews Corp. / L 15,111 38.10 1% 37,636 -2% 9% 6% 12x 12x .8x
5 DIRECTV / DTV 32,111 45.51 6% 31,256 -9% 4% 6% 13x 10x n/m
6 Walt Disney / DIS 74,293 41.45 11% 33,123 -1% 2% 6% 14x 12x >9.9x
7 FedEx / FDX 29,961 95.27 14% 11,740 4% 4% 5% 15x 13x 2.2x
8 Aon / AON 15,699 48.56 4% 22,949 -1% 7% 5% 14x 12x n/m
9 Travelers / TRV 24,511 59.38 0% 18,071 10% 4% 4% 10x 10x 1.2x
10 Liberty Interactive / LINTA 10,717 18.16 12% 53,770 -3% 9% 4% 25x 18x n/m


New Positions Sold Out Positions
None Fair Isaac / FICO
News Corp. / NWSA
Telephone & Data / TDS


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $24 billion
Top 10 as % of portfolio 60%
Median market value $6.6 billion
Average market value $21 billion
Median P/E (this FY) 14x
Median P/E (next FY) 13x
Median P / tangible book 1.7x
*
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.

Services
35%
Financial
24%
Capital Goods
13%
Other
28%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 DISH Network / DISH 12,716 28.50 0% 4,000 new <1% 7% 9x 11x n/m
2 Marvell Technology / MRVL 9,365 16.05 16% 10,000 new 2% 10% 13x 14x 3.3x
3 Sara Lee / SLE 11,714 19.80 5% 7,800 15% 1% 10% 21x 19x >9.9x
4 Gilead Sciences / GILD 40,374 53.75 31% 1,900 58% <1% 7% 14x 12x 8.4x
5 Plains Exploration / PXP 5,998 42.54 16% 2,100 new 1% 6% 24x 13x 2.0x
6 Xerium Technologies / XRM 135 8.88 36% 1,700 0% 11% 1% 8x 6x n/m
7 Liberty Interactive / LINTA 10,717 18.16 12% 3,000 50% <1% 4% 25x 18x n/m
8 Mead Johnson / MJN 15,103 74.19 8% 1,300 18% <1% 6% 24x 21x n/m
9 YPF S.A. / YPF 14,685 34.32 -1% 500 new <1% 1% 9x 8x 3.1x
10 Liberty Media / LMCA 10,589 85.15 9% 500 new <1% 3% 33x 51x 2.6x

Top Holdings of Third Point – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Marvell Technology / MRVL 9,365 16.05 16% 10,000 new 2% 10% 13x 14x 3.3x
2 Sara Lee / SLE 11,714 19.80 5% 7,800 15% 1% 10% 21x 19x >9.9x
3 El Paso Corp. / EP 20,961 27.18 2% 5,550 -21% <1% 10% 26x 22x 4.8x
4 DISH Network / DISH 12,716 28.50 0% 4,000 new <1% 7% 9x 11x n/m
5 Gilead Sciences / GILD 40,374 53.75 31% 1,900 58% <1% 7% 14x 12x 8.4x
6 Mead Johnson / MJN 15,103 74.19 8% 1,300 18% <1% 6% 24x 21x n/m
7 Plains Exploration / PXP 5,998 42.54 16% 2,100 new 1% 6% 24x 13x 2.0x
8 Sunoco / SUN 4,188 39.21 15% 1,820 -4% 2% 5% n/m 28x 3.2x
9 Newell Rubbermaid / NWL 5,466 18.88 17% 3,050 -13% 1% 4% 11x 10x n/m
10 Liberty Interactive / LINTA 10,717 18.16 12% 3,000 50% <1% 4% 25x 18x n/m

New Positions Sold Out Positions
DISH Network / DISH
E*Trade Financial / ETFC
Genworth Financial / GNW
Goldman Sachs / GS
Liberty Media / LMCA
Marvell Technology / MRVL
MEMC Electronic / WFR
MGIC Investment / MTG
Plains Exploration / PXP
Potash / POT
Skyworks Solutions / SWKS
WPX Energy / WPX
YPF S.A. / YPF
Mindray Medical / MR
AGCO Corp. / AGCO
CVR Energy / CVI
eBay / EBAY
Emmis Comms / EMMS
Ligand Pharma / LGND
Mosaic Company / MOS
Royal Bank Scotland / RBS
Warnaco Group / WRC

Portfolio Metrics
*

Sector Weightings
*

Portfolio size $1.6 billion
Top 10 as % of portfolio 68%
Median market value $5.7 billion
Average market value $12 billion
Median P/E (this FY) 13x
Median P/E (next FY) 12x
Median P / tangible book 2.6x
*
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.

Services
24%
Energy
17%
Technology
16%
Other
42%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Google / GOOG 197,003 605.91 -6% 725 >100% <1% 7% 14x 12x 4.0x
2 priceline.com / PCLN 27,134 545.04 17% 1,313 >100% 3% 11% 24x 18x >9.9x
3 MakeMyTrip / MMYT 871 23.46 -2% 7,185 0% 19% 3% n/a n/a 8.7x
4 Liberty Global / LBTYA 13,172 48.55 18% 13,639 4% 5% 11% n/m 32x n/m
5 Polypore International / PPO 2,023 43.50 -1% 1,000 100% 2% 1% 19x 15x n/m
6 Baidu.com / BIDU 49,200 140.76 21% 2,387 31% <1% 5% 48x 31x >9.9x
7 Visa / V 92,635 113.90 12% 3,003 11% <1% 5% 19x 16x >9.9x
8 Liberty Media / LMCA 10,589 85.15 9% 1,908 >100% 2% 3% 33x 51x 2.6x
9 MasterCard / MA 50,284 396.14 6% 771 0% <1% 5% 18x 15x >9.9x
10 Coinstar / CSTR 1,745 56.40 24% 1,500 new 5% 1% 14x 12x 6.8x

Top Holdings of Tiger Global – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Yandex / YNDX 6,870 21.27 8% 53,024 -2% 16% 18% 36x 26x 8.1x
2 Apple / AAPL 460,050 493.42 22% 1,620 -29% <1% 13% 12x 10x 5.4x
3 priceline.com / PCLN 27,134 545.04 17% 1,313 >100% 3% 11% 24x 18x >9.9x
4 Liberty Global / LBTYA 13,172 48.55 18% 13,639 4% 5% 11% n/m 32x n/m
5 Google / GOOG 197,003 605.91 -6% 725 >100% <1% 7% 14x 12x 4.0x
6 Visa / V 92,635 113.90 12% 3,003 11% <1% 5% 19x 16x >9.9x
7 Baidu.com / BIDU 49,200 140.76 21% 2,387 31% <1% 5% 48x 31x >9.9x
8 MasterCard / MA 50,284 396.14 6% 771 0% <1% 5% 18x 15x >9.9x
9 Viacom / VIA 29,330 54.25 2% 5,215 -37% <1% 5% n/a n/a n/m
10 Live Nation / LYV 2,031 10.72 29% 16,616 6% 9% 3% n/m n/m n/m

New Positions Sold Out Positions
Axis Capital / AXS
C&J Energy / CJES
Coinstar / CSTR
Endurance Specialty / ENH
Everest Re / RE
Harry Winston / HWD
hhgregg / HGG
Michael Kors / KORS
Ubiquiti Networks / UBNT
Validus / VR
21Vianet Group / VNET
Adobe Systems / ADBE
Alaska Comms / ALSK
Cablevision / CVC
China Dangdang / DANG
Coca-Cola Enterprise / CCE
Cumulus Media / CMLS
Northern Oil & Gas / NOG
OpenTable / OPEN
Sears Holdings / SHLD
SINA Corp. / SINA
SouFun Holdings / SFUN
Youku / YOKU

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $6.3 billion
Top 10 as % of portfolio 83%
Median market value $4.1 billion
Average market value $27 billion
Median P/E (this FY) 18x
Median P/E (next FY) 15x
Median P / tangible book 2.9x
*
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.

Technology
56%
Services
31%
Financial
11%
Other
2%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Adobe Systems / ADBE 15,905 32.21 14% 24,621 47% 5% 13% 13x 12x >9.9x
2 Motorola Solutions / MSI 15,430 47.40 2% 24,001 0% 7% 18% 16x 14x 4.1x
3 Valeant Pharma / VRX 14,310 47.91 3% 15,095 0% 5% 12% n/a n/a n/m
4 C.R. Bard / BCR 8,207 95.67 12% 5,873 0% 7% 9% 14x 14x >9.9x
5 Moody’s / MCO 8,534 38.44 14% 16,577 0% 7% 10% 15x 13x n/m
6 CB Richard Ellis / CBG 5,861 17.87 17% 21,254 >100% 6% 6% 14x 12x n/m
7 Willis Group / WSH 6,776 39.04 1% 8,578 0% 5% 5% 14x 13x n/m
8 Sara Lee / SLE 11,714 19.80 5% 20,405 0% 3% 6% 21x 19x >9.9x
9 Rockwell Collins / COL 8,774 59.03 7% 9,342 0% 6% 9% 13x 12x >9.9x
10 Fidelity National / FNF 3,879 17.70 11% 12,583 0% 6% 4% 16x 12x 2.7x


Top Holdings of ValueAct – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Motorola Solutions / MSI 15,430 47.40 2% 24,001 0% 7% 18% 16x 14x 4.1x
2 Adobe Systems / ADBE 15,905 32.21 14% 24,621 47% 5% 13% 13x 12x >9.9x
3 Valeant Pharma / VRX 14,310 47.91 3% 15,095 0% 5% 12% n/a n/a n/m
4 Moody’s / MCO 8,534 38.44 14% 16,577 0% 7% 10% 15x 13x n/m
5 C.R. Bard / BCR 8,207 95.67 12% 5,873 0% 7% 9% 14x 14x >9.9x
6 Rockwell Collins / COL 8,774 59.03 7% 9,342 0% 6% 9% 13x 12x >9.9x
7 Verisign / VRSN 5,823 36.61 2% 11,767 -8% 7% 7% 19x 16x n/m
8 Sara Lee / SLE 11,714 19.80 5% 20,405 0% 3% 6% 21x 19x >9.9x
9 CB Richard Ellis / CBG 5,861 17.87 17% 21,254 >100% 6% 6% 14x 12x n/m
10 Willis Group / WSH 6,776 39.04 1% 8,578 0% 5% 5% 14x 13x n/m


New Positions Sold Out Positions
None Gartner / IT
World Fuel Services / INT


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $6.2 billion
Top 10 as % of portfolio 96%
Median market value $6.3 billion
Average market value $7.2 billion
Median P/E (this FY) 15x
Median P/E (next FY) 13x
Median P / tangible book 4.0x
*
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.

Capital Goods
27%
Health Care
21%
Technology
20%
Other
33%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Intelligent Systems / INS 15 1.64 2% 2,270 0% 25% 0% n/a n/a 2.5x
2 FLIR Systems / FLIR 3,883 24.90 -1% 591 >100% <1% 1% 18x 15x 4.2x
3 XO Group / XOXO 251 8.77 5% 2,520 5% 9% 1% 58x 32x 2.3x
4 Redwood Trust / RWT 913 11.60 14% 7,484 10% 10% 4% 22x 12x 1.0x
5 National CineMedia / NCMI 756 13.70 10% 1,687 91% 3% 1% 23x 23x n/m
6 Apache / APA 40,376 105.13 16% 223 >100% <1% 1% 9x 9x 1.6x
7 Hewlett-Packard / HPQ 56,721 28.70 11% 1,350 67% <1% 2% 7x 6x n/m
8 Valeant Pharma / VRX 14,310 47.91 3% 1,405 36% <1% 3% n/a n/a n/m
9 SandRidge Energy / SD 3,107 7.46 -9% 8,201 12% 2% 3% n/m >99x 1.8x
10 Coinstar / CSTR 1,745 56.40 24% 462 70% 1% 1% 14x 12x 6.8x


Top Holdings of Weitz – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Wells Fargo / WFC 159,577 30.26 10% 3,772 0% <1% 5% 9x 8x 1.8x
2 Liberty Interactive / LINTA 10,717 18.16 12% 6,034 -2% 1% 5% 25x 18x n/m
3 Liberty Global / LBTYA 13,172 48.55 18% 2,177 -3% <1% 5% n/m 32x n/m
4 Microsoft / MSFT 255,877 30.50 17% 3,429 -15% <1% 5% 11x 10x 6.1x
5 Aon / AON 15,699 48.56 4% 2,131 -10% <1% 5% 14x 12x n/m
6 Dell / DELL 31,888 17.75 21% 5,121 -13% <1% 4% 8x 9x >9.9x
7 Texas Instruments / TXN 38,119 33.36 15% 2,704 -12% <1% 4% 18x 14x >9.9x
8 Redwood Trust / RWT 913 11.60 14% 7,484 10% 10% 4% 22x 12x 1.0x
9 Google / GOOG 197,003 605.91 -6% 132 -8% <1% 4% 14x 12x 4.0x
10 Martin Marietta / MLM 3,985 87.20 16% 853 -5% 2% 3% 35x 26x 5.1x


New Positions Sold Out Positions
Avon Products / AVP
Oracle / ORCL
American Eagle / AEO
Devon Energy / DVN
EOG Resources / EOG
Kennedy-Wilson / KW
Liberty Starz / LSTZA
Procter & Gamble / PG
Skechers / SKX
Strayer Education / STRA
Viacom / VIA
Vulcan Materials / VMC
Washington Post / WPO


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $2.3 billion
Top 10 as % of portfolio 42%
Median market value $9.8 billion
Average market value $37 billion
Median P/E (this FY) 14x
Median P/E (next FY) 13x
Median P / tangible book 2.5x
*
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.

Services
39%
Technology
20%
Financial
11%
Other
30%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Chevron / CVX 209,664 105.28 -1% 1 0% <1% 0% 8x 8x 1.8x
2 Kraft Foods / KFT 68,161 38.58 3% 96 -5% <1% 6% 17x 15x n/m
3 Starbucks / SBUX 36,781 48.82 6% 6 0% <1% 0% 26x 22x 8.5x
4 Molson Coors / TAP 7,824 43.17 -1% 185 -18% <1% 14% 12x 12x 4.3x
5 Constellation Energy / CEG 7,349 36.46 -8% 96 -40% <1% 6% 12x 15x 1.0x
6 Sonde Resources / SOQ 170 2.71 4% 960 -18% 2% 5% n/a n/a 1.0x
7 Kimberly-Clark / KMB 28,202 71.56 -3% 89 -40% <1% 11% 14x 13x >9.9x
8 Johnson & Johnson / JNJ 176,413 64.60 -1% 82 -45% <1% 9% 13x 12x 6.5x
9 McCormick / MKC 6,081 50.45 0% 109 -42% <1% 10% 17x 15x n/m
10 Automatic Data / ADP 26,496 54.01 0% 66 -45% <1% 6% 20x 18x >9.9x


Top Holdings of West Coast Asset Management – By Dollar Value
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Molson Coors / TAP 7,824 43.17 -1% 185 -18% <1% 14% 12x 12x 4.3x
2 Microsoft / MSFT 255,877 30.50 17% 214 -23% <1% 11% 11x 10x 6.1x
3 Kimberly-Clark / KMB 28,202 71.56 -3% 89 -40% <1% 11% 14x 13x >9.9x
4 McCormick / MKC 6,081 50.45 0% 109 -42% <1% 10% 17x 15x n/m
5 Live Nation / LYV 2,031 10.72 29% 496 -2% <1% 9% n/m n/m n/m
6 Johnson & Johnson / JNJ 176,413 64.60 -1% 82 -45% <1% 9% 13x 12x 6.5x
7 Kraft Foods / KFT 68,161 38.58 3% 96 -5% <1% 6% 17x 15x n/m
8 Clorox / CLX 8,794 67.75 2% 53 -42% <1% 6% 17x 15x n/m
9 Automatic Data / ADP 26,496 54.01 0% 66 -45% <1% 6% 20x 18x >9.9x
10 Constellation Energy / CEG 7,349 36.46 -8% 96 -40% <1% 6% 12x 15x 1.0x


New Positions Sold Out Positions
None None

Portfolio Metrics
*
Sector Weightings
*

Portfolio size $57 million
Top 10 as % of portfolio 90%
Median market value $18 billion
Average market value $60 billion
Median P/E (this FY) 15x
Median P/E (next FY) 14x
Median P / tangible book 4.3x
*
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.


Consumer Non-
Cyclical
39%
Services
22%
Technology
12%
Other
27%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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
Market
Price Shares Owned
Holdings
P/E (Est.)
Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Philip Morris / PM 139,723 80.44 2% 948 2% <1% 13% 17x 15x n/m
2 Canadian Natural / CNQ 41,305 37.66 1% 2,417 0% <1% 15% 17x 11x 1.9x
3 Berkshire Hathaway / BRK.A 194,903 117,980.00 3% 1 0% <1% 11% 17x 15x 2.0x
4 Franklin Resources / BEN 25,071 116.10 21% 581 10% <1% 11% 13x 12x 4.1x
5 MasterCard / MA 50,284 396.14 6% 160 0% <1% 11% 18x 15x >9.9x
6 Consolidated-Tomoka / CTO 180 30.90 14% 1,543 0% 26% 8% n/a n/a 1.6x
7 Wynn Resorts / WYNN 14,145 113.20 2% 78 new <1% 1% 20x 18x 5.6x
8 Google / GOOG 197,003 605.91 -6% 38 0% <1% 4% 14x 12x 4.0x
9 Reynolds American / RAI 23,165 39.74 -4% 1,484 0% <1% 10% 13x 12x n/m
10 Coca-Cola / KO 154,308 67.94 -3% 476 0% <1% 5% 17x 15x >9.9x


Top Holdings of Wintergreen Advisers – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 Canadian Natural / CNQ 41,305 37.66 1% 2,417 0% <1% 15% 17x 11x 1.9x
2 Philip Morris / PM 139,723 80.44 2% 948 2% <1% 13% 17x 15x n/m
3 Franklin Resources / BEN 25,071 116.10 21% 581 10% <1% 11% 13x 12x 4.1x
4 Berkshire Hathaway / BRK.A 194,903 117,980.00 3% 1 0% <1% 11% 17x 15x 2.0x
5 MasterCard / MA 50,284 396.14 6% 160 0% <1% 11% 18x 15x >9.9x
6 Reynolds American / RAI 23,165 39.74 -4% 1,484 0% <1% 10% 13x 12x n/m
7 Consolidated-Tomoka / CTO 180 30.90 14% 1,543 0% 26% 8% n/a n/a 1.6x
8 Coca-Cola / KO 154,308 67.94 -3% 476 0% <1% 5% 17x 15x >9.9x
9 Google / GOOG 197,003 605.91 -6% 38 0% <1% 4% 14x 12x 4.0x
10 Coca-Cola FEMSA / KOF 4,072 99.53 5% 193 0% <1% 3% 26x 22x .7x


New Positions Sold Out Positions
Wynn Resorts / WYNN None


Portfolio Metrics
*
Sector Weightings
*

Portfolio size $600 million
Top 10 as % of portfolio 91%
Median market value $33 billion
Average market value $70 billion
Median P/E (this FY) 17x
Median P/E (next FY) 15x
Median P / tangible book 3.2x
*
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.

Financial
33%
Consumer Non-
Cyclical
31%
Energy
15%
Other
21%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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.
Market Price Shares Owned Holdings P/E (Est.) Price/
Value
Recent ∆ from Recent ∆ from
as % of
This Next
Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30 Co. Fund* FY FY Book
1 EXCO Resources / XCO 1,514 7.05 -33% 28,426 3% 13% 12% 11x 15x 1.0x
2 Bank of Ireland / IRE 5,603 7.35 73% 73,333 new 10% 32% n/a n/a .7x
3 BankUnited / BKU 2,221 22.83 4% 13,721 0% 14% 19% 13x 14x 1.5x
4 Air Lease / AL 2,545 25.27 7% 4,250 0% 4% 6% 46x 19x 1.2x
5 Assured Guaranty / AGO 3,189 17.50 33% 19,835 14% 11% 21% 6x 6x .7x
6 Sun Bancorp NJ / SNBC 240 2.80 16% 21,279 0% 25% 4% 93x 23x .9x
7 Cascade Bancorp / CACB 277 5.86 34% 11,469 0% 24% 4% n/m n/m 1.8x
8 Key Energy Services / KEG 2,220 14.73 -5% 348 -5% <1% 0% 16x 9x 5.1x
9 Cooper Tire & Rubber / CTB 992 15.93 14% 206 -22% <1% 0% 13x 9x 2.2x
10 Hanesbrands / HBI 2,579 26.54 21% 152 -13% <1% 0% 10x 9x >9.9x


Top Holdings of WL Ross & Co. – By Dollar Value
Market Price Shares Owned Holdings P/E (Est.) Price/
Value Recent ∆ from Recent ∆ from
as % of
This Next Tang.
Company / Ticker ($mn) ($) Dec. 30 (‘000) Sep. 30
Co. Fund*
FY FY Book
1 Bank of Ireland / IRE 5,603 7.35 73% 73,333 new 10% 32% n/a n/a .7x
2 Assured Guaranty / AGO 3,189 17.50 33% 19,835 14% 11% 21% 6x 6x .7x
3 BankUnited / BKU 2,221 22.83 4% 13,721 0% 14% 19% 13x 14x 1.5x
4 EXCO Resources / XCO 1,514 7.05 -33% 28,426 3% 13% 12% 11x 15x 1.0x
5 Air Lease / AL 2,545 25.27 7% 4,250 0% 4% 6% 46x 19x 1.2x
6 Cascade Bancorp / CACB 277 5.86 34% 11,469 0% 24% 4% n/m n/m 1.8x
7 Sun Bancorp NJ / SNBC 240 2.80 16% 21,279 0% 25% 4% 93x 23x .9x
8 United Continental / UAL 7,848 23.75 26% 370 -18% <1% 1% 5x 4x n/m
9 Key Energy Services / KEG 2,220 14.73 -5% 348 -5% <1% 0% 16x 9x 5.1x
10 Hanesbrands / HBI 2,579 26.54 21% 152 -13% <1% 0% 10x 9x >9.9x


New Positions Sold Out Positions
Bank of Ireland / IRE Buffalo Wild Wings / BWLD
Cincinnati Bell / CBB
Manitowoc / MTW


Portfolio Metrics
*

Sector Weightings
*

Portfolio size $1.7 billion
Top 10 as % of portfolio 100%
Median market value $2.2 billion
Average market value $2.7 billion
Median P/E (this FY) 13x
Median P/E (next FY) 11x
Median P / tangible book 1.4x
*
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.


Financial
80%
Energy
12%
Transportation
7%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Profiling 20 Superinvestor Holdings
Ambassadors Group (EPAX) – Lane Five ^
Services: Personal Services

SPOKANE WA, 509-568-7901 www.ambassadorsgroup.com
Trading Data Consensus EPS Estimates Valuation
Price: $5.45 (as of 2/24/12) Month # of P/E FYE 1/1/12 32x
52-week range: $3.88–$11.11 Latest Ago Ests P/E FYE 12/31/12 32x
Market value: $95 million This quarter -$0.49 -$0.48 1 P/E FYE 12/31/13 24x
Enterprise value: $37 million Next quarter 0.75 0.69 1 P/E FYE 12/31/14 n/a
Shares outstanding: 17.5 million FYE 12/31/12 0.17 0.09 1 EV/ LTM revenue 0.6x
Ownership Data FYE 12/31/13 0.23 0.18 1 EV/ LTM EBIT 17x
Insider ownership: 2% FYE 12/31/14 n/a n/a n/a P / tangible book 1.5x
Insider buys (last six months): 7 LT growth n/a n/a n/a Greenblatt Criteria
Insider sales (last six months): 4 EPS Surprise Actual Estimate LTM EBIT yield 6%
Institutional ownership: 83% 2/8/12 -$0.45 -$0.45 LTM pre-tax ROC n/m

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 69 89 115 98 99 76 66 66 5 2
Gross profit 67 78 96 79 84 66 59 59 4 2
Adjusted operating income 31 34 42 25 30 10 2 2 -11 -11
Adjusted net income 22 27 31 19 20 8 3 3 -7 -8
Adjusted diluted EPS 1.10 1.30 1.58 0.96 1.06 0.42 0.17 0.17 -0.35 -0.45
Dividend 0.28 0.37 0.46 0.46 0.24 0.24 0.24 0.24 0.06 0.06
Shares out (avg) 20 21 20 19 19 19 18 18 19 17
Cash from operations 38 37 16 25 16 22 -7 -7 13 8
Capex 2 7 19 5 6 5 4 4 1 1
Free cash flow 36 31 -3 20 10 16 -10 -10 12 7
… % of revenue:
Gross profit 96.0% 87.1% 83.8% 80.6% 85.0% 86.9% 88.9% 88.9% 91.7% 95.0%
Adjusted operating income 44.3% 38.4% 36.5% 25.9% 30.6% 13.1% 3.2% 3.2% -218.8% -560.0%
Capex 3.3% 7.3% 16.9% 5.3% 6.0% 7.1% 5.4% 5.4% 22.9% 35.0%
Cash, investments 117 133 85 74 81 79 59 59 79 59
Total current assets 119 140 93 83 88 86 74 74 86 74
PP&E, net 5 12 28 29 29 28 26 26 28 26
Total assets 125 154 122 124 128 129 114 114 129 114
Tangible assets 125 154 122 115 118 116 101 101 116 101
Current liabilities 58 70 49 55 36 41 35 35 41 35
Debt 1 0 0 0 0 0 0 0 0 0
Total liabilities 59 70 49 57 37 43 37 37 43 37
Tangible equity 67 84 72 58 81 73 64 64 73 64
TBV / tangible assets 53% 55% 59% 50% 69% 63% 63% 63% 63% 63%
TBV per share 3.27 4.09 3.69 3.02 4.25 3.82 3.60 3.65 3.86 3.65

Ten-Year Stock Price Performance and Trading Volume Dynamics

$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Feb 12 Feb 11 Feb 10 Feb 09 Feb 08 Feb 07 Feb 06 Feb 05 Feb 04 Feb 03

Value-oriented Equity Investment Ideas for Sophisticated Investors

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BUSINESS OVERVIEW
Ambassadors is an educational travel company focused on
international travel for students. The company has operated
the “People to People” travel programs since 1967.
People to People is a non-profit organization founded by
President Eisenhower and originally administered by the
U.S. State Department. Ambassadors Group has exclusive
rights to develop student programs for kindergarten through
high school students through 2020 and non-exclusive rights
to develop other programs using the People to People brand.

INVESTMENT HIGHLIGHTS
• Competitive edge due to association with People
to People, 45 years of travel experience, and
academic credit granted for the programs by high
schools and colleges. The company also benefits
from the perception that its programs improve
students’ chance of admission to top colleges.
• Strong results prior to latest recession. Net
income per share grew from $0.56 in 2000 to $1.55
in 2007 and enrolled delegates more than doubled.
Bookings were slow to recover after the 2001
recession but growth accelerated rapidly after 2003.
• Cash and securities of $58.6 million and no debt
as of 12/31/2011 provide downside protection.

INVESTMENT RISKS & CONCERNS
• 55% decline in participants since 2007. Decline
coincided with a severe recession, but enrollment
has continued to decline during the recovery. As of
Feb. 8, enrolled revenue for 2012 programs was
down 10.5% from the same point in 2011
*
.
• Opex control has been lacking. Management aims
to cut expenses by $4.5-$5.5 million in 2012.
*
Opex
remains elevated as a percentage of revenue.
• Geopolitical risks. Despite the company’s good
reputation for safety, perceived increases in the risk
of terrorism or war may decrease future enrollment.
• People to People deal expires in 2020. Renewal
terms may have a large impact on equity value.

CATALYSTS
• Management forecasts a decline in revenues to
$135-145 million in 2012 with net income of $3-5
million, reflecting travel decisions made in 2011.
The market may not fully appreciate the fact that
economic strength this year will not be fully
apparent until 2013 bookings are made in late 2012.
*
Q4 2011 earnings release: http://bit.ly/wYBPqC
We thank Ravi Nagarajan for his analysis of Ambassadors Group.

SELECTED OPERATING DATA

FYE December 31 2006 2007 2008 2009 2010 2011
Revenue ($mn)
1
219 277 229 204 162 155
Change (y-y) 22% 26% -17% -11% -20% -4%
Enrolled delegates
2
(‘000) 43.1 52.7 41.9 34.2 26.7 23.9
Change (y-y) 14% 22% -20% -18% -22% -10%
Selected items as % of revenue
1
:
Sales & marketing 14% 14% 18% 19% 26% 26%
General & administrative 5% 6% 5% 7% 8% 11%
Depreciation 1% 1% 1% 2% 3% 3%
Capex
3
3% 7% 2% 3% 3% 2%
Gross margin 35% 35% 34% 41% 41% 38%
Operating income 16% 15% 11% 15% 6% 1%
Net income 12% 11% 8% 10% 5% 2%
Free cash flow
4
14% 4% 9% 5% 11% -6%
% of revenue by travel destination:
Europe 49% 57% 61% 57% 55% n/a
South Pacific 29% 24% 16% 19% 24% n/a
Asia (primarily China) 14% 14% 17% 20% 14% n/a
Other 8% 5% 6% 4% 7% n/a
Selected items as % of total assets:
Cash and equivalents 24% 14% 6% 6% 5% 17%
Securities 63% 56% 56% 58% 57% 35%
Prepaid program costs 2% 3% 3% 2% 3% 12%

Property and equipment 8% 23% 23% 23% 21% 23%
Intangibles and goodwill
5
0% 0% 8% 8% 10% 12%
Selected statistics ($’000):
Revenue per delegate 5.1 5.3 5.4 5.9 6.0 6.3
Gross margin per delegate 1.8 1.8 1.8 2.4 2.4 2.3
Marketing spend/delegate
6
0.6 0.6 0.9 1.2 1.5 1.8
Diluted net income/share 1.25 1.55 0.95 1.05 0.42 0.17
Dividends per share 0.37 0.46 0.46 0.24 0.24 0.24
Return on equity 35% 40% 27% 26% 9% 4%
∆ shares outstanding 0% -6% -3% 1% -4% -4%
1
Includes gross revenue from non-directly delivered programs. All revenue,
percent of revenue, and margin figures in the table are calculated based on
total gross revenues including non-directly delivered programs. The company’s
GAAP financial statements report revenue as net revenue from non-directly
delivered programs plus revenue from directly delivered programs.
2
Delegates are mostly student participants of Ambassador’s travel programs.
3
2007 capex of $19.3 million included $12.8 million for construction of new HQ.
4
FCF = Cash from operations less purchase of property, plant, and equipment.
5
Substantially all of the goodwill is related to 2008 acquisition of BookRags for
$12.3 million, of which $9.3 million was paid in cash with the balance paid via
issuance of 233,584 shares valued at $2.9 million.
6
Spending on marketing primarily generate business the following year.
Therefore, we track marketing spending per delegate traveled the next year (for
example, marketing spending in 2010 per delegate traveled in 2011).

MAJOR HOLDERS

Chairman Ueberroth 4% | CEO Thomas 4% | Other insiders
2% | Stadium Capital 8% | FMR 7% | Bandera 7%

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
Ambassadors has a long-term record of impressive growth and returns on capital. Recent profitability has been pressured by
revenue declines and high opex. The company has a strong balance sheet and should benefit from a recovery, assuming
enrollment eventually returns to the 40-50,000 level that prevailed prior to the recession. Improving economic conditions in
2012 will not be fully reflected in travel bookings until 2013. It is worth noting that Ambassadors was slow to bounce back
after the 2001 recession. Similar dynamics may be at work currently due to the long lead time required to generate travel
bookings. The current valuation appears to be giving little credit to recovery potential over the next two to three years.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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AMBASSADORS GROUP – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
(in thousands except per-share amounts) Conservative Base Case Aggressive
Valuation Methodology
Valuation for the operating business is based on forecasted 2013 revenue
and net earnings by business segment with various P/E multiples assigned.
We add back “deployable cash” not used in the operating business.
Ambassador Programs and other:

Management’s 2012 revenue guidance (direct & indirect) 130,000 135,000 140,000
Revenue growth in 2013 0% 10% 20%
Projected revenue in 2013 (direct & indirect) 130,000 148,500 168,000
Gross margin percentage 36% 37% 38%
Projected gross margin in 2013 - Ambassador Programs 46,800 54,945 63,840


BookRags segment:

Projected 2013 revenue 3,500 3,750 4,000
Gross margin percentage 85.0% 87.5% 90.0%
Projected gross margin in 2013 - BookRags 2,975 3,281 3,600


Total gross margin - 2013, both segments 49,775 58,226 67,440


Sales and marketing expense - 2013:

Sales and marketing as percentage of total revenue 26.0% 24.0% 22.0%
Sales and marketing expenses 34,710 36,540 37,840


General and administrative expense - 2013:

General and administrative as percentage of total revenue 10.0% 9.0% 8.0%
General and administrative expenses 13,350 13,703 13,760


Operating income - 2013: 1,715 7,984 15,840
Tax rate 30% 30% 30%
Net income - 2013 1,201 5,589 11,088
Earnings multiple 10 12 14
Valuation of operating business excluding cash 12,005 67,064 155,232
Plus “deployable cash” as of 12/31/2011 38,580 38,580 38,580
Valuation of Ambassadors Group 50,585 105,644 193,812
Shares outstanding at 11/2/2011 17,493 17,493 17,493
Valuation per share 2.89 6.04 11.08
Implied upside/downside to recent price ($5.50 as of 2/14/12) -47% 10% 101%
Implied valuation to tangible book at 12/31/11 0.79 1.66 3.04
Ambassador Programs and Other: Based on 2/8/2012 press release, management is guiding for total revenues between $135-$145 million for all operations.
We use a range from $130-$140 million for the Ambassador program given that guidance also includes revenue from BookRags. We assume revenue growth of 0
to 20% for 2013. Gross margin is between 36-38% based on management’s guidance for 2012. Note that even the “aggressive” case projects revenues for 2013
only slightly higher than 2010 and well below 2009 revenue.
BookRags Segment: Projection of between $3.5-$4.0 million in revenue for 2013 with margins between 85% and 90%. Management has not provided specific
guidance for this segment and the estimate is approximate. BookRags was acquired for $12.3 million on May 15, 2008.
Sales and Marketing Expense: Sales and marketing expense as a percentage of total gross revenues (direct and indirect) averaged 16% from 2001 to 2009
before climbing to 26% in 2010 and 2011. Sales and marketing spending was $40.4 million in 2011. We assume some success in cost cutting over the next two
years based on management’s guidance but have not assumed a return to 2001-2009 levels as a percentage of total gross revenues.
General and Administrative Expense: General and administrative expense as a percentage of total gross revenues (direct and indirect) averaged 5% from 2001
to 2009 but climbed to 11% for 2011. Spending was $16.6 million in 2011 but this included $1.9 million in legal fees that should be non-recurring. We do not
assume a full return to 2001-2009 averages but anticipate spending to be at levels materially lower than 2011 and on par with 2010 levels.
Tax Rate and Net Income: We do not include investment income in this calculation as we are attempting to evaluate the value of the operating business only and
will add back deployable cash separately. As a result, we assume a tax rate closer to the statutory rate compared to the actual rate in recent years which has
been influenced by a large portfolio of municipal securities with tax exempt status.
Valuation: We use an earnings multiple between 10 and 14 to arrive at an intrinsic value estimate for the operating business and then add back “deployable cash”
as of 12/31/2011. “Deployable Cash” is a non-GAAP metric defined by management as the sum of cash equivalents, short term securities and pre-paid program
costs less participants’ deposits, accounts payable, accruals, and other liabilities. The intent is to measure the cash available for investment opportunities. This
cash is theoretically available for distribution to shareholders.
Source: Company filings, Ravi Nagarajan analysis, assumptions and estimates, The Manual of Ideas.

Management’s guidance for 2012 from 2/8/2012 earnings release and Q4 2011 conference call:
- Consolidated gross revenues for all programs and operations between $135-$145 million.
- Consolidated gross margin as % of gross revenues of 36 to 38 percent
- Net income before any special items between $3 million and $5 million
- Variable expenses to be cut by $4.5 to $5.5 million, but net cut may be lower due to redirecting some of savings to restructure marketing initiatives.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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AMBASSADORS GROUP – CASH FLOW ANALYSIS, 2002-2011
($ in thousands) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Cash flows from operating activities:

Net Income 2,956 8,116 20,337 18,546 31,047 26,692 22,410 15,647 10,154 10,798
Adjustments to reconcile net income to OCF:

Depreciation and amortization 4,742 4,646 4,364 3,426 2,532 1,447 1,175 962 935 775
Stock-based compensation 1,475 2,022 1,989 2,061 1,952 2,057 455 45 - -
Deferred income tax benefit 420 1,399 568 1,034 (71) (748) 130 894 44 157
Loss on disposition and impairment of PP&E 246 1,480 428 (25) 155 - - - - -
Excess (shortfall) tax benefit from stock comp (160) 441 (92) 134 (2,707) (2,376) - - - -
Loss on foreign currency contracts - - 962 759 - - - - - -
Equity in earnings on investment - - - - - (25) (11) - (33) -
Change in assets and liabilities:

Accounts receivable and other assets 581 68 (45) (1,147) 34 (608) 57 110 (142) 52
Prepaid program costs and expenses (10,069) (55) 985 (533) 162 (2,190) 865 (853) (92) (15)
Accounts payable, accrued expenses, other 194 223 (329) (966) 1,260 (230) 3,856 713 4,070 265
Participants’ deposits (7,040) 3,299 (13,029) 1,443 (17,928) 13,188 8,855 10,388 2,319 9,350
Net cash provided by operating activities (6,655) 21,639 16,138 24,732 16,436 37,207 37,792 27,906 17,255 21,382
Cash flows from investing activities:

Purchase of available-for-sale securities (48,693) (59,331) (58,039) (138,995)
28,948 (6,468) (13,296) (19,086) (12,069) 1,459
Proceeds from available-for-sale securities 83,035 59,764 52,716 137,385
Purchase and construction of PP&E (3,101) (4,461) (5,157) (5,042) (19,271) (6,455) (2,296) (1,911) (1,070) (200)
Proceeds from sale of PP&E 49 253 19 51 - - - - - -
Purchase of intangibles (493) (941) (726) (207) - - - - - -
Adjustments to goodwill - - (13) - - - - - - -
Net cash paid for acquisition - - - (9,373) - - - - - -
Net cash provided by investing activities 30,797 (4,716) (11,200) (16,181) 9,677 (12,923) (15,592) (20,997) (13,139) 1,259
Cash flows from financing activities:

Contribution from parent company - - - - - - - - - 10,400
Dividend to parent company - - - - - - - - - (20,493)
Repurchase of common stock (7,590) (13,406) (609) (10,156) (41,163) (10,710) (3,741) (2,568) - -
Dividend payment to shareholders (4,258) (4,594) (4,581) (8,801) (8,940) (7,655) (5,729) (4,630) (1,100) -
Proceeds from exercise of stock options 227 700 838 398 1,969 1,753 3,328 1,515 1,147 425
Excess tax benefit from stock comp 160 (441) 92 (134) 2,707 2,376 - - - -
Capital lease payments and other - - (11) (150) (189) (180) (178) (142) (13) -
Net cash provided by financing activities (11,461) (17,741) (4,271) (18,843) (45,616) (14,416) (6,320) (5,825) 34 (9,668)

Net increase in cash equivalents 12,681 (818) 667 (10,292) (19,503) 9,868 15,880 1,084 4,150 12,973

Free cash flow:

Cash flow from operating activities (6,655) 21,639 16,138 24,732 16,436 37,207 37,792 27,906 17,255 21,382
Less purchase of PP&E (3,101) (4,461) (5,157) (5,042) (19,271) (6,455) (2,296) (1,911) (1,070) (200)
Adjustment for HQ building in 2007 - - - - 12,800 - - - - -
Free cash flow (9,756) 17,178 10,981 19,690 9,965 30,752 35,496 25,995 16,185 21,182

FCF as a percentage of net income n/a 212% 54% 106% 32% 115% 158% 166% 159% 196%

D&A as % of gross revenue (indirect & direct) 3% 3% 2% 1% 1% 1% 1% 1% 1% 1%
Capex as % of gross revenue (indirect & direct) 2% 3% 3% 2% 7% 3% 1% 1% 1% 0%

FCF as % of gross revenue (indirect & direct) -6% 11% 5% 9% 4% 14% 20% 18% 15% 22%
Source: Company filings, Ravi Nagarajan analysis, The Manual of Ideas.
Increase represents “accelerated
payments made for airline costs
related to 2012 travel program”
BookRags acquisition: Total purchase price for BookRags was $12.3 million, of
which $9.4 million was paid in cash with the balance in stock (233,584 shares
worth $2.9 million). There have been no other acquisitions over the past ten

$140 million, or 79% of FCF, returned to shareholders

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Baker Hughes (BHI) – Greenhaven ^
Energy: Oil Well Services & Equipment, Member of S&P 500 HOUSTON TX, 713-439-8600 www.bakerhughes.com
Trading Data Consensus EPS Estimates Valuation
Price: $51.96 (as of 2/24/12) Month # of P/E FYE 1/1/12 13x
52-week range: $41.91–$81.00 Latest Ago Ests P/E FYE 12/31/12 11x
Market value: $22.7 billion This quarter $1.12 $1.15 30 P/E FYE 12/31/13 9x
Enterprise value: $25.7 billion Next quarter 1.12 1.15 30 P/E FYE 12/31/14 8x
Shares outstanding: 436.5 million FYE 12/31/12 4.91 5.08 33 EV/ LTM revenue 1.3x
Ownership Data FYE 12/31/13 5.76 5.98 32 EV/ LTM EBIT 10x
Insider ownership: <1% FYE 12/31/14 6.90 6.92 10 P / tangible book 2.6x
Insider buys (last six months): 21 LT growth 30.2% 30.1% 7 Greenblatt Criteria
Insider sales (last six months): 14 EPS Surprise Actual Estimate LTM EBIT yield 10%
Institutional ownership: 88% 1/24/12 $1.22 $1.32 LTM pre-tax ROC 22%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 7,186 9,027 10,428 11,864 9,664 14,414 19,831 19,831 4,423 5,387
Gross profit 2,162 3,151 3,583 3,910 2,267 3,230 4,567 4,567 1,002 1,269
Adjusted operating income 1,233 1,934 2,278 2,438 750 1,551 2,915 2,915 618 841
Adjusted pretax income 1,279 3,737 2,257 2,381 629 1,416 2,694 2,694 576 784
Adjusted net income 874 2,399 1,514 1,697 439 946 2,094 2,094 391 629
Adjusted diluted EPS 2.58 7.26 4.76 5.53 1.42 2.40 4.80 4.80 0.91 1.44
Dividend 0.48 0.52 0.52 0.56 0.60 0.60 0.60 0.60 0.15 0.15
Shares out (avg) 339 331 318 307 310 394 436 437 432 438
Cash from operations 955 590 1,475 1,614 1,239 856 1,518 1,518 278 836
Capex 478 922 1,127 1,303 1,086 1,491 2,461 2,461 486 810
Free cash flow 477 -332 348 311 153 -635 -943 -943 -208 26
… % of revenue:
Gross profit 30.1% 34.9% 34.4% 33.0% 23.5% 22.4% 23.0% 23.0% 22.7% 23.6%
R&D 4.2% 3.8% 3.6% 3.6% 4.1% 3.0% 2.3% 2.3% 2.4% 2.3%
Adjusted operating income 17.2% 21.4% 21.8% 20.5% 7.8% 10.8% 14.7% 14.7% 14.0% 15.6%
Cash, investments 774 1,104 1,054 1,955 1,595 1,706 1,050 1,050 1,706 1,050
Receivables 1,673 2,055 2,383 2,759 2,331 3,942 4,878 4,878 3,942 4,878
Inventory 1,126 1,529 1,714 2,021 1,836 2,594 3,222 3,222 2,594 3,222
PP&E, net 1,356 1,801 2,345 2,833 3,161 6,310 7,415 7,415 6,310 7,415
Tangible assets 6,328 7,168 8,326 10,274 9,826 15,548 17,731 17,731 15,548 17,731
Short-term debt 10 1 15 558 15 331 224 224 331 224
Long-term debt 1,078 1,074 1,069 1,775 1,785 3,554 3,845 3,845 3,554 3,845
Tangible equity 3,219 3,706 4,775 5,220 5,671 6,662 8,865 8,865 6,662 8,865
TBV / tangible assets 51% 52% 57% 51% 58% 43% 50% 50% 43% 50%
TBV per share 9.48 11.21 15.02 17.00 18.30 16.91 20.33 20.24 15.42 20.24
EBIT/capital employed 40% 54% 50% 42% 12% 17% 22% 22% 23% 17%

Ten-Year Stock Price Performance and Trading Volume Dynamics

$0
$20
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$60
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Feb 12 Feb 11 Feb 10 Feb 09 Feb 08 Feb 07 Feb 06 Feb 05 Feb 04 Feb 03

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BUSINESS OVERVIEW
Baker Hughes is an integrated oilfield service company with
worldwide operations. The company has 57,000+ employees.
Baker Hughes’ products and services fall into two groups:
Drilling and Evaluation includes drill bits, drilling services,
wireline services, and drilling and completion fluids.
Completion and Production includes completion, wellbore
intervention, intelligent production systems, artificial lift,
tubular services, upstream chemicals, and pressure pumping.

INVESTMENT HIGHLIGHTS
• Large supplier of oilfield services to oil and gas
industry, benefiting from E&P companies’ capex
for exploration, field development and production.
Baker Hughes has a global presence, with slightly
more than one-half of revenue from North America.
The latter has had a better pretax margin profile.
• Technology leader. In the GOM, oil production
began in 2011 from the world’s deepest water depth
sub-sea wells using an innovative subsea separation
and boosting system. Baker Hughes also completed
the installation of the world’s first deepwater, fixed-
fiber integration into the sand face completion.
• Acquired BJ Services for $6.9 billion in cash and
stock in April 2010, adding a leader in the areas of
pressure pumping, stimulation and fracturing.
• Earnings growth continues, with EPS rising from
$2.06 in 2010 to $4.20 in 2011. Analyst estimates
call for EPS of $4.91 in 2012 and $5.76 in 2013.

INVESTMENT RISKS & CONCERNS
• Cyclical, rather capital-intensive business,
dependent on expectations for oil and natural gas
prices, economic growth, and hydrocarbon demand.
In 2011, capex of $2.5 billion materially exceeded
D&A of $1.3 billion, negatively impacting FCF. We
do not endorse management’s use of EBITDA due
to the very significant capex needs of the business.
• Well-served, competitive market that includes the
major companies such as Schlumberger, Halliburton
and Weatherford, where the breadth of capabilities
is a key differentiator. Other competitors participate
in only a few product lines, for example, National
Oilwell Varco, Champion Technologies, Ecolab,
Newpark Resources, and Frac Tech Services.

POTENTIAL CATALYSTS
• Continuing industry shift to oil could increase
demand by ~20% due to greater service intensity

MAJOR HOLDERS
Management <1% | Wellington 5% | Dodge & Cox 4% |
Capital World 4% | T Rowe 2% | JPM 2%
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 16% 14% -19% 49% 38%
∆ gross profit 14% 9% -42% 42% 41%
∆ assets 13% 20% -4% 101% 8%
∆ BV per share 25% 12% 6% 52% 2%
Revenue ($bn) 10.4 11.9 9.7 14.4 19.8
% of revenue by type:

Sale 50% 48% 50% 38% 32%
2

Service and rental 50% 52% 50% 62% 68%
2

% of revenue by geographic segment:

North America 43% 42% 35% 49% 55%
Latin America 9% 10% 12% 12% 12%
Europe, Africa, Russia 29% 29% 31% 22% 18%
Middle East, Asia Pacific 19% 19% 22% 17% 15%
Pretax margin by segment ($mn):

North America n/a 27% 6% 18% 19%
Latin America n/a 18% 7% 5% 10%
Europe, Africa, Russia n/a 20% 17% 9% 10%
Middle East, Asia Pacific n/a 20% 12% 8% 11%
Industrial services, other n/a 24% 10% 10% 4%
Corporate n/a -3% -5% -3% -3%
Selected items as % of revenue:

Gross profit 34% 33% 23% 22% 23%
R&D 4% 4% 4% 3% 2%
EBIT (adjusted)
1
22% 21% 8% 11% 15%
Net income (adjusted)
1
15% 14% 5% 7% 11%
D&A 5% 5% 7% 7% 7%
Capex 11% 11% 11% 10% 12%
Industry gross margin
3
38% 32% 33% 34% 32%
Industry EBIT margin
3
19% 16% 8% 10% 5%
Tangible assets ($bn) 8.3 10.3 9.8 15.5 17.7
Selected items as % of tangible assets:

Cash, investments 13% 19% 16% 11% 6%
Inventory 21% 20% 19% 17% 18%
PP&E, net 28% 28% 32% 41% 42%
ST debt 0% 5% 0% 2% 1%
LT debt 13% 17% 18% 23% 22%
Tangible equity 57% 51% 58% 43% 50%
Return on tang. equity 36% 34% 8% 15% 27%
Return on equity (ROE) 26% 26% 6% 9% 14%
ROE – industry median
3
19% 17% 9% 8% 5%
Trailing P/E (end) 17x 6x 30x 28x 12x
Forward P/E (end) 15x 24x 20x 14x 10x
Diluted EPS (cont.) ($) 4.73 5.29 1.35 2.06 3.97
Dividends per share ($) 0.52 0.56 0.60 0.60 0.60
BV per share (end) ($) 20 22 24 36 37
Share price (end) ($) 81 32 41 57 49
Shares out (avg) (mn) 318 307 310 394 436
∆ shares out (avg) -4% -3% 1% 27% 11%
1
Adjusted for unusual items of -$62 million in 2008, -$18 million in 2009,
-$134 million in 2010, and -$355 million in 2011, .
2
Based on data for the first nine months of 2011.
3
Oil Well Services & Equipment industry median.

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 one of the largest oilfield service companies, Baker Hughes should keep benefiting from growing demand for fossil fuels.
While the near-term outlook for economic growth is uncertain, high oil prices and an 0.8 million barrel per day increase in
global oil demand in 2012 (IEA) should drive robust drilling activity. Baker Hughes trades at ~10x forward EPS, but we note
that estimated capex of $3.1-3.4 billion should materially exceed D&A in 2012. We don’t find the shares sufficiently cheap.



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BAKER HUGHES – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011 and average
EBIT margin for past seven fiscal years

Based on average diluted EPS from
continuing operations for the past seven
fiscal years

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013





TTM net sales: $20 billion

average of

Consensus FY13 EPS estimate: $5.76
multiplied by

FY05 continuing ops EPS: $2.56

minus
Average 7-year EBIT margin: 16.3%

FY06 continuing ops EPS: $7.21

Assumed haircut to FY13 consensus
equals

FY07 continuing ops EPS: $4.73

EPS estimate: 5% * $5.76
Estimated EBIT: $3.2 billion

FY08 continuing ops EPS: $5.29

equals
multiplied by

FY09 continuing ops EPS: $1.35

Revised FY13 EPS estimate: $5.47
Assumed fair value multiple of EBIT:

FY10 continuing ops EPS: $2.06

multiplied by
6x

FY11 continuing ops EPS: $3.97

Corresponding industry P/E: 13.5x (*)
equals

equals

equals
Estimated fair enterprise value of

Average seven-year EPS: $3.88

Industry multiple-implied fair value:
Baker Hughes: $19 billion

minus

$32 billion ($74 per share)
plus

Assumed adjustment to average

multiplied by
Cash, ST investments: $1.1 billion

seven-year EPS: 20% * $3.88

Assumed BHI multiple as a
minus

equals

percentage of the industry multiple:
Total debt: $4.1 billion

Revised “normalized” EPS: $4.66

110%
equals

multiplied by

(14.9x fair value P/E multiple)
Estimated fair value of the common

Assumed fair value P/E: 15x

equals
equity of Baker Hughes:

equals

Estimated fair value of the common
$16 billion, or $38 per share

Estimated fair value of the common

equity of Baker Hughes:
(based on 440 million shares out)

equity of Baker Hughes:

$35 billion ($81 per share)
28% downside from the recent

$30 billion ($70 per share)

(based on 440 million shares out)
stock price ($52 per share)

(based on 440 million shares out)

56% upside to the recent

34% upside to the recent

stock price ($52 per share)

stock price ($52 per share)

(*) Represents Oil Well Services & Equipment industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


BAKER HUGHES – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance Tang.
(Click to visit ∆ to Reach Tang. TTM EPS Yield LTM Rev./ ∆ Rev. % TTM Rev. Equity/
relevant websites) 7-Year MV EV Book/ FCF This Next Rev./ Empl. Last Gross Adj. Tang.
Low High ($mn) ($mn) MV Yield TTM FY FY EV ($000) TTM Q Profit EBIT Assets
Halliburton / HAL -67% 50% 35,544 37,516 32% 2% 8% 10% 12% 66% 365 38% 37% 20% 19% 52%
Schlumberger / SLB -60% 44% 106,502 111,608 11% 2% 4% 6% 7% 36% 351 37% 21% 21% 17% 34%
Weatherford / WFT -53% 203% 12,467 19,810 38% -6% 2% 5% 9% 62% 210 25% 33% 26% 10% 31%
Baker Hughes / BHI -53% 93% 22,679 25,698 39% -4% 8% 9% 11% 77% 373 38% 22% 23% 15% 50%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


BAKER HUGHES – FINANCIAL HIGHLIGHTS
2011 Financial Snapshot:

1
Charge of $315 million before-tax ($220 million after-tax) in the fourth quarter, the majority of
which relates to the noncash impairment associated with the decision to minimize the use of the
BJ Services trade name as part of our overall branding strategy for Baker Hughes.
2
Noncash tax benefit of $214 million associated with reorg of foreign subsidiaries in 3Q11.
3
$40 million loss ($26 million after-tax) related to extinguishment of $500 million notes due 2013.
4
Expenses of $70 million (before and after-tax) associated with increasing the allowance for
doubtful accounts and reserves in 2Q11 as a result of civil unrest in Libya.
2012 Management Guidance:

Source: Company presentation dated January 2012.

Baker Hughes publishes a useful industry rig count map and related statistics.

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BAKER HUGHES – SELECTED PRO FORMA FINANCIALS, 1Q08-4Q11 ($ in millions)

1
The presentation of Proforma Segment financial information includes results previously reported by BJ Services for the quarters ended March 31, 2008 through
December 31, 2009 and estimated BJ Services results for the quarter ended March 31, 2010 and the month of April 2010. The amounts for revenue and profit
before tax have been reclassified into Baker Hughes’ five reportable segments. Operating Profit before tax and segment profit for tax for these periods includes a
pro forma charge of $33 million per quarter, primarily for depreciation and amortization of tangible and intangible assets associated with the acquisition of BJ
Services. This pro forma charge has been allocated to the five reportable segments based on the actual allocation of these charges in May and June 2010. No
adjustments have been made for cost or revenue synergies or any other integration related items that may have affected these quarters.
2
Operating profit before tax is defined as profit before tax (“income before income taxes”) excluding certain identified costs.
3
Management identifies certain items to exclude from operating profit before tax.
4
The performance of the company’s segments is evaluated based on segment profit before tax, which is defined as income before income taxes, interest
expense, interest income, and certain gains and losses not allocated to the segments.
5
Corporate and other profit before tax includes those corporate expenses previously reported by BJ Services for the quarters ended March 31, 2008 through
December 31, 2009 and estimated BJ Services results for the quarter ended March 31, 2010 and the month of April 2010. Also included in each of these periods is
a pro forma credit of $3 million to interest expense.
6
The presentation of Proforma financials includes results previously reported by BJ Services for the quarters ended March 31, 2008 through December 31, 2009
and estimated BJ Services results for the quarter ended March 31, 2010 and the month of April 2010. Segment profit before tax for these periods includes pro
forma charges of $33 million per quarter primarily for depreciation and amortization of tangible and intangible assets associated with the acquisition of BJ Services.
7
In 2Q10 Baker Hughes’ results included results for BJ Services for May and June 2010. BJ Services supplied estimated results for the month of April 2010.
8
2Q11 includes expenses of $70 million (before and after-tax) associated with increasing reserves for doubtful accounts, inventory and certain other assets as a
result of civil unrest in Libya.
9
3Q11 includes a loss on early extinguishment of our 6.5% senior note due 2013 of $40 millions ($26 million after-tax).
10
4Q11 includes a charge of $315 million before-tax ($220 million after-tax), the majority of which related to the noncash impairment associated with the decision
to reduce the use of the BJ Services trade name as part of our overall branding strategy for Baker Hughes.
Source: Company supplemental financial information (Excel file).
Proforma Segment Revenue
1
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
North America 1,916 $ 1,999 $ 2,180 $ 2,224 $ 1,607 $ 1,070 $ 1,170 $ 1,306 $ 1,641 $ 1,728 $ 2,006 $ 2,210 $ 2,352 $ 2,368 $ 2,716 $ 2,821 $
Latin America 357 386 431 472 408 386 400 433 399 424 431 482 473 542 568 600
Europe/Africa/Russia/Caspian 819 975 943 899 843 804 716 806 815 767 757 793 771 806 850 898
Middle East/Asia Pacific 596 652 664 706 610 617 572 571 554 579 606 657 659 701 708 752
Industrial and Other 248 297 303 302 247 239 252 244 248 247 278 281 270 324 336 316
Proforma Total 3,936 $ 4,309 $ 4,521 $ 4,603 $ 3,715 $ 3,116 $ 3,110 $ 3,360 $ 3,657 $ 3,745 $ 4,078 $ 4,423 $ 4,525 $ 4,741 $ 5,178 $ 5,387 $
Speci al Items
3
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11
8
Q3 11 Q4 11
10
Total - $ - $ 5 $ 16 $ 100 $ 69 $ 35 $ 48 $ - $ - $ - $ - $ - $ 70 $ - $ 315 $
Proforma Segment Profi t Before Tax
1, 4
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11
8
Q3 11 Q4 11
10
North America 442 $ 441 $ 461 $ 503 $ 125 $ (100) $ (32) $ 35 $ 176 $ 223 $ 340 $ 478 $ 460 $ 440 $ 607 $ 422 $
Latin America 64 56 75 90 40 42 28 14 5 9 9 43 63 71 71 22
Europe/Africa/Russia/Caspian 138 195 184 157 164 139 83 105 84 69 47 64 91 47 105 99
Middle East/Asia Pacific 114 119 124 148 80 89 64 55 43 41 39 68 79 88 84 70
Industrial and Other 42 75 80 55 25 23 28 27 18 20 36 28 14 34 28 (23)
Proforma Total 800 $ 886 $ 924 $ 953 $ 434 $ 193 $ 171 $ 236 $ 326 $ 362 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 $
Corporate and Other Profi t before Tax
5
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11
8
Q3 11
9
Q4 11
Corporate, net interest and other (80) $ (165) $ (110) $ (157) $ (125) $ (151) $ (145) $ (163) $ (130) $ (153) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) $
Proforma Combi ned Depreci ati on and Amorti zati on
6
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
As reported by Baker Hughes 147 $ 155 $ 158 $ 177 $ 173 $ 182 $ 177 $ 179 $ 189 $ 261 $ 293 $ 326 $ 315 $ 331 $ 332 $ 343 $
As reported or estimated by BJ Serv ices 64 66 73 69 76 73 78 75 78 27 - - - - - -
Incremental Depreciation and Amortization 33 33 33 33 33 33 33 33 33 13 - - - - - -
Proforma Combined 244 $ 254 $ 264 $ 279 $ 282 $ 288 $ 288 $ 287 $ 300 $ 301 $ 293 $ 326 $ 315 $ 331 $ 332 $ 343 $
Proforma Combi ned Capi tal Expendi tures
6
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
As reported by Baker Hughes 227 $ 312 $ 301 $ 463 $ 281 $ 291 $ 222 $ 292 $ 190 $ 349 $ 466 $ 486 $ 429 $ 594 $ 628 $ 810 $
As reported or estimated by BJ Serv ices 149 121 173 117 121 76 80 41 37 25 - - - - - -
Proforma Combined 376 $ 433 $ 474 $ 580 $ 402 $ 367 $ 302 $ 333 $ 227 $ 374 $ 466 $ 486 $ 429 $ 594 $ 628 $ 810 $
Proforma Combi ned Revenue
6
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
North America 1,073 $ 1,152 $ 1,185 $ 1,281 $ 972 $ 692 $ 714 $ 787 $ 919 $ 1,486 $ 2,006 $ 2,210 $ 2,352 $ 2,368 $ 2,716 $ 2,821 $
Latin America 227 258 276 328 277 264 257 296 272 384 431 482 473 542 568 600
Europe/Africa/Russia/Caspian 722 863 828 796 742 710 626 696 720 736 757 793 771 806 850 898
Middle East/Asia Pacific 481 528 520 561 502 503 463 469 439 545 606 657 659 701 708 752
Industrial and Other 167 197 201 220 175 167 172 180 189 223 278 281 270 324 336 316
As reported by Baker Hughes 2,670 2,998 3,010 3,186 2,668 2,336 2,232 2,428 2,539 3,374 4,078 4,423 4,525 4,741 5,178 5,387
As reported or estimated by BJ Serv ices 1,266 1,311 1,511 1,417 1,047 780 878 932 1,118 371 - - - - - -
Proforma Combined 3,936 $ 4,309 $ 4,521 $ 4,603 $ 3,715 $ 3,116 $ 3,110 $ 3,360 $ 3,657 $ 3,745 $ 4,078 $ 4,423 $ 4,525 $ 4,741 $ 5,178 $ 5,387 $
Proforma Combi ned Segment Profi t Before Tax
4, 6
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
10
North America 311 $ 312 $ 298 $ 328 $ 115 $ (14) $ 28 $ 72 $ 141 $ 204 $ 340 $ 478 $ 460 $ 440 $ 607 $ 422 $
Latin America 43 40 47 66 22 32 16 8 9 13 9 43 63 71 71 22
Europe/Africa/Russia/Caspian 130 180 171 148 153 133 79 93 80 69 47 64 91 47 105 99
Middle East/Asia Pacific 96 101 95 122 72 74 50 45 30 40 39 68 79 88 84 70
Industrial and Other 32 56 59 45 18 14 14 24 17 18 36 28 14 34 28 (23)
As reported by Baker Hughes 612 $ 689 $ 670 $ 709 $ 380 $ 239 $ 187 $ 242 $ 277 $ 344 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 $
As reported or estimated by BJ Serv ices 221 230 287 277 87 (13) 17 27 82 31 - - - - - -
Incremental Depreciation and Amortization (33) (33) (33) (33) (33) (33) (33) (33) (33) (13) - - - - - -
BJ Serv ices 188 197 254 244 54 (46) (16) (6) 49 18 - - - - - -
Proforma Combined 800 $ 886 $ 924 $ 953 $ 434 $ 193 $ 171 $ 236 $ 326 $ 362 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 $
Proforma Combi ned Corporate and Other Costs
5, 6
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
7
Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
9
Q4 11
As reported by Baker Hughes (43) $ (138) $ (80) $ (100) $ (96) $ (117) $ (104) $ (120) $ (83) $ (142) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) $
As reported or estimated by BJ Serv ices (40) (30) (33) (60) (32) (37) (44) (46) (50) (12) - - - - - -
Decrease to interest ex pense 3 3 3 3 3 3 3 3 3 1 - - - - - -
Proforma Combined (80) $ (165) $ (110) $ (157) $ (125) $ (151) $ (145) $ (163) $ (130) $ (153) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) $

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Boston Scientific (BSX) – Appaloosa ^^
Health Care: Medical Equipment & Supplies, Member of S&P 500 NATICK MA, 508-650-8000 www.bostonscientific.com
Trading Data Consensus EPS Estimates Valuation
Price: $6.25 (as of 2/24/12) Month # of P/E FYE 1/1/12 22x
52-week range: $5.01–$7.96 Latest Ago Ests P/E FYE 12/31/12 15x
Market value: $9.1 billion This quarter $0.08 $0.11 23 P/E FYE 12/31/13 13x
Enterprise value: $13.1 billion Next quarter 0.10 0.11 23 P/E FYE 12/31/14 12x
Shares outstanding: 1,451.3 million FYE 12/31/12 0.42 0.46 24 EV/ LTM revenue 1.7x
Ownership Data FYE 12/31/13 0.48 0.51 24 EV/ LTM EBIT 14x
Insider ownership: <1% FYE 12/31/14 0.51 0.57 13 P / tangible book n/m
Insider buys (last six months): 19 LT growth -12.9% 6.5% 11 Greenblatt Criteria
Insider sales (last six months): 17 EPS Surprise Actual Estimate LTM EBIT yield 7%
Institutional ownership: 86% 2/2/12 $0.08 $0.08 LTM pre-tax ROC 32%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 6,283 7,821 8,357 8,050 8,188 7,806 7,622 7,622 2,002 1,848
Gross profit 4,897 5,614 6,015 5,581 5,612 5,207 4,963 4,963 1,342 1,188
R&D 680 1,008 1,091 1,006 1,035 939 895 895 225 231
Adjusted operating income 2,024 1,226 633 1,521 1,254 995 1,770 1,770 267 220
Adjusted pretax income 1,947 640 78 995 840 588 1,508 1,508 147 149
Adjusted net income 1,684 598 152 990 1,123 586 1,307 1,307 154 156
Adjusted diluted EPS 2.04 0.47 0.10 0.66 0.74 0.39 0.87 0.87 0.10 0.11
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Shares out (avg) 826 1,274 1,487 1,499 1,508 1,518 1,509 1,499 1,520 1,468
Cash from operations 903 1,845 934 1,216 835 325 1,008 1,008 449 349
D&A 152 474 620 543 511 513 421 421 132 96
Capex 497 439 486 418 362 278 315 315 69 94
Free cash flow 406 1,406 448 798 473 47 693 693 380 255
… % of revenue:
Gross profit 77.9% 71.8% 72.0% 69.3% 68.5% 66.7% 65.1% 65.1% 67.0% 64.3%
R&D 10.8% 12.9% 13.1% 12.5% 12.6% 12.0% 11.7% 11.7% 11.2% 12.5%
Adjusted operating income 32.2% 15.7% 7.6% 18.9% 15.3% 12.7% 23.2% 23.2% 13.3% 11.9%
D&A 2.4% 6.1% 7.4% 6.7% 6.2% 6.6% 5.5% 5.5% 6.6% 5.2%
Capex 7.9% 5.6% 5.8% 5.2% 4.4% 3.6% 4.1% 4.1% 3.4% 5.1%
Cash, investments 848 1,668 1,452 1,641 864 213 267 267 213 267
Total assets 8,196 30,882 31,197 27,139 25,177 22,128 21,290 21,290 22,128 21,290
Tangible assets 4,461 8,504 8,130 7,474 6,574 5,599 5,056 5,056 5,599 5,056
Debt 2,020 8,902 8,189 6,745 5,918 5,438 4,261 4,261 5,438 4,261
Tangible equity 547 -7,080 -7,970 -6,491 -6,302 -5,233 -4,881 -4,881 -5,233 -4,881
TBV / tangible assets 12% -83% -98% -87% -96% -93% -97% -97% -93% -97%
TBV per share 0.66 -5.56 -5.36 -4.33 -4.18 -3.45 -3.23 -3.33 -3.44 -3.33
EBIT/capital employed 66% -122% 0% -55% -38% -24% 32% 32% 55% 28%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Boston Scientific provides less-invasive medical devices
used in a broad range of interventional medical specialties. In
1969, a predecessor introduced steerable catheters used in
some of the first less-invasive procedures performed.

MARKET SHARE

1
Represents
revenue share in
medical device
markets served by
Boston Scientific
2
Excludes
Neurovascular
business
($340 million in
BSX revenue,
divested in 2011)

INVESTMENT HIGHLIGHTS
• Share leader in $30 billion market that includes
interventional cardiology, endoscopy, and cardiac
rhythm management (see above chart). BSX focuses
on medical devices that are least- or less-invasive,
reducing risk, trauma, and the need for aftercare.
The company has an opportunity to gain share in
Europe and Asia to bring it in line with the U.S.
• Major provider in cardiac rhythm management
market following Guidant acquisition in 2006.
The deal established BSX as one of the world’s
largest cardiovascular device companies and a
global leader in microelectronic therapies.
• Guiding for cumulative FCF of $7.5 billion over
the next five years. FCF should benefit from $650-
$750 million in targeted near-term cost reductions.
• Repurchased ~5% of stock in 2H11 under ~$1.3
billion plan. BSX has cut debt to the targeted level
of $4 billion and has gained investment grade status.

INVESTMENT RISKS & CONCERNS
• Pricing pressure due to competition, greater power
of consolidating clients, and the impact of managed
care and other payors. Pricing pressure has been
particularly acute in drug-eluting coronary stent
systems, which saw a 7% ASP decline in 2011.
• Operates in stagnant or slow-growing markets,
including $4+ billion drug-eluting stent and ~$7
billion implantable cardioverter defibrillator
segments growing in the low single digits, and the
stagnant $4+ billion pacemaker market.

POTENTIAL CATALYSTS
• Continued FCF of $1+ billion, plus stock buybacks
• Market share gains, especially in Europe and Asia
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 7% -4% 2% -5% -2%
∆ gross profit 7% -7% 1% -7% -5%
∆ assets 1% -13% -7% -12% -4%
∆ book value -1% -13% -7% -8% 1%
∆ BV per share -15% -13% -7% -9% 1%
Revenue ($mn) 8,357 8,050 8,188 7,806 7,622
% of revenue by geography:

U.S. 54% 56% 56% 54% 53%
EMEA 21% 23% 22% 23% 23%
Japan 10% 10% 12% 11% 11%
Inter-Continental 8% 8% 8% 9% 10%
Pretax margin by geography:

U.S. 27% 22% 23% 17% 16%
EMEA 52% 48% 45% 42% 41%
Japan 63% 60% 59% 46% 44%
Inter-Continental 41% 43% 44% 37% 37%
% of revenue by segment:

Interventional cardiology 36% 36% 35% 33% 33%
Peripheral interventions 8% 8% 8% 9% 10%
Cardiac rhythm management 25% 28% 29% 28% 27%
Endoscopy 10% 12% 12% 14% 16%
Urology/women’s health 5% 5% 6% 6% 7%
Neuromodulation 2% 3% 3% 4% 4%
Electrophysiology 2% 2% 2% 2% 2%
Selected items as % of revenue:

Gross profit 72% 69% 69% 67% 65%
R&D 13% 12% 13% 12% 12%
EBIT (adjusted)
1
8% 19% 15% 13% 23%
Pretax income (adjusted)
1
1% 12% 10% 8% 20%
Net income (adjusted)
1
2% 12% 14% 8% 17%
D&A 9% 11% 11% 11% 11%
Capex 5% 6% 5% 5% 4%
Industry gross margin
2
51% 53% 52% 51% 52%
Industry EBIT margin
2
-4% -5% -7% -7% -5%
Tangible assets ($mn) 8,130 7,474 6,574 5,599 5,056
Selected items as % of tangible assets:

Cash, investments 18% 22% 13% 4% 5%
Inventory 9% 11% 14% 16% 18%
PP&E, net 21% 23% 26% 30% 33%
ST debt 3% 0% 0% 9% 0%
LT debt 98% 90% 90% 88% 84%
Tangible equity -98% -87% -96% -93% -97%
Shares out (avg) (mn) 1,487 1,499 1,508 1,518 1,509
∆ shares out (avg) 17% 1% 1% 1% -1%
1
Adjusted for unusual items of -$647 million in 2007, -$3.0 billion in 2008, -$2.1
billion in 2009, -$1.7 billion in 2010, and -$862 million in 2011.

2
Medical Equipment & Supplies industry median.

MAJOR HOLDERS
Management 2% | Dodge & Cox 8% | Primecap 4% | Cap Re
4% | GS 3% | Franklin 3% | Wellington 3% | Oakmark 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
Boston Scientific has been in turnaround mode over the past two years, as slower-than-expected growth in cardiovascular
device end markets produced disappointing financial performance. While the stock price has stagnated, BSX has made
progress on cutting costs, improving the balance sheet, and reducing the share count. BSX should generate ~$1 per share of
annual FCF over the next few years, rendering the shares quite cheap, especially if management allocates capital prudently.



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BOSTON SCIENTIFIC – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011 and average
EBIT margin for past seven fiscal years

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013

Based on free cash flow for the twelve
months ended December 31, 2011





TTM net sales: $7.6 billion

Consensus FY13 EPS estimate: $0.48

Operating cash flow: $1.0 billion
multiplied by

minus

minus
Average 7-year EBIT margin: 17.9%

Assumed haircut to FY13 consensus

Capex: $320 million
equals

EPS estimate: 5% * $0.48

equals
Estimated EBIT: $1.4 billion

equals

Free cash flow: $690 million
multiplied by

Revised FY13 EPS estimate: $0.46

divided by
Assumed fair value multiple of EBIT:

multiplied by

Industry median FCF yield: 4.5% (*)
6x

Corresponding industry P/E: 16.2x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

Industry multiple-implied fair value:

$16 billion ($11 per share)
Boston Scientific: $8.2 billion

$11 billion ($7.40 per share)

multiplied by
plus

multiplied by

Assumed required FCF yield as a
Cash, ST investments: $267 million

Assumed BSX multiple as a

percentage of the industry FCF yield:
minus

percentage of the industry multiple:

90%
Total debt: $4.3 billion

105%

(4.0% required FCF yield)
equals

(17.0x fair value P/E multiple)

equals
Estimated fair value of the common

equals

Estimated fair value of the common
equity of Boston Scientific:

Estimated fair value of the common

equity of Boston Scientific:
$4.2 billion, or $2.90 per share

equity of Boston Scientific:

$17 billion, or $12 per share
(based on 1.5 billion shares out)

$11 billion ($7.80 per share)

(based on 1.5 billion shares out)
54% downside from the recent

(based on 1.5 billion shares out)

90% upside to the recent
stock price ($6.30 per share)

24% upside to the recent

stock price ($6.30 per share)

stock price ($6.30 per share)

(*) Represents Medical Equipment & Supplies industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


BOSTON SCIENTIFIC – MANAGEMENT’S CAPITAL ALLOCATION STRATEGY

Source: Company presentation dated January 2012.

Adjusted Free Cash Flow
excludes any potential
amounts related to
acquisition-, divestiture- and
litigation-related items,
significant tax audit
settlements and restructuring
and restructuring-related
items.

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BOSTON SCIENTIFIC – COST REDUCTION OPPORTUNITY

1
Substantially complete end of Q4 2011.
2
Expected implementation in 2013.
Source: Company presentation dated January 2012.


BOSTON SCIENTIFIC – COMPETITIVE MATRIX – MARKET SHARE POSITION IN SELECTED MARKETS

Source: Company presentation dated January 2012.
Cost cuts should help BSX generate
roughly $7.5 billion of cumulative
FCF over the next five years.

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Canadian Natural (CNQ) – BP Capital ¯, Pershing Square ^, Wintergreen ¯
Energy: Oil & Gas Operations

CALGARY AB, Canada, 403-517-6700 www.cnrl.com
Trading Data Consensus EPS Estimates Valuation
Price: $38.02 (as of 2/24/12) Month # of P/E FYE 12/31/10 25x
52-week range: $25.69–$52.04 Latest Ago Ests P/E FYE 12/31/11 17x
Market value: $41.8 billion This quarter $0.84 $0.85 7 P/E FYE 12/30/12 12x
Enterprise value: $51.2 billion Next quarter 0.68 0.83 4 P/E FYE 12/30/13 9x
Shares outstanding: 1,100.2 million FYE 12/31/11 2.27 2.26 9 EV/ LTM revenue 4.0x
Ownership Data FYE 12/30/12 3.25 3.47 10 EV/ LTM EBIT 17x
Insider ownership: <1% FYE 12/30/13 4.07 4.10 8 P / tangible book 1.9x
Insider buys (last six months): 0 LT growth n/a n/a n/a Greenblatt Criteria
Insider sales (last six months): 0 EPS Surprise Actual Estimate LTM EBIT yield 6%
Institutional ownership: 67% 11/3/11 $0.65 $0.57 LTM pre-tax ROC 7%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2004 2005 2006 2007 2008 2009 2010 9/30/11 9/30/10 9/30/11
Revenue 7,269 9,778 10,413 11,168 14,177 10,157 12,920 12,935 3,032 3,295
Gross profit 4,893 6,818 7,016 7,409 9,783 5,946 7,680 7,215 1,814 1,875
Adjusted operating income 1,998 1,692 3,403 2,536 7,103 1,872 2,865 2,647 804 974
Adjusted net income 1,418 1,037 2,599 2,345 -1,028 1,155 1,675 1,187 597 656
Adjusted diluted EPS 1.32 0.97 2.42 2.17 -0.95 1.07 1.54 1.09 0.55 0.60
Dividend 0.11 0.12 0.16 0.17 0.20 0.21 0.30 0.35 0.08 0.09
Shares out (avg) 1,072 1,073 1,075 1,079 1,081 1,084 1,088 1,090 1,089 1,097
Cash from operations 3,695 4,804 4,182 5,827 6,777 5,820 6,293 5,477 1,591 1,255
D&A 1,772 2,016 2,395 2,867 2,687 2,823 4,126 4,158 899 888
Capex 4,589 5,348 7,277 6,473 7,444 2,989 5,343 6,232 873 1,354
Free cash flow -893 -544 -3,095 -646 -667 2,831 950 -755 718 -99
… % of revenue:
Gross profit 67.3% 69.7% 67.4% 66.3% 69.0% 58.5% 59.4% 55.8% 59.8% 56.9%
Adjusted operating income 27.5% 17.3% 32.7% 22.7% 50.1% 18.4% 22.2% 20.5% 26.5% 29.6%
D&A 24.4% 20.6% 23.0% 25.7% 19.0% 27.8% 31.9% 32.1% 29.7% 27.0%
Capex 63.1% 54.7% 69.9% 58.0% 52.5% 29.4% 41.4% 48.2% 28.8% 41.1%
Cash, investments 28 18 23 21 27 13 22 18 27 18
PP&E, net 17,089 19,723 30,812 33,951 39,023 39,172 40,890 42,361 40,198 42,361
Tangible assets 18,399 21,884 33,208 36,166 42,712 41,084 43,016 45,541 42,066 45,541
Total current liabilities 1,855 3,831 3,076 3,568 3,425 2,409 3,711 3,023 3,357 3,023
Debt 3,737 3,326 11,059 10,956 13,035 9,672 8,497 9,341 8,493 9,341
Total liabilities 11,064 13,635 22,503 22,826 24,311 21,629 22,619 23,365 21,324 23,365
Tangible equity 7,335 8,249 10,706 13,340 18,401 19,454 20,398 22,176 20,742 22,176
TBV / tangible assets 40% 38% 32% 37% 43% 47% 47% 49% 49% 49%
TBV per share 6.84 7.69 9.96 12.37 17.02 17.95 18.75 20.22 19.05 20.22
EBIT/capital employed 12% 10% 14% 8% 20% 5% 7% 7% 8% 11%

Ten-Year Stock Price Performance and Trading Volume Dynamics



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BUSINESS OVERVIEW
Canadian Natural Resources is an oil and gas E&P company.

INVESTMENT HIGHLIGHTS
• Major oil sands player.
*
Synthetic crude and thermal
oil (bitumen) accounted for 43% and 19% of net
proved reserves of 3.7 billion barrel of oil equivalent
(BOE) at yearend 2010. Natural gas was 17%, with
the remaining 21% comprised of other oils/liquids.
• 90% of reserves are in politically stable North
America, mainly in Canada. This is likely to make
the company’s reserves an attractive alternative for
U.S. energy consumption needs in the future.
• Returns-focused management with a strong track
record of per share value creation. NAV per share
has compounded 15% per year on average since
yearend 2006. Insiders own 4% of shares, which are
worth $1.5+ billion at recent market prices.
• Generated ~$30 billion of net cash from operations
in the last five years (70%+ of recent market
value). While production and reserve expansion has
also led to high capex, reserve life is ~20 years on
2010 production and proved reserves only. ~70% of
proved reserves are developed and producing.
• Guiding for net cash from operations of $8.2-8.6
billion in 2012 based on average annual WTI strip
pricing of US$88/bbl and AECO strip pricing of
C$3.45/GJ. FCF is targeted at $1.1-1.5 billion and is
to be used for “opportunistic acquisitions, increased
dividends, and debt reduction.”

INVESTMENT RISKS & CONCERNS
• Recent enterprise value approximates the after-
tax PV-10 of proved and probable net reserves of
$54 billion as of yearend 2010 (based on 5.7 billion
BOE of reserves and forecast prices and costs).
• Highly sensitive to price of oil. Production costs in
Canada’s oil sands are generally higher than in other
oil regions, resulting in greater operating leverage
for oil sands producers. Should oil prices return to
past lows, the economic viability of oil sands might
be constrained (despite technological progress).
• Higher oil/gas prices may not translate into
higher profits over time. Production expenses per
barrel of oil equivalent increased at a 7% CAGR
from 2005 to 2010 and are up 7% y-y YTD. This, as
well as increasing royalties, will continue to
pressure netbacks even if sales prices increase.
• $9.3 billion of net debt (1.3x TTM EBITDA).
*
Oil sands are a natural mixture of sand, water, clay and bitumen. Bitumen
is oil that is too heavy or thick to flow or be pumped without being diluted
or heated. With conventional oil supply declining, the need for
unconventional resources, like oil sands, is likely to increase.
SELECTED OPERATING DATA
1

FYE December 31 2006 2007 2008 2009 2010
YTD
9/30/11
∆ proved net reserves 22% 1% 0% 81% 5% 22%
∆ gross production 5% 5% -7% 2% 10% -8%
∆ gross revenue 5% 8% 29% -32% 29% 2%
Period-end net reserves (BOE in billions):
Proved net reserves 1.9 2. 2.0 3.6 3.7 n/a
Probable net reserves 1.0 1.0 1.0 1.9 1.9 n/a
Gross production (MMBOE) 212 222 206 210 231 211
% of gross production by type:
Crude oil & NGLs 57% 54% 56% 62% 67% 64%
Natural gas 43% 46% 44% 38% 33% 36%
Netback -- barrels of oil equivalent ($/BOE):
Sales price
2
48 49 69 45 50 56
Royalties 6 6 10 5 7 7
Production expense 9 10 12 12 11 12
Netback 33 33 47 28 32 36
∆ netback -3% 0% 42% -40% 13% 13%
Gross revenue ($bn) 11.6 12.5 16.2 11.1 14.3 10.7
Selected items as % of gross revenue:
Royalties 11% 11% 12% 8% 10% 11%
Production 17% 17% 15% 27% 24% 25%
Transportation/blending 12% 13% 12% 11% 12% 16%
DD&A 21% 23% 17% 25% 28% 24%
Risk mgmt (gain)/loss 3% 12% -8% 7% -1% -1%
Forex (gain)/loss 1% -4% 4% -6% -1% 1%
Other 3% 4% 1% 6% 4% -3%
EBIT 33% 24% 46% 22% 23% 27%
Adj. net income
3
14% 19% 22% 24% 18% 15%
Net cash from operations 36% 46% 42% 52% 44% 37%
Net capex 62% 51% 46% 27% 37% 41%
FCF -26% -4% -4% 26% 7% -4%
Return on tang. equity
4
18% 20% 22% 14% 13% 7%
Tangible equity/assets 34% 35% 40% 45% 48% 50%
∆ shares out (avg) 0% 0% 0% 0% 0% 1%
1
Based on Canadian GAAP and Canadian dollars. “Gross/net” figures are
stated before/after royalties.
2
Stated net of transportation and blending costs and excluding risk
management activities.
3
Excludes stock-based compensation, unrealized risk management and
foreign exchange transactions, the effect of statutory tax rate and other
legislative changes on future income tax liabilities, as well as impairments.
4
Based on adjusted net income.

CATALYSTS
• Continued high oil price (viability of oil sands)
• Production and reserve growth
• Continued dividend increases and debt reduction

MAJOR HOLDERS
Insiders 4%
*
| BlackRock 5% | Wintergreen <1%
*
Excludes stock options (6% including stock options).

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
Canadian Natural has emerged as a major unconventional oil player through its exploitation of oil sands in the Athabasca
region of Canada. While continued high oil prices are necessary for oil sands producers to be economically viable, the
company benefits from long-life reserves in politically stable Canada, as well as a capable and incentivized management
team. Based on the “PV-10” value of proved and probable reserves, however, the recent valuation is not compelling.

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CANADIAN NATURAL RESOURCES – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
(C$ in billions) Conservative Base Case Aggressive
Valuation methodology PV-10 of 1P reserves 7x TTM EBITDA PV-10 of 2P reserves
Conservative case:
After-tax PV-10 of net proved reserves at yearend 2010
1
$38.9 billion
Fair value multiple 1.0x
Estimated enterprise value $38.9 billion
Base case:
TTM EBIT $3.0 billion
Add: DD&A $4.1 billion
TTM EBITDA $7.1 billion
Fair value multiple 7.0x
Estimated enterprise value $49.4 billion
Aggressive case:
After-tax PV-10 of net 2P reserves at yearend 2010
1
$54.3 billion
Fair value multiple 1.0x
Estimated enterprise value $54.3 billion
Minus: Net debt -$9.3 billion -$9.3 billion -$9.3 billion
Estimated fair value of the equity of Canadian Natural
2

$29.6 billion $40.1 billion $45.0 billion
$27 per share $37 per share $41 per share
Implied upside/(downside) to recent price ($38 per share) -29% -4% 8%
Implied valuation metrics based on trailing financials:
EV to EBITDA ($7.1 billion) 5.5x 7.0x 7.6x
Adjusted earnings yield ($2.3 billion)
3
8% 6% 5%
Net cash from operations yield ($5.5 billion) 18% 14% 12%
Other implied valuation metrics:
Price to tangible book ($22.1 billion) 1.3x 1.8x 2.0x
EV per BOE of 1P reserves ($/BOE) $10 $13 $14
EV per BOE of 2P reserves ($/BOE) $7 $9 $10
1
Based on forecast prices and costs; discounted at 10%; prior to the provision for interest, general and administrative expenses and the impact of any risk
management activities.
2
Based on 1,095 million shares outstanding.
3
Excludes stock-based compensation, unrealized risk management and foreign exchange transactions, the effect of statutory tax rate and other legislative
changes on future income tax liabilities, as well as impairments.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


CANADIAN NATURAL RESOURCES – MANAGEMENT’S PRODUCTION TARGETS THROUGH 2018


Source: Company presentation dated February 2012.

With management expecting that
natural gas prices “will be low for
5 to 10 years,” CNQ will focus
primarily on liquids productions.

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CANADIAN NATURAL RESOURCES – MANAGEMENT GUIDANCE


Source: Company presentation dated February 2012.
The capex budget will grow
nearly 20% in 2012.

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Corning (GLW) – Century ^^, Dodge & Cox ^^, Sequoia ^^
Technology: Electronic Instruments & Controls, Member of S&P 500 CORNING NY, 607-974-9000 www.corning.com
Trading Data Consensus EPS Estimates Valuation
Price: $13.75 (as of 2/24/12) Month # of P/E FYE 1/1/12 8x
52-week range: $11.51–$23.22 Latest Ago Ests P/E FYE 12/31/12 10x
Market value: $20.9 billion This quarter $0.29 $0.30 20 P/E FYE 12/31/13 9x
Enterprise value: $17.4 billion Next quarter 0.33 0.34 20 P/E FYE 12/31/14 9x
Shares outstanding: 1,518.3 million FYE 12/31/12 1.39 1.50 23 EV/ LTM revenue 2.2x
Ownership Data FYE 12/31/13 1.52 1.51 21 EV/ LTM EBIT 10x
Insider ownership: <1% FYE 12/31/14 1.52 1.41 7 P / tangible book 1.0x
Insider buys (last six months): 22 LT growth 2.8% 3.8% 4 Greenblatt Criteria
Insider sales (last six months): 9 EPS Surprise Actual Estimate LTM EBIT yield 10%
Institutional ownership: 76% 1/25/12 $0.33 $0.33 LTM pre-tax ROC 16%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 4,579 5,174 5,860 5,948 5,395 6,632 7,890 7,890 1,765 1,887
Gross profit 1,984 2,283 2,749 2,738 2,093 3,049 3,566 3,566 767 825
R&D 443 517 565 627 563 603 671 671 166 177
Adjusted operating income 772 898 1,262 1,199 639 1,423 1,847 1,847 315 361
Adjusted pretax income 755 1,024 2,467 2,561 2,184 3,497 3,366 3,366 854 690
Adjusted net income 781 1,918 2,346 4,936 2,258 3,210 2,958 2,958 709 629
Adjusted diluted EPS 0.53 1.24 1.50 3.16 1.46 2.06 1.89 1.90 0.45 0.41
Dividend 0.00 0.00 0.10 0.20 0.20 0.20 0.23 0.23 0.05 0.08
Shares out (avg) 1,464 1,550 1,566 1,560 1,550 1,558 1,562 1,558 1,560 1,546
… % of revenue:
Gross profit 43.3% 44.1% 46.9% 46.0% 38.8% 46.0% 45.2% 45.2% 43.5% 43.7%
R&D 9.7% 10.0% 9.6% 10.5% 10.4% 9.1% 8.5% 8.5% 9.4% 9.4%
Adjusted operating income 16.9% 17.4% 21.5% 20.2% 11.8% 21.5% 23.4% 23.4% 17.8% 19.1%
Cash, investments 2,434 3,167 3,516 2,816 3,583 6,350 5,825 5,825 6,350 5,825
LT investments 1,729 2,522 3,036 3,056 3,992 4,372 4,726 4,726 4,372 4,726
PP&E, net 4,675 5,193 5,986 8,199 7,995 8,943 10,671 10,671 8,943 10,671
Total assets 11,207 13,065 15,215 19,256 21,295 25,833 27,848 27,848 25,833 27,848
Tangible assets 10,869 12,749 14,907 18,951 20,619 25,117 26,922 26,922 25,117 26,922
Payables 690 631 609 846 550 798 977 977 798 977
Total current liabilities 2,370 2,319 2,512 2,052 1,539 1,986 2,097 2,097 1,986 2,097
Debt 1,807 1,716 1,537 1,605 2,004 2,319 2,391 2,391 2,319 2,391
Total liabilities 5,720 5,819 5,719 5,813 5,752 6,458 6,770 6,770 6,458 6,770
Tangible equity 5,149 6,930 9,188 13,138 14,867 18,659 20,152 20,152 18,659 20,152
TBV / tangible assets 47% 54% 62% 69% 72% 74% 75% 75% 74% 75%
TBV per share 3.52 4.47 5.86 8.42 9.59 11.98 12.90 13.03 11.96 13.03
EBIT/capital employed 15% 20% 22% 23% 5% 20% 16% 16% 30% 8%

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BUSINESS OVERVIEW
Corning dates back to 1851 and provides specialty glass.

INVESTMENT HIGHLIGHTS
• Display (40% of sales): Corning and 50%-owned
Samsung Corning Precision are the top producers of
glass substrates for active matrix LCD displays used
in notebooks, flat panel monitors, and LCD TVs,
ahead of Asahi Glass, Nippon Electric Glass, and
Avan Strate. Corning is differentiated through
products such as Corning Lotus glass, and a
proprietary fusion manufacturing process, which
allows for glass that is larger, thinner and lighter.
• Telecommunications (26%): Corning is a leader in
optical fiber/cable, along with Furukawa Electric,
Fujikura, Sumitomo Electric, and Prysmian.
Corning is a low-cost producer due to scale, fiber
process, technology leadership, and IP assets.
• Environmental technologies (13%): Corning is a
leader in automotive ceramic substrate products.
Competitors include NGK, Denso, and Ibiden.
• 4,750 patents, including 2,500 in the U.S. While
8% will expire by 2014, Corning has 7,400+ patent
applications in process, including 1,700 in the U.S.
• Longtime management, with chairman and CEO
Wendell Weeks (52) and CFO Jim Flaws (63)
having joined Corning in ‘83 and ‘73, respectively.
• Expects “moderate” growth in 2012, led by
telecom and environmental tech segments. Global
demand for LCD glass should increase from 3.2
billion square feet to 3.6 billion square feet in 2012.

INVESTMENT RISKS & CONCERNS
• Pricing pressure in display segment. Corning has
recently experienced double-digit price declines in
display, with management “hopeful that sequential
quarterly price declines in 2012 will be moderate.”
In response, Corning is reducing capacity by ~25%.
• 50%-owned Dow Corning hurt by “major
upheaval” in solar panel industry. Management
expects lower equity earnings from Dow Corning,
driven by lower demand and price declines in
silicon products and at Hemlock Semiconductor,
which makes high purity polycrystalline silicon.
• Capital-intensive business, with 2012E capex of
$1.8 billion, $800 million of which in display unit.
• Customer concentration, with Corning’s ten
largest customers accounting for 51% of revenue.

MAJOR HOLDERS
Management <1% | Cap Re 4% | Cap World 3% | T Rowe
3% | Primecap 2% | AllianceBernstein 2%
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ employees 1% 9% -13% 11% 10%
∆ revenue 13% 2% -9% 23% 19%
∆ gross profit 20% 0% -24% 46% 17%
∆ assets 16% 27% 11% 21% 8%
∆ book value 31% 42% 16% 25% 9%
∆ BV per share 30% 42% 16% 24% 8%
Employees (‘000) (end) 24.8 27.0 23.5 26.2 28.8
Revenue ($mn) 5,860 5,948 5,395 6,632 7,890
Revenue / empl. ($’000) 238 230 214 267 287
% of revenue by major segment:

Display technologies 45% 46% 45% 45% 40%
Telecommunications 30% 30% 31% 26% 26%
Environmental techs 13% 12% 11% 12% 13%
Specialty materials 6% 6% 6% 9% 14%
Life sciences 5% 5% 7% 8% 8%
Revenue growth by major segment:

Display technologies 23% 4% -11% 24% 4%
Telecommunications 3% 1% -7% 2% 21%
Environmental techs 23% -6% -17% 38% 22%
Specialty materials -2% -2% -11% 75% 86%
Life sciences 6% 7% 12% 39% 17%
% of revenue by major geography:

North America 31% 29% 27% 27% 24%
Asia Pacific 54% 55% 59% 59% 62%
Europe 13% 14% 11% 10% 10%
Selected items as % of revenue:

Gross profit 47% 46% 39% 46% 45%
R&D 10% 11% 10% 9% 9%
EBIT 18% 26% 7% 27% 21%
Pretax income 39% 48% 36% 58% 41%
Net income 37% 88% 37% 54% 36%
D&A 10% 12% 15% 13% 12%
Capex 22% 32% 16% 15% 31%
Tangible assets ($bn) 14.9 19.0 20.6 25.1 26.9
Selected items as % of tangible assets:

Cash, investments 24% 15% 17% 25% 22%
LT investments 20% 16% 19% 17% 18%
PP&E, net 40% 43% 39% 36% 40%
Payables 4% 4% 3% 3% 4%
Debt 10% 8% 9% 9% 9%
Tangible equity 62% 69% 72% 74% 75%
Return on tang. equity 29% 44% 16% 19% 15%
Trailing P/E (end) 18x 3x 15x 9x 7x
Forward P/E (end) 7x 7x 9x 11x 9x
Diluted EPS (cont.) ($) 1.34 3.32 1.28 2.25 1.77
Dividends per share ($) 0.10 0.20 0.20 0.20 0.23
BV per share (end) ($) 6 9 10 12 13
Share price (end) ($) 24 10 19 19 13
Volume (mn shares) 3,758 4,382 3,997 3,849 4,465
Shares out (avg) (mn) 1,566 1,560 1,550 1,558 1,562
∆ shares out (avg) 1% 0% -1% 1% 0%

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
Corning, which makes specialty glass for LCD displays and other products, has been hurt by steeper-than-expected price
declines in the display and solar panel markets. Display accounts for 40% of revenue, while the 50%-owned equity affiliate
Dow Corning sells into the solar panel market. According to management, “price declines will reset the profitability of both
Display Technologies and Dow Corning to lower levels.” Still, analysts expect Corning to earn $1.39 and $1.52 per share in
2012 and 2013, respectively, rendering the shares quite attractive, especially in light of Corning’s very strong balance sheet.



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CORNING – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on free cash flow for the twelve
months ended December 31, 2011

Based on tangible book value as of
December 31, 2011

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013





Operating cash flow: $3.2 billion

Book value: $21 billion

Consensus FY13 EPS estimate: $1.52
minus

minus

minus
Capex: $2.4 billion

Intangibles: $930 million

Assumed haircut to FY13 consensus
equals

equals

EPS estimate: 5% * $1.52
Free cash flow: $760 million

Tangible book value: $20 billion

equals
divided by

multiplied by

Revised FY13 EPS estimate: $1.44
Industry median FCF yield: 5.6% (*)

Industry price to book: 1.4x (*) (†)

multiplied by
equals

equals

Corresponding industry P/E: 12.4x (*)
Industry FCF yield-implied fair value:

Industry multiple-implied fair value:

equals
$14 billion ($9.00 per share)

$29 billion ($19 per share)

Industry multiple-implied fair value:
multiplied by

multiplied by

$27 billion ($18 per share)
Assumed required FCF yield as a

Assumed GLW multiple as a

multiplied by
percentage of the industry FCF yield:

percentage of the industry multiple:

Assumed GLW multiple as a
125%

105%

percentage of the industry multiple:
(6.9% required FCF yield)

(1.5x multiple of tangible book)

125%
equals

equals

(15.5x fair value P/E multiple)
Estimated fair value of the common

Estimated fair value of the common

equals
equity of Corning:

equity of Corning:

Estimated fair value of the common
$11 billion, or $7.20 per share

$30 billion ($20 per share)

equity of Corning:
(based on 1.5 billion shares out)

(based on 1.5 billion shares out)

$34 billion ($22 per share)
48% downside from the recent

45% upside to the recent

(based on 1.5 billion shares out)
stock price ($14 per share)

stock price ($14 per share)

63% upside to the recent

stock price ($14 per share)
(*) Represents Electronic Instruments & Controls industry median multiple.
(†) In order to be conservative, we apply the industry median multiple of book value to the company’s tangible book value.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


CORNING – FREE CASH FLOW, 2004-2011 ($ in millions)

Source: Company presentation dated February 2012.

Free cash flow has trended higher unevenly
over the past several years.

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CORNING – USE OF CUMULATIVE CASH FLOW, 2007-2011

Source: Company presentation dated February 2012.


CORNING – MANAGEMENT’S OUTLOOK FOR CAPITAL SPENDING ($ in millions)

Source: Company presentation dated February 2012.


CORNING – MANAGEMENT’S DIRECTIONAL OUTLOOK FOR GROSS MARGIN, 2012-2014

Source: Company presentation dated February 2012.
While the business has required significant
capital investments, management has also
allocated cash to repurchases and dividends.
Capital investment is expected to decrease
going forward, freeing up cash that could be
used for additional buybacks and dividends.
Management expects gross margin to remain
stable or increase going forward.

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Covidien (COV) – FPA Crescent ^, Heartland ^
Health Care: Medical Equipment & Supplies, Member of S&P 500 Dublin, Ireland, 353-1-438-1700 www.covidien.com
Trading Data Consensus EPS Estimates Valuation
Price: $52.88 (as of 2/24/12) Month # of P/E FYE 10/1/11 14x
52-week range: $41.35–$57.65 Latest Ago Ests P/E FYE 9/30/12 12x
Market value: $25.6 billion This quarter $1.03 $1.03 19 P/E FYE 9/30/13 11x
Enterprise value: $28.2 billion Next quarter 1.06 1.09 19 P/E FYE 9/30/14 11x
Shares outstanding: 483.3 million FYE 9/30/12 4.28 4.27 22 EV/ LTM revenue 2.4x
Ownership Data FYE 9/30/13 4.60 4.61 21 EV/ LTM EBIT 11x
Insider ownership: <1% FYE 9/30/14 5.00 5.02 12 P / tangible book n/m
Insider buys (last six months): 24 LT growth 9.7% 10.2% 10 Greenblatt Criteria
Insider sales (last six months): 13 EPS Surprise Actual Estimate LTM EBIT yield 9%
Institutional ownership: 90% 1/26/12 $1.13 $1.03 LTM pre-tax ROC 52%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended September 30, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/30/11 12/24/10 12/30/11
Revenue 9,535 8,313 9,317 9,910 10,263 10,429 11,574 11,703 2,769 2,898
Gross profit 4,700 4,301 4,724 5,309 5,641 5,805 6,578 6,708 1,571 1,701
Adjusted operating income 2,138 2,115 1,969 2,087 2,172 2,139 2,486 2,545 591 650
Adjusted net income 1,193 1,493 1,197 1,584 1,301 1,639 1,994 2,028 474 508
Adjusted diluted EPS 2.40 3.00 2.41 3.17 2.59 3.28 4.04 4.13 0.96 1.05
Dividend 0.00 0.00 0.16 0.64 0.66 0.74 0.83 0.86 0.20 0.23
Shares out (avg) 497 497 497 500 503 500 493 491 495 483
Cash from operations 2,384 1,195 2,209 660 1,873 2,231 2,182 2,240 209 267
Capex 331 400 374 410 440 471 473 517 87 131
Free cash flow 2,053 795 1,835 250 1,433 1,760 1,709 1,723 122 136
… % of revenue:
Gross profit 49.3% 51.7% 50.7% 53.6% 55.0% 55.7% 56.8% 57.3% 56.7% 58.7%
R&D 2.4% 3.0% 2.9% 3.4% 4.2% 4.3% 4.8% 4.9% 4.3% 5.0%
Adjusted operating income 22.4% 25.4% 21.1% 21.1% 21.2% 20.5% 21.5% 21.7% 21.3% 22.4%
Cash, investments 141 242 872 1,208 1,467 1,565 1,503 1,767 1,150 1,767
Receivables 1,499 1,633 3,331 1,879 1,669 1,953 1,748 1,788 1,931 1,788
Inventory 1,066 1,255 1,126 1,347 1,272 1,381 1,513 1,552 1,410 1,552
LT investments 0 0 328 711 708 479 583 583 531 583
PP&E, net 2,368 2,558 2,393 2,584 2,542 2,608 2,705 2,734 2,611 2,734
Tangible assets 7,655 6,616 11,319 8,884 9,606 9,763 9,927 10,211 9,415 10,211
Short-term debt 463 194 523 19 30 255 11 510 4 510
Long-term debt 2,544 2,248 3,565 2,986 2,961 4,451 4,197 3,925 4,356 3,925
Tangible equity 878 1,129 -267 628 468 -1,650 -630 -133 -1,244 -133
TBV / tangible assets 11% 17% -2% 7% 5% -17% -6% -1% -13% -1%
TBV per share 1.77 2.27 -0.54 1.26 0.93 -3.30 -1.28 -0.28 -2.51 -0.28
EBIT/capital employed 46% 45% 14% 42% 41% 49% 56% 52% 60% 60%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Covidien is an Ireland-based healthcare firm with 41,000
employees. It was spun off from Tyco International in 2007.
Medical Devices (68% of revenue) provides endomechanical
instruments, energy devices, soft tissue repair products,
vascular products, oximetry and monitoring products, airway
and ventilation products and other medical products.
Pharmaceuticals (17%): specialty pharma, active ingredients
Medical Supplies (15%): nursing care, surgical products

INVESTMENT HIGHLIGHTS
• Medical device segment performing well, with
better-than-expected recent sales fueled by double-
digit gains in energy devices and vascular products.
Covidien sells primarily to hospitals, surgi-centers,
alternate site facilities, and drug manufacturers.
• Emerging markets business growing in “double
digits” off relatively low base (~$1 billion). The
company will hire ~200 sales reps in Asia in 2012.
• Experienced team. Jose Almeida (49) has been
with Covidien since 1998, becoming CEO in July
2011. CFO Charles Dockendorff (57) joined in ‘95.
• Management “comfortable” with consensus EPS
estimate of $4.28 for FY12 (+8% y-y), while
guiding for revenue growth of 1-3% in FY12 (down
from prior guidance of 3-5% due to a stronger
dollar). EBIT margin is projected at 22-23%, with
free cash flow of “$1.9 billion or higher” in FY12.
Analysts expect EPS to grow 7% to $4.60 in FY13.
• Aims to return 25-40% of free cash flow, after
returning $1.35 billion or 80% of FCF in FY11.

INVESTMENT RISKS & CONCERNS
• Long-term double-digit EPS growth target may
prove unrealistic in light of an associated target for
mid single-digit sales growth. Covidien’s operating
margin has barely expanded over the past five years,
and it’s not clear why it should expand in the future.
• Does not appear to have pricing power, as price
was a slight negative drag on growth in 2007-’11.
Large competitors include JNJ, BDX, and BCR.
• M&A “an important part” of growth strategy,
raising the risk of misallocation of resources.

POTENTIAL CATALYSTS
• Better-than-expected revenue and earnings growth
in FY12 (guidance appears conservative)
• Pharmaceuticals segment spin off by mid-2013
(pharma sales have stagnated in recent years)

MAJOR HOLDERS
Management 1% | FMR 5% | JPM 4% | T Rowe 3%
SELECTED OPERATING DATA
FYE September 30 2007 2008 2009 2010 2011 1Q12
∆ revenue 12% 6% 4% 2% 11% 5%
∆ gross profit 10% 12% 6% 3% 13% 8%
∆ assets 30% -13% 7% 19% 0% 3%
∆ book value -22% 15% 3% 12% 9% 10%
∆ BV per share -22% 14% 3% 13% 11% 13%
Revenue ($bn) 9.3 9.9 10.3 10.4 11.6 2.9
% of revenue by segment:

Medical devices 56% 60% 59% 65% 67% 68%
Pharmaceuticals 26% 27% 20% 19% 17% 17%
Medical supplies 18% 18% 17% 17% 15% 15%
Operating margin by segment:

Medical devices 32% 30% 31% 31% 31% 33%
Pharmaceuticals 18% 18% 16% 17% 16% 17%
Medical supplies 12% 11% 13% 15% 14% 13%
% of revenue by geography:

U.S. 58% 58% 58% 55% 55% 55%
Other Americas 5% 6% 5% 6% 6% 6%
Europe 26% 29% 24% 25% 24% 23%
Asia Pacific 11% 12% 12% 14% 15% 16%
% of medical device revenue by product:

Endomechanical 33% 33% 33% 32% 30% 29%
Energy devices 12% 14% 14% 15% 15% 16%
Soft tissue repair 12% 13% 13% 13% 11% 11%
Vascular products 9% 8% 9% 12% 18% 20%
Oximetry & monitoring 11% 11% 10% 11% 11% 10%
Airway & ventilation 15% 14% 13% 11% 10% 9%
Selected items as % of revenue:

Gross profit 51% 54% 55% 56% 57% 59%
R&D 3% 3% 4% 4% 5% 5%
EBIT (adjusted)
1
21% 21% 21% 21% 21% 22%
Net income (adjusted)
1,2
13% 16% 13% 16% 17% 18%
D&A 4% 4% 4% 5% 5% 5%
Capex 4% 4% 4% 5% 4% 5%
Tangible assets ($bn) 11.3 8.9 9.6 9.8 9.9 10.2
Selected items as % of tangible assets:

Cash, investments 8% 14% 15% 16% 15% 17%
Inventory 10% 15% 13% 14% 15% 15%
LT investments 3% 8% 7% 5% 6% 6%
PP&E, net 21% 29% 26% 27% 27% 27%
ST debt 5% 0% 0% 3% 0% 5%
LT debt 31% 34% 31% 46% 42% 38%
Tangible equity -2% 7% 5% -17% -6% -1%
Trailing P/E (end) n/m 13x 26x 15x 12x 44x
Forward P/E (end) 15x 19x 15x 12x 11x 10x
Dividends per share ($) 0.16 0.64 0.66 0.74 0.83 0.23
Shares out (avg) (mn) 497 500 503 500 493 483
∆ shares out (avg) 0% 1% 1% -1% -1% -2%
1
Adjusted for unusual items of -$1.3 billion in 2007, -$141 million in ‘08, -$359
million in ‘09, -$76 million in ‘10, -$111 million in ‘11, -$14 million in 1Q12.
2
Adjusted for nonrecurring items of -$208 million in 2007, -$82 million in ‘08,
-$35 million in ‘09, and $69 million in ‘10, and -$15 million in ‘11.
3
Medical Equipment & Supplies industry median.

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
Covidien holds the former healthcare businesses of Tyco. Sales and profits have grown since the 2007 spin-off, but the shares
have mostly stagnated, producing an improved but still not compelling valuation. The company has strong franchises in
certain medical device segments, including endomechanical instruments and energy devices. While management has
executed reasonably well, we are wary of the stated long-term goal of double-digit EPS growth, as it appears aggressive.



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COVIDIEN – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 30, 2011, and
assumed normalized EBIT margin

Based on median consensus EPS
estimate for the fiscal year ending
September 29, 2013

Based on free cash flow for the twelve
months ended December 30, 2011





TTM net revenue: $12 billion

Consensus FY13 EPS estimate: $4.60

Operating cash flow: $2.2 billion
multiplied by

minus

minus
Assumed operating margin: 21.0%

Assumed haircut to FY13 consensus

Capex: $520 million
equals

EPS estimate: 5% * $4.60

equals
Est. operating income: $2.5 billion

equals

Free cash flow: $1.7 billion
multiplied by

Revised FY13 EPS estimate: $4.37

divided by
Assumed fair value multiple:

multiplied by

Industry median FCF yield: 4.5% (*)
6.0x

Corresponding industry P/E: 16.2x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

Industry multiple-implied fair value:

$39 billion ($80 per share)
Covidien: $15 billion

$34 billion ($71 per share)

multiplied by
plus

multiplied by

Assumed required FCF yield as a
Cash, ST investments: $1.8 billion

Assumed COV multiple as a

percentage of the industry FCF yield:
plus

percentage of the industry multiple:

80%
Long-term investments at fair value

105%

(3.6% required FCF yield)
discount of 50%: $292 million

(17.0x fair value P/E multiple)

equals
minus

equals

Estimated fair value of the common
Total debt: $4.4 billion

Estimated fair value of the common

equity of Covidien:
equals

equity of Covidien:

$48 billion, or $100 per share
Estimated fair value of the common

$36 billion ($74 per share)

(based on 480 million shares out)
equity of Covidien:

(based on 480 million shares out)

89% upside to the recent
$12 billion, or $26 per share

41% upside to the recent

stock price ($53 per share)
(based on 480 million shares out)

stock price ($53 per share)

52% downside from the recent

(*) Represents Medical Equipment & Supplies industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.
stock price ($53 per share)



COVIDIEN – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance
(Click to visit ∆ to Reach Tang. EPS Yield LTM Rev./ ∆ Rev. % TTM Rev.
relevant websites) 7-Year
MV EV
Book/
This Next Rev./ Empl. Last Gross Adj.
Low High ($mn) ($mn) MV TTM FY FY EV ($000) TTM Q Profit R&D EBIT
Becton Dickinson / BDX -36% 21% 16,237 17,719 16% 7% 7% 8% 44% 268 7% 2% 52% 6% 22%
C.R. Bard / BCR -36% 21% 7,907 8,049 9% 4% 7% 7% 36% 248 6% 5% 62% 6% 29%
Johnson & Johnson / JNJ -28% 13% 176,948 164,378 15% 5% 8% 8% 40% 556 6% 4% 69% 12% 21%
Covidien / COV -48% 9% 25,559 28,227 n/m 7% 8% 9% 41% 283 11% 5% 57% 5% 22%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


COVIDIEN – CALCULATION OF FREE CASH FLOW, FY2007-FY2011

Source: Company presentation dated January 2012.

Adjusted free cash flow has
remained remarkably stable
throughout recent economic
troubles.

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COVIDIEN – CASH RETURNED TO SHAREHOLDERS (dividends and gross repurchases), FY2008-FY2011 ($ in millions)

Source: Company presentation dated January 2012.


COVIDIEN – COMPONENTS OF SALES GROWTH, FY2007-FY2011 ($ in millions)

Source: Company presentation dated January 2012.


COVIDIEN – NEW PRODUCT ROADMAP, FY2012-FY2014

Source: Company presentation dated January 2012.
Pricing has not contributed to
sales growth in recent years
Management aims to return 25%-40%
of FCF to shareholders
100+ new products planned for
launch over three years

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CVR Energy (CVI) – Appaloosa -, Icahn ^^
Energy: Oil & Gas Operations

SUGAR LAND TX, 281-207-3200 www.cvrenergy.com
Trading Data Consensus EPS Estimates Valuation
Price: $29.76 (as of 2/24/12) Month # of P/E FYE 12/31/10 n/m
52-week range: $16.62–$30.11 Latest Ago Ests P/E FYE 12/31/11 8x
Market value: $2.6 billion This quarter $0.38 $0.31 4 P/E FYE 12/30/12 7x
Enterprise value: $2.3 billion Next quarter 0.95 0.86 4 P/E FYE 12/30/13 8x
Shares outstanding: 86.6 million FYE 12/31/11 3.94 3.87 4 EV/ LTM revenue 0.4x
Ownership Data FYE 12/30/12 4.11 3.28 4 EV/ LTM EBIT 4x
Insider ownership: 2% FYE 12/30/13 3.82 2.68 3 P / tangible book 2.5x
Insider buys (last six months): 17 LT growth n/a n/a n/a Greenblatt Criteria
Insider sales (last six months): 12 EPS Surprise Actual Estimate LTM EBIT yield 25%
Institutional ownership: 100% 11/2/11 $1.57 $1.67 LTM pre-tax ROC 46%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2004 2005 2006 2007 2008 2009 2010 9/30/11 9/30/10 9/30/11
Revenue 1,741 2,435 3,038 2,967 5,016 3,136 4,080 5,115 1,031 1,352
Gross profit 135 333 395 382 317 363 271 772 89 251
Adjusted operating income 111 271 282 228 199 209 92 577 51 212
Adjusted pretax income 102 -86 335 -114 288 101 44 490 36 189
Adjusted net income 68 -59 215 -25 225 72 30 334 23 109
Adjusted diluted EPS 0.83 -0.72 2.50 -0.29 2.61 0.84 0.35 3.86 0.27 1.26
Dividend 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Shares out (avg) 82 82 86 86 86 86 86 86 86 87
Cash from operations 143 95 187 146 83 85 225 420 105 183
D&A 3 25 51 61 82 85 87 110 22 22
Capex 14 57 240 269 87 49 32 56 6 26
Free cash flow 129 38 -54 -123 -3 37 193 364 99 158
… % of revenue:
Gross profit 7.8% 13.7% 13.0% 12.9% 6.3% 11.6% 6.6% 15.1% 8.6% 18.6%
Adjusted operating income 6.4% 11.1% 9.3% 7.7% 4.0% 6.7% 2.3% 11.3% 4.9% 15.7%
D&A 0.2% 1.0% 1.7% 2.0% 1.6% 2.7% 2.1% 2.2% 2.1% 1.6%
Capex 0.8% 2.4% 7.9% 9.1% 1.7% 1.6% 0.8% 1.1% 0.6% 1.9%
Cash, investments 65 42 31 9 37 200 899 162 899
PP&E, net 773 1,007 1,192 1,179 1,138 1,081 1,080 1,093 1,080
Tangible assets 1,137 1,365 1,784 1,569 1,573 1,699 2,467 1,643 2,467
Total current liabilities 228 230 560 245 191 266 304 220 304
Debt 499 775 501 496 491 477 592 506 592
Tangible equity 35 -1 349 538 613 648 1,042 630 1,042
TBV / tangible assets 3% 0% 20% 34% 39% 38% 42% 38% 42%
TBV per share 0.42 -0.01 4.04 6.25 7.10 7.51 12.04 7.29 12.04
EBIT/capital employed 32% 27% 16% 11% 15% 6% 46% 17% 88%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
CVR is an independent petroleum refiner and marketer of
high value transportation fuels in the mid-continental U.S.
The company also owns the GP and ~70% of the common
units of CVR Partners, LP (NYSE: UAN), a partnership that
acts as an independent producer and marketer of upgraded
nitrogen fertilizer products in North America. In April 2011,
the partnership completed an IPO, raising $353 million.

INVESTMENT HIGHLIGHTS
• Carl Icahn commenced a hostile tender offer for
the company at $30 per share on February 23.
Whether Icahn’s ultimate goal is to acquire CVR or
drive it into the hands of a strategic buyer is unclear,
though the latter appears to be more likely. Icahn
also intends to nominate nine directors to the Board.
CVR has yet to make a recommendation on the
offer to shareholders on the Icahn offer. CVR’s
stock price has appreciated to nearly $30 per share,
perhaps suggesting an expectation that the company
will indeed be sold or broken into separate firms.
• CVR initiated an $0.08 per share quarterly
dividend and stated an intention to sell a portion of
its investment in CVR Partners, likely in an attempt
to provide an alternative way to return some value
to shareholders. Management does not view a
separation of the refining and fertilizer businesses as
a move that would enhance value for shareholders.
• Petroleum business includes 115,000 bpd
complex full coking medium-sour crude refinery
in Coffeyville, Kansas. CVR also owns (1) a 35,000
bpd crude oil gathering system, (2) a rack marketing
division, and (3) a 145,000 bpd pipeline system that
transports crude to the refinery, with 1.2 million
barrels of associated company-owned storage tanks.
• Nitrogen fertilizer business consists of a fertilizer
manufacturing facility that is the only operation in
North America that utilizes a petroleum coke, or pet
coke, gasification process to produce nitrogen
fertilizer. The facility includes a 1,225 ton-per-day
ammonia unit and 2,025 ton-per-day UAN unit.

INVESTMENT RISKS & CONCERNS
• If Icahn bid unravels, CVR shares could fall
materially as they traded below $20 in December.
• Operates in cyclical, capital-intensive businesses.

POTENTIAL CATALYSTS
• $30 Icahn bid draws in additional bidders for CVR
SELECTED OPERATING DATA
FYE December 31 2006 2007 2008 2009 2010
YTD
9/30/11
∆ revenue 25% -2% 69% -37% 30% 75%
∆ gross profit 19% -3% -17% 14% -25% 386%
∆ assets 19% 29% -14% 0% 8% 49%
∆ book value -30% 419% 34% 13% 5% 61%
∆ BV per share -34% 418% 34% 13% 5% 61%
Revenue ($mn) 3,038 2,967 5,016 3,136 4,080 5,134
% of revenue by segment:

Petroleum refining 95% 94% 95% 93% 96% 95%
Nitrogen fertilizer 5% 6% 5% 7% 4% 5%
Operating income by segment ($mn):

Petroleum refining 246 145 32 170 105 469
Nitrogen fertilizer 37 47 117 49 20 94
Operating margin by segment:

Petroleum refining 9% 5% 1% 6% 3% 12%
Nitrogen fertilizer 23% 28% 44% 23% 11% 43%
Selected items as % of revenue:

Gross profit 13% 13% 6% 12% 7% 16%
EBIT (adjusted)
1
9% 8% 4% 7% 2% 13%
Pretax income (adjusted)
1
11% -4% 6% 3% 1% 11%
Net income (adjusted)
1
7% -1% 4% 2% 1% 6%
D&A 2% 2% 2% 3% 2% 1%
Capex 8% 9% 2% 2% 1% 1%
Tangible assets ($mn) 1,365 1,784 1,569 1,573 1,699 2,467
Selected items as % of tangible assets:

Cash, investments 3% 2% 1% 2% 12% 36%
Receivables 7% 11% 8% 4% 5% 4%
Inventory 12% 14% 9% 17% 15% 13%
PP&E, net 74% 67% 75% 72% 64% 44%
Payables 10% 10% 7% 7% 9% 8%
ST debt 0% 1% 1% 1% 0% 0%
LT debt 56% 27% 31% 30% 28% 24%
Other LT liabilities 27% 22% 20% 19% 19% 21%
Tangible equity 0% 20% 34% 39% 38% 42%
Diluted EPS (cont.) ($) 2.22 -0.78 1.90 0.80 0.16 3.71
Dividends per share ($) – – – – – –
BV per share (end) ($) 1 5 7 8 8 13
Share price (end) ($) 25 4 7 15 19 21
Volume (mn shares) 26 138 88 110 633 450
Shares out (avg) (mn) 86 86 86 86 86 86
∆ shares out (avg) 6% 0% 0% 0% 0% 0%
1
Adjusted for unusual items of -$23 million in 2006, -$43 million in 2007, -$61
million in 2008, -$2.7 million in 2009, -$16 million in 2010, -$4.1 million YTD’11.

MAJOR HOLDERS
CEO <1% | Other insiders 10% | Appaloosa 6% | DFA 4% |
Icahn 14% | Steadfast 4% | Corvex 3% | Gilder Gagnon 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
Carl Icahn has put refiner CVR Energy in play, making this a special situation that is difficult to assess on investment merit
alone. Icahn has stated the value of CVR is at least $37 per share, and Icahn unsolicited tender offer appears structured in a
way that essentially invites a strategic buyer to acquire CVR for $37 per share. Potential buyers include larger competitors
Valero (VLO) and Tesoro (TSO). We find it difficult to assess the probabilities associated with various potential outcomes of
this fluid situation and therefore find ourselves on the sidelines. We would reevaluate CVR in case Icahn’s bid failed and the
company’s shares declined materially in price, an unlikely scenario given Icahn’s formal tender offer.



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CVR ENERGY – PRO FORMA SNAPSHOT

Source: Company presentation dated February 8, 2012.



CVR ENERGY – PRO FORMA ORGANIZATIONAL STRUCTURE


Source: Company presentation dated February 8, 2012.

Carl Icahn’s unsolicited bid for
CVR Energy could lead to a
separate strategic transaction
that highlights the value of the
refining and fertilizer
businesses.

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CVR ENERGY – CALCULATION OF ADJUSTED EBITDA, BY SEGMENT, 2008-2011 ($ in millions)


Source: Company presentation dated February 8, 2012.


CVR ENERGY – COMBINED COMPANY OPERATING EXPENSE DATA

Source: Company presentation dated February 8, 2012.
CVR Energy has lower operating costs
than most competitors, including Tesoro
and Western Refining.

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Dell (DELL) – Ancient Art ^^, Fairfax -, Greenlight ^^, IVA -, Weitz -
Technology: Computer Hardware, Member of S&P 500 ROUND ROCK TX, 800-289-3355 www.dell.com
Trading Data Consensus EPS Estimates Valuation
Price: $17.43 (as of 2/24/12) Month # of P/E FYE 2/1/12 9x
52-week range: $13.29–$18.36 Latest Ago Ests P/E FYE 1/31/13 8x
Market value: $31.3 billion This quarter $0.47 $0.46 29 P/E FYE 1/31/14 8x
Enterprise value: $25.7 billion Next quarter 0.51 0.49 28 P/E FYE 1/31/15 8x
Shares outstanding: 1,796.5 million FYE 1/31/13 2.11 2.01 35 EV/ LTM revenue 0.4x
Ownership Data FYE 1/31/14 2.18 2.01 26 EV/ LTM EBIT 6x
Insider ownership: <1% FYE 1/31/15 2.18 n/a 7 P / tangible book 25.6x
Insider buys (last six months): 12 LT growth 6.2% 5.1% 6 Greenblatt Criteria
Insider sales (last six months): 6 EPS Surprise Actual Estimate LTM EBIT yield 17%
Institutional ownership: 71% 2/21/12 $0.51 $0.52 LTM pre-tax ROC n/m

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended February 3, LTME FQE FQE
per share data) 2006 2007 2008 2009 2010 2011 2012 2/3/12 1/28/11 2/3/12
Revenue 55,788 57,420 61,133 61,101 52,902 61,494 62,071 62,071 15,692 16,031
Gross profit 9,891 9,516 11,671 10,957 9,261 11,396 13,811 13,811 3,291 3,385
Adjusted operating income 4,382 3,070 3,523 3,328 2,416 3,509 4,431 4,431 1,156 931
Adjusted pretax income 4,608 3,345 3,910 3,462 2,268 3,354 4,240 4,240 1,138 907
Adjusted net income 3,602 2,583 3,030 2,616 1,677 2,639 3,492 3,492 938 764
Adjusted diluted EPS 1.50 1.15 1.36 1.32 0.86 1.36 1.90 1.92 0.49 0.43
Shares out (avg) 2,403 2,255 2,223 1,980 1,954 1,944 1,838 1,823 1,924 1,778
Cash from operations 4,751 3,969 3,949 1,894 3,906 3,969 5,527 5,527 1,483 1,837
Capex 747 896 831 440 367 444 675 675 160 165
Free cash flow 4,004 3,073 3,118 1,454 3,539 3,525 4,852 4,852 1,323 1,672
… % of revenue:
Gross profit 17.7% 16.6% 19.1% 17.9% 17.5% 18.5% 22.3% 22.3% 21.0% 21.1%
R&D 0.8% 0.9% 1.0% 1.1% 1.2% 1.1% 1.4% 1.4% 1.1% 1.5%
Adjusted operating income 7.9% 5.3% 5.8% 5.4% 4.6% 5.7% 7.1% 7.1% 7.4% 5.8%
Cash, investments 9,070 10,298 7,972 9,092 11,008 14,365 14,818 14,818 14,365 14,818
Receivables 5,448 6,152 7,693 6,443 8,543 10,136 9,803 9,803 10,136 9,803
Inventory 588 660 1,180 867 1,051 1,301 1,404 1,404 1,301 1,404
LT investments 3,011 2,470 1,967 954 1,113 1,503 4,776 4,776 1,503 4,776
PP&E, net 1,993 2,409 2,668 2,277 2,181 1,953 2,124 2,124 1,953 2,124
Tangible assets 23,252 25,480 25,133 24,039 27,884 32,739 36,838 36,838 32,739 36,838
Payables 9,868 10,430 11,492 8,309 11,373 11,293 11,656 11,656 11,293 11,656
Short-term debt 65 188 225 113 663 851 2,867 2,867 851 2,867
Long-term debt 625 569 362 1,898 3,417 5,146 6,387 6,387 5,146 6,387
Tangible equity 4,047 4,284 1,401 1,810 -127 1,906 1,222 1,222 1,906 1,222
TBV / tangible assets 17% 17% 6% 8% 0% 6% 3% 3% 6% 3%
TBV per share 1.68 1.90 0.63 0.92 -0.07 0.98 0.66 0.69 0.99 0.69

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Dell, founded in 1984, provides IT products and services.

INVESTMENT HIGHLIGHTS
• Transitioning to higher-margin enterprise and
services markets from historical consumer/product
focus. Services revenue grew 6% y-y to $12.2 billion
in FY12 (20% of revenue, up from 12% in FY08).
Consumers represent less than 20% of revenue.
• Uses products as “anchor tenants” in order to
win services business. Scale and product range (#2
and #3 global supplier of PCs and notebooks) is
aiding services business wins. Services backlog
grew 11% y-y to $15.5 billion as of February 3.
• Trailing P/E of 8x is undemanding given global
growth opportunities and net cash. Dell expects
non-GAAP EPS for FY13 (excl. amortization and
other items) to “exceed the record $2.13” of FY12.
• Targeting long-term sales growth of >5-7%, with
a GAAP operating income margin of 7%+, and cash
from operations in excess of net income.
• Strong balance sheet, with $18.2 billion of cash
and investments, $4.7 billion of net financing
receivables, offset by $9.3 billion of debt. Dell’s
direct model operates with negative working capital.
• Founder Michael Dell (46) owns 14% and
returned as CEO in 2007. He has allocated capital
in a shareholder-friendly way, focusing on “profit
share,” not unit share, as well as on share buybacks.
• Repurchased ~$6.5 billion of stock in the last
three fiscal years (~20% of recent market value).

INVESTMENT RISKS & CONCERNS
• Stagnant revenue over the last five years despite
nearly $10 billion spent on acquisitions, including
Perot Systems (services), EqualLogic and
Compellent (storage). Without organic revenue
growth, sustainable EPS growth will be challenging.
• Challenges in public segment (27% of revenue)
include “weakened demand after the federal year-
end,” a “more competitive environment,” and cash-
strapped governments across much of Europe.
• Competition in services and enterprise markets,
where IBM, HP and CA possess deeper services
capabilities and longer-standing client relationships.
Consumer products business remains difficult.
• Low R&D spending (1% of sales). While past
M&A has worked well, sustaining innovation may
be hard if it remains reliant on acquisitions.

MAJOR HOLDERS
CEO Dell 14% | Other insiders 1% | Southeastern 8%
SELECTED OPERATING DATA
1

FYE January 31 2008 2009 2010 2011 2012
∆ units 5% 7% -6% 12% 1%
∆ revenue 6% 0% -13% 16% 1%
Revenue ($bn) $61 $61 $53 $61 $62
% of revenue by segment:
Large enterprise 31% 29% 27% 29% 30%
Public 24% 25% 27% 27% 27%
Small & medium business 26% 24% 23% 24% 24%
Consumer 19% 21% 23% 20% 19%
EBIT margin by segment:
Large enterprise 7% 6% 6% 8% 10%
Public 9% 8% 9% 9% 10%
Small & medium business 8% 9% 9% 10% 11%
Consumer 1% 2% 1% 1% 3%
Corporate -1% -1% -2% -2% -2%
2

EBIT margin 6% 5% 4% 6% 7%
2

% of revenue by product group:
Desktop PCs 32% 28% 24% 24% 23%
Mobility 29% 30% 31% 31% 31%
Software and peripherals 16% 17% 18% 17% 16%
Servers and networking 11% 11% 11% 12% 13%
Services 8% 9% 11% 12% 13%
Storage 4% 4% 4% 4% 3%
Revenue growth by product group:
Desktop PCs -2% -10% -25% 13% -4%
Mobility 16% 4% -11% 14% 1%
Software and peripherals 10% 7% -10% 8% 0%
Servers and networking 12% 0% -7% 26% 10%
Services -2% 7% 5% 36% 8%
Storage 8% 10% -18% 5% -15%
% of revenue from U.S. 53% 52% 53% 52% n/a
Selected items as % of revenue:
Gross profit 19% 18% 18% 19% 22%
R&D 1% 1% 1% 1% 1%
Net income 5% 4% 3% 4% 6%
Net cash from ops 6% 3% 7% 6% 9%
D&A 1% 1% 2% 2% 2%
Capex 1% 1% 1% 1% 1%
Cash conversion cycle (days) -36 -25 -36 -33 -36
∆ shares out (avg) -1% -11% -1% -1% -5%
1
Figures reflect the acquisition of Perot Systems in November 2009.
2
Includes $391 million of intangible amortization as well as $313 million of
severance/facility action and acquisition-related items. Excluding these items,
EBIT margin would be 8.3% (up from 6.7% in the year-ago period).

CATALYSTS
• Potential for organic revenue growth as “we’re
through the majority” of business pruning
• Continued buybacks (targeted at 10-30% of FCF)
• Potential for dividend (cash repatriation an issue?)

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
In the words of founder and CEO Michael Dell, “customers think of Dell in much broader terms now, trusting us with their
comprehensive IT needs, from the datacenter to the device.” At a trailing P/E of 8x, the market is slow in recognizing the
extent of Dell’s transition from a consumer products focus to higher-margin enterprise and services markets. While organic
revenue growth remains a challenge, we like Dell’s cost leadership, progress on margins, and global growth opportunities.
Additional positives are the strong balance sheet as well as management’s focus on shareholder value creation.



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DELL – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended February 3, 2012 and average
EBIT margin for past seven fiscal years

Based on median consensus EPS
estimate for the fiscal year ending
February 2, 2014; adjusted for net cash

Based on free cash flow for the twelve
months ended February 3, 2012; fair
value adjusted for net cash holdings





TTM net sales: $62 billion

Consensus EPS estimate: $2.18

Operating cash flow: $5.5 billion
multiplied by

multiplied by

minus
Average 7-year EBIT margin: 6.0%

Shares outstanding: 1.8 billion

Capex: $680 million
equals

equals

equals
Estimated EBIT: $3.7 billion

Implied net income estimate: $3.9 billion

Free cash flow: $4.9 billion
multiplied by

minus

minus
Assumed fair value multiple of EBIT:

Assumed net interest: $64 million

Assumed net interest: $64 million
5x

equals

equals
equals

Adjusted net income: $3.9 billion

Adjusted free cash flow: $4.8 billion
Estimated fair enterprise value of

multiplied by

divided by
Dell: $19 billion

Industry median P/E, based on

Industry median FCF yield: 8.1% (*)
plus

next FY consensus EPS: 12.2x (*)

divided by
Cash, ST investments: $15 billion

multiplied by

Assumed required FCF yield as a
plus

Assumed fair value multiple as a portion

percentage of the industry FCF yield:
Long-term investments at fair value

of the industry median multiple:

90%
discount of 50%: $2.4 billion

110%

(7.3% required FCF yield)
minus

(13.4x fair value multiple)

equals
Total debt: $9.3 billion

equals

Estimated fair enterprise value of
equals

Estimated fair enterprise value of

Dell: $65 billion
Estimated fair value of the common

Dell: $52 billion

plus
equity of Dell:

plus

Cash and investments: $15 billion
$26 billion, or $15 per share

Cash and investments: $15 billion

minus
(based on 1.8 billion shares out)

minus

Total debt: $9.3 billion
15% downside from the recent

Total debt: $9.3 billion

equals
stock price ($17 per share)

equals

Estimated fair value of the common

Estimated fair value of the common

equity of Dell:
(*) Represents Computer Hardware industry
median multiple.
Source: Company filings, The Manual of Ideas
analysis, assumptions and estimates.


equity of Dell:

$71 billion, or $40 per share

$57 billion, or $32 per share

(based on 1.8 billion shares out)

(based on 1.8 billion shares out)

127% upside to the recent

83% upside to the recent

stock price ($17 per share)

stock price ($17 per share)


DELL – CALCULATION OF FREE CASH FLOW

Source: Company presentation dated February 2012.


DELL – MANAGEMENT’S OUTLOOK FOR FY2013

Source: Company presentation dated February 2012.

Dell’s guidance for >$2.13 in EPS
highlights the market’s low valuation of
the equity at less than $20 per share.
We note that Dell has $4+ billion in net
cash, which contributes little to EPS at
recent low interest rates. Cash
repurchases should be accretive both to
EPS and to intrinsic value per share.

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DELL – SELECTED FINANCIAL DATA, FY10-FY12 (in millions)


Source: Company financial supplement, February 2012.
FY12 GAAP results: revenue up +1%
Y/Y, operating income of 7.1%, Cash
flow from operations of 1.6x net income

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DeVry (DV) – Ariel ^, FPA ^^, Lane Five ¯
Services: Schools, Member of S&P 500

DOWNERS GROVE IL, 630-515-7700 www.devryinc.com
Trading Data Consensus EPS Estimates Valuation
Price: $36.99 (as of 2/24/12) Month # of P/E FYE 7/1/11 8x
52-week range: $32.73–$66.85 Latest Ago Ests P/E FYE 6/30/12 10x
Market value: $2.5 billion This quarter $0.99 $1.08 17 P/E FYE 6/30/13 11x
Enterprise value: $2.2 billion Next quarter 0.83 0.89 17 P/E FYE 6/30/14 9x
Shares outstanding: 66.4 million FYE 6/30/12 3.63 3.81 19 EV/ LTM revenue 1.0x
Ownership Data FYE 6/30/13 3.51 3.96 18 EV/ LTM EBIT 6x
Insider ownership: 2% FYE 6/30/14 4.11 4.58 5 P / tangible book 4.7x
Insider buys (last six months): 18 LT growth 5.1% 10.0% 9 Greenblatt Criteria
Insider sales (last six months): 12 EPS Surprise Actual Estimate LTM EBIT yield 16%
Institutional ownership: 83% 1/26/12 $0.92 $1.00 LTM pre-tax ROC >100%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended June 30, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 781 840 934 1,092 1,462 1,915 2,182 2,153 552 524
Gross profit 346 386 447 589 792 1,089 1,257 1,206 322 283
Adjusted operating income 39 64 109 162 240 411 494 415 136 89
Adjusted pretax income 31 58 111 172 242 413 494 419 136 92
Adjusted net income 25 43 83 126 171 280 330 310 89 84
Adjusted diluted EPS 0.36 0.61 1.16 1.76 2.39 3.93 4.75 4.48 1.26 1.24
Dividend 0.00 0.00 0.10 0.12 0.16 0.20 0.24 0.27 0.12 0.15
Shares out (avg) 70 71 71 71 72 71 70 69 70 68
Cash from operations 87 91 125 199 250 392 408 353 78 33
Capex 43 25 39 63 74 131 136 145 31 29
Free cash flow 44 66 87 136 176 261 272 208 47 4
… % of revenue:
Gross profit 44.4% 46.0% 47.9% 53.9% 54.2% 56.9% 57.6% 56.0% 58.3% 54.0%
Adjusted operating income 5.0% 7.6% 11.6% 14.9% 16.4% 21.5% 22.6% 19.3% 24.6% 16.9%
Cash, investments 162 131 129 220 225 323 450 288 462 288
Receivables 39 47 43 55 104 119 115 146 153 146
PP&E, net 287 273 259 239 308 388 468 525 415 525
Tangible assets 547 518 496 648 719 919 1,131 1,094 1,125 1,094
Payables 31 40 34 70 72 90 64 51 62 51
Debt 225 125 0 0 125 0 0 0 0 0
Total liabilities 397 308 202 252 507 448 461 570 565 570
Common equity 513 565 642 766 927 1,179 1,390 1,354 1,270 1,354
Tangible equity 150 210 294 396 211 470 670 524 560 524
TBV / tangible assets 27% 41% 59% 61% 29% 51% 59% 48% 50% 48%
TBV per share 2.14 2.97 4.14 5.55 2.95 6.61 9.63 7.76 7.98 7.76
EBIT/capital employed 13% 28% 51% >100% >100% >100% >100% >100% >100% 17%

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BUSINESS OVERVIEW
DeVry is an education company operating in three segments:
DeVry University (65% of trailing revenue): provides
undergraduate and graduate degrees in business, technology,
and management. Recent enrollment totals ~64,000
undergraduates and ~23,000 graduate coursetakers.
*

Medical & Healthcare (27%): includes Ross University
(medical and veterinary schools), the Chamberlain College of
Nursing, Carrington Colleges, and the American University
of the Caribbean (acquired in August 2011 for $235 million).
Int’l, K-12 & Professional (8%): includes 84%-owned DeVry
Brasil; online high-school teaching provider AAI; and the exam
reviews/training business of Becker (CPA) and Stalla (CFA).

INVESTMENT HIGHLIGHTS
• DeVry University (~65% of revenue and ~70%
of trailing EBIT) drives overall performance.
DeVry U. has ~95 U.S. locations and offers mainly
BA and higher degrees in business and technology
fields. Student detail: ~50%+ are 25-39 years; ~55%
are male; ~40% white, ~30% black, ~15% Hispanic.
• EV-to-trailing EBIT of ~5x overstates regulatory
risk. DeVry University appears well within key
regulatory requirements, including recent changes.
While new enrollments are down, the market likely
underestimates DeVry’s long-term earning power.
• “Diversification strategy is helping mitigate the
challenges at DeVry University and Carrington”
as Ross, AUC, Chamberlain, Becker and DeVry
Brasil “continue to perform well.”
• New $100 million buyback in November 2011.
• ~$290 million of cash and no debt at yearend 2011.

INVESTMENT RISKS & CONCERNS
• New undergraduates declined 24% y-y to ~13,600
students in the fall of 2011 (at DeVry University).
The decline reflects exposure to negative regulatory
changes such as in recruitment practices (short-
term?) as well as the prolonged economic weakness.
• Valuation not as attractive if sustainable EBIT
margins are closer to 10%, similar to other U.S.
government-dependent sectors such as defense.
Assuming a 10% margin on trailing revenue, yields
$215 million of EBIT (~10x EV-to-EBIT multiple).
• Title IV represents 81% of FY11 revenue at
DeVry University.
**
While this is comfortably
within guidelines, the dependence of its students on
federal financial aid leaves DeVry vulnerable.

CATALYSTS
• Potential stabilization of new student enrollments
• Additional share buybacks
SELECTED OPERATING DATA
FYE June 30 2007 2008 2009 2010 2011
YTD
12/31/11
∆ DeVry U. enrollment
1
5% 10% 17% 23% 15% -13%
∆ revenue 11% 17% 34% 31% 14% -3%
∆ EBIT 60% 59% 45% 75% 20% -32%
2

∆ employees (end) 13% 16% 51% 18% 3% n/a
Revenue ($bn) 0.9 1.1 1.5 1.9 2.2 1.0
% of revenue by segment:
DeVry University 78% 76% 68 66% 67% 64%
Medical/Healthcare 15% 16% 25% 26% 26% 29%
Int’l, K-12, Professional 7% 8% 7% 8% 8% 8%
Revenue growth by selected segment:
DeVry University 8% 14% 19% 28% 16% -8%
Medical/Healthcare 24% 24% 114% 40% 10% 8%
EBIT margin by selected segment:
3

DeVry University 5% 10% 13% 23% 25% 18%
Medical/Healthcare 29% 29% 23% 21% 19% 15%
2

Int’l, K-12, Professional 38% 37% 25% 10% 20% 9%
EBIT margin 11% 15% 16% 21% 23% 16%
2

U.S. as % of revenue 86% 86% 88% 87% 88% 84%
Selected items as % of revenue:
Net income 8% 11% 11% 15% 15% 6%
D&A 5% 4% 3% 3% 3% 4%
Capex 4% 6% 5% 7% 6% 6%
DeVry University – selected enrollment data (000s):
Undergraduates
4
40.4 44.6 52.1 64.0 73.5 64.1
Graduate coursetakers
5
14.3 16.5 18.8 22.1 23.8 23.3
% of total enrollment by degree (all DeVry schools):
6

Doctoral 7% 7% 5% 4% 3% n/a
Master’s 21% 21% 17% 18% 18% n/a
Bachelor’s 62% 61% 52% 53% 56% n/a
Associate 11% 11% 15% 16% 16% n/a
Certificate 0% 0% 11% 9% 7% n/a
Employees (‘000s;end)
7
5.4 6.2 9.4 11.1 11.4 n/a
∆ shares out (avg) 1% 0% 0% -1% -2% -4%
1
Based on undergraduate enrollment only (see footnote #4 for more details).
New student counts decreased 24% y-y to 13,588 students in the fall of 2011.
2
YTD EBIT excludes $75 million impairment charge.

3
Segment margins exclude certain corporate costs/reconciliations (not material).

4
Reflects fall enrollment for each previous year; YTD reflects fall 2011.
5
Reflects graduate coursetakers in May of each year; YTD is November 2011.
“Coursetaker” enrollment refers to the number of courses taken by a student.
6
Applies to fall enrollment of the previous year.
7
Includes full/part-time faculty and staff but excludes part-time student employees.

MAJOR HOLDERS
Co-founder Keller 9% | Other insiders 4% | Baron 10%

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? ´´´
*
Undergraduate count is based on the fall semester 2011; graduate count is
based on the November 2011 session and refers to courses per student.
**
Calculation is based on the 90/10 Rule, excluding temporary relief benefits.
(90/10 Rule: an institution becomes ineligible for Title IV funds if for two
consecutive years it derives >90% of its cash basis revenue from Title IV).
THE BOTTOM LINE
For-profit education provider DeVry is in no danger of breaching U.S. regulatory requirements, including recently enacted rules.
While new enrollments continue to decline, DeVry’s career-oriented programs, relatively diversified funding sources (~25%
from non-Title IV sources), and strong balance sheet should enable it to survive industry challenges. At the recent valuation of
5x EV-to-trailing EBIT, the market is underestimating the company’s moat and substantial long-term earning power.


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DEVRY – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on tangible book value as of
December 31, 2011

Based on free cash flow for the twelve
months ended December 31, 2011

Based on median consensus EPS
estimate for the fiscal year ending June
29, 2013





Book value: $1.4 billion

Operating cash flow: $350 million

Consensus FY13 EPS estimate: $3.51
minus

minus

minus
Intangibles: $830 million

Capex: $145 million

Assumed haircut to FY13 consensus
equals

equals

EPS estimate: 5% * $3.51
Tangible book value: $520 million

Free cash flow: $208 million

equals
multiplied by

divided by

Revised FY13 EPS estimate: $3.33
Industry price to book: 1.8x (*) (†)

Industry median FCF yield: 8.1% (*)

multiplied by
equals

equals

Corresponding industry P/E: 15.7x (*)
Industry multiple-implied fair value:

Industry FCF yield-implied fair value:

equals
$960 million ($15 per share)

$2.6 billion ($39 per share)

Industry multiple-implied fair value:
multiplied by

multiplied by

$3.5 billion ($52 per share)
Assumed DV multiple as a

Assumed required FCF yield as a

multiplied by
percentage of the industry multiple:

percentage of the industry FCF yield:

Assumed DV multiple as a
95%

80%

percentage of the industry multiple:
(1.7x multiple of tangible book)

(6.5% required FCF yield)

125%
equals

equals

(19.6x fair value P/E multiple)
Estimated fair value of the common

Estimated fair value of the common

equals
equity of DeVry:

equity of DeVry:

Estimated fair value of the common
$920 million ($14 per share)

$3.2 billion, or $48 per share

equity of DeVry:
(based on 66 million shares out)

(based on 66 million shares out)

$4.3 billion ($65 per share)
63% downside from the recent

30% upside to the recent

(based on 66 million shares out)
stock price ($37 per share)

stock price ($37 per share)

77% upside to the recent

stock price ($37 per share)
(*) Represents Schools industry median multiple.
(†) In order to be conservative, we apply the industry median multiple of book value to the company’s tangible book value.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


DEVRY – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance
(Click to visit ∆ to Reach Tang. TTM EPS Yield LTM Rev./ ∆ Rev. % TTM Rev.
relevant websites) 7-Year MV EV Book/ FCF This Next Rev./ Empl. Last Gross Adj.
Low High ($mn) ($mn) MV Yield TTM FY FY EV ($000) TTM Q Profit EBIT
Apollo Group / APOL -36% 73% 6,590 5,503 15% 10% 7% 7% 7% 83% 83 -8% -11% 61% 23%
Corinthian Colleges / COCO -75% 344% 415 512 46% 20% 3% 7% 11% 335% 154 -11% -14% 38% 3%
Education Management / EDMC -60% 56% 2,418 3,591 n/m 9% 8% 6% 5% 80% 198 4% -4% 48% 15%
ITT Educational / ESI -44% 80% 1,979 1,751 9% 18% 15% 11% 10% 86% 238 -6% -10% 63% 34%
Strayer / STRA -38% 136% 1,313 1,374 3% 9% 8% 6% 6% 46% 293 -1% -9% 53% 29%
DeVry / DV -58% 101% 2,455 2,167 21% 8% 9% 10% 9% 99% 210 3% -5% 56% 19%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


DEVRY – COMPONENTS OF FREE CASH FLOW

Source: Company annual report.

Free cash flow has roughly
approximated net income in
recent years.

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DEVRY – SEGMENT DETAIL, FY2009-FY2011

Source: Company annual report.
Strong growth in
segment EBIT

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FLIR Systems (FLIR) – Weitz ^
Capital Goods: Aerospace and Defense, Member of S&P 500 WILSONVILLE OR, 503-498-3547 www.flir.com
Trading Data Consensus EPS Estimates Valuation
Price: $26.07 (as of 2/24/12) Month # of P/E FYE 1/1/12 19x
52-week range: $21.86–$37.29 Latest Ago Ests P/E FYE 12/31/12 16x
Market value: $4.1 billion This quarter $0.33 $0.37 13 P/E FYE 12/31/13 14x
Enterprise value: $3.9 billion Next quarter 0.38 0.40 13 P/E FYE 12/31/14 11x
Shares outstanding: 156.0 million FYE 12/31/12 1.66 1.66 13 EV/ LTM revenue 2.5x
Ownership Data FYE 12/31/13 1.88 1.89 12 EV/ LTM EBIT 12x
Insider ownership: <1% FYE 12/31/14 2.33 2.43 3 P / tangible book 4.4x
Insider buys (last six months): 2 LT growth 14.4% 15.7% 4 Greenblatt Criteria
Insider sales (last six months): 2 EPS Surprise Actual Estimate LTM EBIT yield 8%
Institutional ownership: n/a 2/10/12 $0.49 $0.45 LTM pre-tax ROC 43%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 509 575 779 1,077 1,147 1,388 1,544 1,544 438 405
Gross profit 277 315 433 606 659 764 829 829 233 225
Adjusted operating income 126 137 192 285 347 360 313 313 100 110
Adjusted pretax income 122 133 186 290 340 363 311 311 102 108
Adjusted net income 91 101 134 201 230 248 223 356 70 77
Adjusted diluted EPS 0.65 0.74 1.00 1.45 1.54 1.59 1.41 2.26 0.44 0.49
Dividend 0.00 0.00 0.00 0.00 0.00 0.06 0.25 0.25 0.06 0.07
Shares out (avg) 139 136 134 138 149 156 158 158 159 156
Cash from operations 73 115 116 218 272 255 244 244 45 116
Capex 34 43 44 28 42 66 42 42 15 11
Free cash flow 39 72 72 191 230 189 202 202 31 105
… % of revenue:
Gross profit 54.4% 54.8% 55.6% 56.3% 57.4% 55.0% 53.7% 53.7% 53.2% 55.5%
R&D 10.1% 10.5% 9.3% 8.4% 8.0% 8.4% 9.5% 9.5% 8.0% 8.6%
Adjusted operating income 24.8% 23.8% 24.6% 26.4% 30.3% 26.0% 20.3% 20.3% 22.9% 27.1%
Cash, investments 107 139 204 289 422 193 441 441 193 441
Receivables 143 168 203 239 235 340 325 325 340 325
Inventory 104 136 179 208 217 303 336 336 303 336
Total current assets 409 487 656 813 980 955 1,234 1,234 955 1,234
PP&E, net 60 92 121 122 139 189 186 186 189 186
Tangible assets 484 597 795 959 1,173 1,198 1,484 1,484 1,198 1,484
Debt 206 253 227 183 58 0 248 248 0 248
Tangible equity 152 198 394 563 882 863 916 916 863 916
TBV / tangible assets 31% 33% 50% 59% 75% 72% 62% 62% 72% 62%
TBV per share 1.09 1.46 2.94 4.06 5.91 5.53 5.78 5.88 5.43 5.88
EBIT/capital employed 47% 47% 51% 63% 71% 60% 43% 43% 71% 73%

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BUSINESS OVERVIEW
FLIR provides imaging and threat detection technologies
used for airborne and ground-based surveillance, condition
monitoring, manufacturing process control, search and
rescue, drug interdiction, transportation safety, border and
maritime patrol, chemical, biological, radiological, nuclear,
and explosives (CBRNE) detection, and other applications.

INVESTMENT HIGHLIGHTS
• World’s largest infrared vendor, offering thermal
detection and chemical, radiological/nuclear, and
explosives sensor systems. FLIR has leading
product breadth and a fully integrated commercial
operation with a focus on building awareness of
advanced detection. FLIR operates in large markets
(~$20 billion) growing in mid to high single digits.
• 22% revenue and EPS CAGR from 2001-2011,
reflecting strong management execution. Earl Lewis
(67) has been chairman and CEO since 2000.
Market share gains appear likely to continue due to
FLIR’s cost competitiveness and R&D efficiency.
• Balanced business, with ~50% of revenue each
from the U.S. and international, and ~50% each
from government systems and commercial systems.
Non-U.S. government clients are ~
2
/
3
of revenue.
• Expects revenue of $1.55-$1.65 billion in 2012, up
0%-7% from 2011; and net income of $1.60-$1.70
per share, up 16%-23% from 2011. Given FLIR’s
M&A-driven strategy, we view EPS growth as a
much more meaningful measure than sales growth.
• Ongoing stock buyback, with repurchases of $41
million, $73 million, $36 million, and $160 million
in 2008, 2009, 2010 and 2011, respectively. In
addition, the company recently increased the
quarterly dividend from $0.06 to $0.07 per share.

INVESTMENT RISKS & CONCERNS
• Acquisition-driven growth strategy has risks,
though it has created significant shareholder value
to date. FLIR may need to identify progressively
larger M&A targets to meet its growth objectives,
which may make it more difficult to identify
compelling targets at accretive purchase prices.
• One-third of revenue from U.S. government,
exposing FLIR to budgetary pressures, decreases in
military activity, and generally long sales cycles. On
the flip side, the government is unlikely to default.

POTENTIAL CATALYSTS
• Continued share repurchases
• EPS- and value-accretive acquisitions
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 36% 38% 7% 21% 11%
∆ gross profit 38% 40% 9% 16% 9%
∆ assets 28% 21% 20% 24% 16%
∆ book value 56% 36% 43% 26% 4%
∆ BV per share 58% 31% 32% 21% 2%
Revenue ($mn) 779 1,077 1,147 1,388 1,544
% from U.S. government 39% 41% 43% 34% 31%
1

% of revenue by segment:

Thermal vision and measurement 51% 47% 43% 41% 43%
Raymarine - - - 7% 11%
Surveillance 49% 53% 57% 48% 37%
Detection - - - 3% 5%
Integrated systems - - - - 4%
% of revenue by geography:

U.S. 61% 62% 59% 53% 53%
1

Europe 22% 22% 21% 23% 25%
1

Other foreign 16% 16% 20% 24% 23%
1

Selected items as % of revenue:

Gross profit 56% 56% 57% 55% 54%
R&D 9% 8% 8% 8% 10%
EBIT 25% 26% 30% 26% 20%
Net income 17% 19% 20% 18% 14%
D&A 4% 4% 4% 4% 5%
Capex 6% 3% 4% 5% 3%
Tangible assets ($mn) 795 959 1,173 1,198 1,484
Selected items as % of tangible assets:

Cash, investments 26% 30% 36% 16% 30%
Receivables 26% 25% 20% 28% 22%
Inventory 23% 22% 18% 25% 23%
PP&E, net 15% 13% 12% 16% 13%
Payables 7% 5% 5% 7% 6%
Current liabilities 20% 18% 16% 21% 16%
LT debt 26% 19% 5% 0% 17%
Tangible equity 50% 59% 75% 72% 62%
Return on tang. equity 45% 42% 32% 28% 25%
Return on equity (ROE) 26% 27% 22% 18% 14%
Trailing P/E (end) 35x 24x 23x 19x 18x
Forward P/E (end) 24x 21x 21x 22x 15x
Diluted EPS (cont.) ($) 0.89 1.28 1.45 1.54 1.38
Dividends per share ($) – – – 0.06 0.25
BV per share (end) ($) 5 6 8 10 10
Share price (end) ($) 31 31 33 30 25
Volume (mn shares) 348 450 532 478 330
Shares out (avg) (mn) 134 138 149 156 158
∆ shares out (avg) -1% 3% 8% 5% 1%
1
Represents estimate based on results for YTD ended September 30, 2011.

MAJOR HOLDERS
CEO 1% | Other insiders 1% | Capital World 12% | Baillie
Gifford 11% | T Rowe 5% | Artisan 4% | Earnest 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
FLIR is the leader in infrared imaging and threat detection technologies used by a wide range of governmental and
commercial customers around the world. Current management has executed well over the past decade, driving both strong
business performance and strong returns to shareholders. FLIR appears to be a somewhat overlooked yet high-quality
business with real opportunity for continued market share gains and accretive acquisitions. The company should have a long
trajectory of strong performance, making the recent valuation quite compelling even if the shares are not dirt cheap.



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FLIR SYSTEMS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013

Based on free cash flow for the twelve
months ended December 31, 2011





TTM net revenue: $1.5 billion

Consensus FY13 EPS estimate: $1.88

Operating cash flow: $244 million
multiplied by

minus

minus
Assumed operating margin: 20.3%

Assumed haircut to FY13 consensus

Capex: $42 million
equals

EPS estimate: 5% * $1.88

equals
Est. operating income: $310 million

equals

Free cash flow: $202 million
multiplied by

Revised FY13 EPS estimate: $1.79

divided by
Assumed fair value multiple:

multiplied by

Industry median FCF yield: 4.8% (*)
6.0x

Corresponding industry P/E: 12.2x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

Industry multiple-implied fair value:

$4.2 billion ($27 per share)
FLIR Systems: $1.9 billion

$3.4 billion ($22 per share)

multiplied by
plus

multiplied by

Assumed required FCF yield as a
Cash, ST investments: $440 million

Assumed FLIR multiple as a

percentage of the industry FCF yield:
minus

percentage of the industry multiple:

75%
Total debt: $248 million

125%

(3.6% required FCF yield)
equals

(15.3x fair value P/E multiple)

equals
Estimated fair value of the common

equals

Estimated fair value of the common
equity of FLIR Systems:

Estimated fair value of the common

equity of FLIR Systems:
$2.1 billion, or $13 per share

equity of FLIR Systems:

$5.6 billion, or $36 per share
(based on 156 million shares out)

$4.2 billion ($27 per share)

(based on 156 million shares out)
49% downside from the recent

(based on 156 million shares out)

38% upside to the recent
stock price ($26 per share)

4% upside to the recent

stock price ($26 per share)

stock price ($26 per share)

(*) Represents Aerospace and Defense industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


FLIR SYSTEMS – COMPARISON TO SELECTED PEER GROUPS

1
Represents the average of L-3, Raytheon, General Dynamics, Northrop Grumman, and ITT Corp.
2
Represents the average of Cubic Corp., ASEI, Teledyne, Kratos, Harris Corp., II-VI Inc., and ViaSat.
3
Represents the average of FEI Co., Garmin, MKS, Mettler-Toledo, National Instruments, PerkinElmer, Roper, Rofin-Sinar, Trimble Navigation, Waters Corp.
Source: Company presentation dated November 2011.

Impressive
revenue-per-
employee
performance

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FLIR SYSTEMS – MARKET SHARE GAINS, 2006-2010

*
Represents Systems sales only and does not include Cores & Components.
Source: Company presentation dated January 2012.


FLIR SYSTEMS – ACQUISITION METHODOLOGY AND ACQUIRED COMPANIES

Source: Company presentation dated January 2012.


FLIR SYSTEMS – CAPITAL ALLOCATION TREND, 2000-2011

Source: Company presentation dated January 2012.
Capital allocation has focused on
M&A; as the company gets bigger,
internal capex and share
repurchases may receive a greater
share of deployable capital
Historical
market share
gains appear
likely to
continue
M&A strategy has created
value, driving strong returns
for shareholders over the
past decade

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Google (GOOG) – Brave Warrior ^, Lone Pine ^, Pennant ^, Scout ^^, Tiger ^
Technology: Computer Services, Member of S&P 500 MOUNTAIN VIEW CA, 650-253-0000 www.google.com
Trading Data Consensus EPS Estimates Valuation
Price: $609.90 (as of 2/24/12) Month # of P/E FYE 1/1/12 20x
52-week range: $473.02–$670.25 Latest Ago Ests P/E FYE 12/31/12 14x
Market value: $198.3 billion This quarter $9.59 $9.58 36 P/E FYE 12/31/13 12x
Enterprise value: $157.9 billion Next quarter 9.96 9.93 36 P/E FYE 12/31/14 11x
Shares outstanding: 325.1 million FYE 12/31/12 42.41 42.36 39 EV/ LTM revenue 4.2x
Ownership Data FYE 12/31/13 50.03 49.77 34 EV/ LTM EBIT 13x
Insider ownership: <1% FYE 12/31/14 57.29 57.23 12 P / tangible book 4.0x
Insider buys (last six months): 10 LT growth 18.3% 18.4% 12 Greenblatt Criteria
Insider sales (last six months): 9 EPS Surprise Actual Estimate LTM EBIT yield 7%
Institutional ownership: 84% 1/19/12 $9.50 $10.49 LTM pre-tax ROC >100%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 6,139 10,605 16,594 21,796 23,651 29,321 37,905 37,905 8,440 10,584
Gross profit 3,562 6,380 9,945 13,174 14,807 18,904 24,717 24,717 5,494 6,882
R&D 600 1,229 2,120 2,793 2,843 3,762 5,162 5,162 1,051 1,298
Adjusted operating income 2,107 3,550 5,084 6,632 8,312 10,381 12,242 12,242 2,982 3,507
Adjusted pretax income 2,232 4,011 5,674 6,948 8,381 10,796 12,936 12,826 3,142 3,489
Adjusted net income 1,555 3,077 4,204 5,322 6,520 8,505 10,347 10,237 2,543 2,705
Adjusted diluted EPS 5.64 10.21 13.52 16.95 20.62 26.69 32.06 31.68 7.95 8.34
Shares out (avg) 276 301 311 314 316 319 323 323 320 324
Cash from operations 2,459 3,581 5,775 7,853 9,316 11,081 14,565 14,565 3,526 3,924
Capex 853 1,903 2,403 2,359 810 4,018 3,438 3,438 2,545 951
Free cash flow 1,606 1,678 3,373 5,494 8,506 7,063 11,127 11,127 981 2,973
… % of revenue:
Gross profit 58.0% 60.2% 59.9% 60.4% 62.6% 64.5% 65.2% 65.2% 65.1% 65.0%
R&D 9.8% 11.6% 12.8% 12.8% 12.0% 12.8% 13.6% 13.6% 12.5% 12.3%
Adjusted operating income 34.3% 33.5% 30.6% 30.4% 35.1% 35.4% 32.3% 32.3% 35.3% 33.1%
Cash, investments 8,034 11,244 14,219 15,846 24,485 34,975 44,626 44,626 34,975 44,626
Receivables 688 1,322 2,308 2,642 3,202 5,002 6,172 6,172 5,002 6,172
LT investments 0 1,032 1,060 85 129 523 790 790 523 790
PP&E, net 962 2,395 4,039 5,234 4,845 7,759 9,603 9,603 7,759 9,603
Tangible assets 9,994 16,581 22,590 25,931 34,819 50,551 63,650 63,650 50,551 63,650
Short-term debt 0 0 0 0 0 3,465 1,218 1,218 3,465 1,218
Long-term debt 0 0 0 0 0 0 2,986 2,986 0 2,986
Tangible equity 9,141 15,148 19,944 22,402 30,327 38,941 49,221 49,221 38,941 49,221
TBV / tangible assets 91% 91% 88% 86% 87% 77% 77% 77% 77% 77%
TBV per share 33.14 50.25 64.17 71.35 95.91 122.18 152.49 151.82 121.71 151.82
EBIT/capital employed >100% >100% >100% 90% >100% >100% >100% >100% >100% >100%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Google provides Internet-based services to users, advertisers,
publishers and other content providers.

INVESTMENT HIGHLIGHTS
• Ad-driven business model based on the #1-
trafficked Internet site/search engine Google.com.
Advertising accounts for 95%+ of revenue with the
AdWords application enabling advertisers to place
ads on Google-owned websites (including #3 global
site YouTube) as well as those of network members.
• Valuation may be justified by ad business alone,
leaving other monetization options as upside.
While some products are likely to also depend on ads
for revenue, others could be monetized in other ways.
Next to Google.com and YouTube, other key products
are: Android (250+ million devices on Android OS,
up ~50 million since November 2011), Google+
(launched in June 2011; 90+ million users), Gmail
(350 million users; “growing rapidly”), and Chrome.
• Online advertising penetration still in the early
innings? The share of online is to rise from ~16%
in 2011 to 21% in 2014 (TV ads: flat at ~40%; print
ads: to decline from ~30% to ~25%).
*
Google has
~50% share (up from ~44% in 2010) of the global
online ad spend of ~$73 billion in 2011 (up 14% y-y).
• Remains best-positioned to take advantage of
online ad growth. Google has ~85% share of paid
search (~50% of all online ad spend) and has strong
positions in display ads (~35%) and in classified.
• Founders Page (38) and Brin (37) own 8% each.
Page returned as CEO in April 2011, replacing Eric
Schmidt (55), who is now executive chairman.
• $40 billion of net cash at yearend 2011.

INVESTMENT RISKS & CONCERNS
• Capital allocation. With no signs of potential
capital return, and increasing capex and M&A (e.g.
pending $13 billion Motorola Mobility acquisition),
reinvestment risk is a key consideration for investors.
• Margin of safety? Google relies on search technology
and human talent to fend off rivals in online search.
While difficult, a rival may invent a “better” search
engine. In non-search ad markets, Google already
has to contend with new rivals (e.g. Facebook).
• Competition and technological change may make
the monetization of other businesses challenging.
Given the significant value of the existing business,
new businesses may not be meaningful enough to
provide enough equity upside given the risks.
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 56% 31% 9% 24% 29%
∆ EBIT 43% 30% 25% 25% 13%
2

∆ net income 37% 1% 54% 30% 14%
Revenue ($bn) 16.6 21.8 23.7 29.3 37.9
% of revenue by type:
Advertising-Google websites 64% 66% 66% 66% 69%
Advertising-Google Network sites 35% 31% 30% 30 27%
Licensing and other 1% 3% 3% 4% 4%
Revenue growth by major type:
Advertising-Google websites 68% 36% 9% 24% 34%
Advertising-Google Network sites 39% 16% 7% 23% 18%
% of revenue by geography:
1

U.S. 52% 49% 47% 48% 46%
U.K. 15% 14% 13% 11% 11%
Rest of World 32% 37% 40% 41% 43%
Selected items as % of revenue:
Gross profit 60% 60% 63% 64% 65%
R&D 13% 13% 12% 13% 14%
EBIT 31% 30% 35% 35% 31%
2

Net income 25% 19% 28% 29% 26%
Net cash from operations 35% 36% 39% 38% 38%
D&A 6% 7% 6% 5% 5%
Capex 14% 11% 3% 14% 9%
Traffic acq. costs/ad revenue
3
30% 28% 27% 26% 24%
∆ shares out (avg) 3% 1% 1% 1% 1%
1
Based on billing addresses of customers.
2
2011 EBIT includes a $500 million charge related to the resolution of the
Department of Justice investigation. Excluding this charge, EBIT growth would
have been 18% y-y and EBIT margin would have been 32% in 2011.

3
Cost of revenue consists primarily of traffic acquisition costs. These costs
consist of amounts paid to Google Network members and to certain other
distribution partners who distribute toolbar and other products or otherwise
direct search queries to Google websites. These amounts are primarily based
on revenue share contracts with Network members and distribution partners.

CATALYSTS
• Potential return of capital (no indication yet)
• Continued capture of online advertising growth
• Monetization of YouTube, Android, Google+ etc.

MAJOR HOLDERS
Shares out: 258 million class A shares (GOOG; one vote per
share) and 67 million class B shares (10 votes per share). Co-
founders Brin and Page each own ~40% of class B shares.
Economics: Co-founder and CEO Page 8% | Co-founder Brin
8% | Chairman Schmidt 3% | Other insiders 2% | FMR 6%

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? ´´´´´
*
Source: ZenithOptimedia.
THE BOTTOM LINE
Google has parlayed its leadership in online search to become a dominant platform for online advertising spend. The secular
shift of advertising dollars from offline to online, coupled with Google’s dominant competitive position, provides a long
runway for revenue and profit growth. This alone may justify the recent enterprise value, leaving the monetization of other
products (e.g. Android, Google+, YouTube, Chrome) as upside potential. Size considerations and a lack of capital return to
shareholders, however, increase capital allocation and reinvestment risks, leading to a less than desirable margin of safety.



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GOOGLE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on free cash flow for the twelve
months ended December 31, 2011; fair
value adjusted for net cash holdings

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013; adjusted for net
cash





TTM net revenue: $38 billion

Operating cash flow: $15 billion

Consensus EPS estimate: $50.03
multiplied by

minus

multiplied by
Assumed operating margin: 30.0%

Capex: $3.4 billion

Shares outstanding: 330 million
equals

equals

equals
Est. operating income: $11 billion

Free cash flow: $11 billion

Implied net income estimate: $16 billion
multiplied by

minus

minus
Assumed fair value multiple:

Assumed net interest: $64 million

Assumed net interest: $64 million
6.0x

equals

equals
equals

Adjusted free cash flow: $11 billion

Adjusted net income: $16 billion
Estimated fair enterprise value of

divided by

multiplied by
Google: $68 billion

Industry median FCF yield: 6.4% (*)

Industry median P/E, based on
plus

divided by

next FY consensus EPS: 17.5x (*)
Cash, ST investments: $45 billion

Assumed required FCF yield as a

multiplied by
plus

percentage of the industry FCF yield:

Assumed fair value multiple as a portion
Long-term investments at fair value

75%

of the industry median multiple:
discount of 50%: $400 million

(4.8% required FCF yield)

120%
minus

equals

(21.0x fair value multiple)
Total debt: $4.2 billion

Estimated fair enterprise value of

equals
equals

Google: $232 billion

Estimated fair enterprise value of
Estimated fair value of the common

plus

Google: $340 billion
equity of Google:

Cash and investments: $45 billion

plus
$109 billion, or $335 per share

minus

Cash and investments: $45 billion
(based on 330 million shares out)

Total debt: $4.2 billion

minus
45% downside from the recent

equals

Total debt: $4.2 billion
stock price ($610 per share)

Estimated fair value of the common

equals

equity of Google:

Estimated fair value of the common
(*) Represents Computer Services industry
median multiple.
Source: Company filings, The Manual of Ideas
analysis, assumptions and estimates.


$272 billion, or $837 per share

equity of Google:

(based on 330 million shares out)

$381 billion, or $1,171 per share

37% upside to the recent

(based on 330 million shares out)

stock price ($610 per share)

92% upside to the recent

stock price ($610 per share)

GOOGLE – COMPONENTS OF FREE CASH FLOW

Source: Company annual report.

FCF has grown
strongly due to
global adoption of
AdWords, and
growth is likely to
continue into the
foreseeable future

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GOOGLE – QUARTERLY REVENUE ($ in millions)



GOOGLE – U.S. vs. INTERNATIONAL REVENUE ($ in millions)



GOOGLE – TRAFFIC ACQUISITION COSTS ($ in millions)

Source for the above charts: Company presentation dated January 2012.
Q4 tends to be the seasonally
strongest quarter for Google due
to holiday ad spending, but it’s
difficult to spot the seasonality
amid strong secular growth
Click here for an article on the outlook
for ad spending, including online ads.
International revenue as a
percentage of total revenue has
remained surprisingly stable
over the past three years; one
would expect that international
growth will outpace U.S. growth
due to the lower rate of
penetration internationally
Traffic acquisition costs as a
percentage of revenue have
been declining, highlighting the
operating leverage inherent in
Google’s business model;
we would keep an eye on
whether this metric stabilizes as
an indicator of perhaps lower
incremental margin leverage
going forward

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MEMC Electronic Materials (WFR) – Altai ^, Third Point ^^
Technology: Semiconductors, Member of S&P MidCap 400 ST. PETERS MO, 636-474-5000 www.memc.com
Trading Data Consensus EPS Estimates Valuation
Price: $4.18 (as of 2/24/12) Month # of P/E FYE 1/1/12 n/m
52-week range: $3.65–$14.51 Latest Ago Ests P/E FYE 12/31/12 32x
Market value: $963 million This quarter -$0.16 -$0.06 21 P/E FYE 12/31/13 7x
Enterprise value: $2.3 billion Next quarter -0.01 0.01 20 P/E FYE 12/31/14 6x
Shares outstanding: 230.5 million FYE 12/31/12 0.13 0.29 24 EV/ LTM revenue 0.8x
Ownership Data FYE 12/31/13 0.61 0.76 13 EV/ LTM EBIT n/m
Insider ownership: <1% FYE 12/31/14 0.71 n/a 5 P / tangible book 1.6x
Insider buys (last six months): 1 LT growth 15.0% 15.0% 1 Greenblatt Criteria
Insider sales (last six months): 1 EPS Surprise Actual Estimate LTM EBIT yield -56%
Institutional ownership: 81% 2/15/12 -$0.09 -$0.06 LTM pre-tax ROC -61%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 1,107 1,541 1,922 2,005 1,164 2,239 2,716 2,716 850 718
Gross profit 367 689 1,001 1,005 128 337 295 295 116 -59
Adjusted operating income 257 558 850 858 -74 15 -145 -145 24 -163
Adjusted pretax income 252 591 1,112 589 -47 -19 -229 -229 15 -203
Adjusted net income 249 369 826 392 -15 28 -381 -381 14 -399
Adjusted diluted EPS 1.17 1.66 3.66 1.73 -0.07 0.12 -1.66 -1.66 0.06 -1.73
Shares out (avg) 214 222 226 227 224 227 230 230 227 230
Cash from operations 321 528 917 641 33 348 -15 -15 287 -177
Capex 163 148 276 304 253 632 1,051 1,051 217 190
Free cash flow 158 379 641 337 -220 -285 -1,066 -1,066 70 -367
… % of revenue:
Gross profit 33.1% 44.7% 52.1% 50.1% 11.0% 15.1% 10.9% 10.9% 13.6% -8.2%
R&D 3.0% 2.3% 2.0% 2.0% 3.5% 2.5% 3.2% 3.2% 2.2% 3.1%
Adjusted operating income 23.2% 36.2% 44.2% 42.8% -6.4% 0.6% -5.4% -5.4% 2.8% -22.7%
Cash, investments 154 586 1,316 1,137 719 707 586 586 707 586
Receivables 125 199 198 197 246 332 203 203 296 203
Inventory 120 80 36 81 141 215 322 322 215 322
LT investments 0 0 0 285 298 110 55 55 110 55
PP&E, net 495 604 834 1,041 1,466 2,034 2,393 2,393 2,034 2,393
Tangible assets 1,148 1,766 2,887 2,931 3,239 4,217 4,732 4,732 4,217 4,732
Short-term debt 18 5 5 6 32 72 148 148 72 148
Long-term debt 35 29 26 26 384 611 1,779 1,779 611 1,779
Tangible equity 711 1,167 2,035 2,076 1,842 1,857 589 589 1,857 589
TBV / tangible assets 62% 66% 70% 71% 57% 44% 12% 12% 44% 12%
TBV per share 3.33 5.25 9.02 9.15 8.23 8.18 2.56 2.55 8.18 2.55
EBIT/capital employed 45% 90% >100% >100% -11% 1% -61% -61% 5% -95%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
MEMC provides silicon wafers and, since the acquisition of
SunEdison in 2009, photovoltaic energy solutions.
The Semiconductor Materials segment (38% of revenue)
provides silicon wafers, the base material for semi devices.
Solar Materials (35%) sells silicon wafers for solar apps.
Depending on market conditions, MEMC may also sell
intermediate silicon products such as polysilicon and silane
to solar cell manufacturers and flat panel display producers.
Solar Energy (SunEdison) (27%) provides solar energy
systems and facilitates the sale of solar generated electricity.
The two solar segments will be combined starting in 2012.

INVESTMENT HIGHLIGHTS
• A leader in silicon wafers for solar applications.
MEMC has a history of providing silicon wafers for
both semiconductor devices and solar applications.
MEMC produces most of its polysilicon in-house.
• Vertically integrated via SunEdison. MEMC’s
position in silicon and downstream solar enables it
to grow the customer base and lower costs in the
silicon supply chain. Solar generating capacity is
300+ MW, with 3.0 GW in pipeline (~70% likely to
be executed; ~50% outside North America).

INVESTMENT RISKS & CONCERNS
• Took $1.4 billion of mostly solar-related charges
in 2011, reflecting at best poor capital allocation
and at worst a lack of value in solar businesses.
• Could become distressed, despite $1.3 billion in
non-recourse debt. With tangible assets of $4.7
billion and liabilities of $4.1 billion, even small
further deterioration on the side asset would render
the equity worthless, at least in accounting terms.
• Future of solar industry highly uncertain. Solar
energy is not cost-competitive with other sources,
especially coal and natural gas in the U.S. Even if
solar energy keeps gaining share, the technology-
driven nature of the industry makes it impossible to
predict the winners across the value chain.
• SunEdison’s strategic challenge too big for
MEMC to handle? The downstream solar industry
faces multiple impediments, including large-scale
financing requirements, complex project execution,
a low margin profile, and infancy of adoption.
• Volatile performance, with spot polysilicon prices
affecting profitability of materials segment. Vertical
integration has improved the operating profile.
• Semiconductor wafer market is mature, with
likely future annual volume growth of roughly 6%.
Pricing pressure could impact sales and margins.
SELECTED OPERATING DATA
FYE December 31 2006 2007 2008 2009 2010 2011
Revenue ($mn) 1,541 1,922 2,005 1,164 2,239 2,716
Growth (y-y) 39% 25% 4% -42% 92% 21%
% of revenue by segment:
Semi materials
100% 100%
46% 50% 44% 38%
Solar materials 54% 49% 37% 35%
Solar energy 0% 0% 0% 0% 19% 27%
EBIT margin by segment:
Semi materials
36% 44%
19% -35% 7% -3%
Solar materials 68% 32% 11% -70%
Solar energy n/m n/m n/m -163% -3% -65%
Corporate and other
1
n/m n/m -3% -9% -6% -5%
Total EBIT margin 36% 44% 43% -11% 1% -48%
% of revenue by major geography:
Taiwan 18% 17% 25% 29% 25% n/a
China 14% 21% 19% 25% 19% n/a
U.S. 34% 24% 24% 13% 11% n/a
Korea 12% 16% 14% 8% 8% n/a
Selected items as % of revenue:
Gross profit 45% 52% 50% 11% 15% 11%
R&D 2% 2% 2% 3% 2% 3%
EBIT 36% 44% 43% -11% 1% -48%
D&A 5% 4% 5% 11% 7% 8%
Capex - solar systems 0% 0% 0% 2% 13% 22%
Capex - all other 10% 14% 15% 19% 16% 17%
Selected semiconductor materials data:
Change in wafer prices 10% -41% -43% -30% 9% n/a
Polysilicon / total sales
2
19% 22% 19% 3% 0% n/a
Return on tang. equity 39% 51% 19% -4% 2% n/m
Tang. equity to assets 66% 72% 69% 57% 44% 13%
∆ shares out (avg) 4% 2% 1% -1% 1% 1%
1
Corporate expenses broken out separately starting in 2008.
2
Represents sales of excess polysilicon as a percentage of total sales.

RESTRUCTURING & IMPAIRMENT CHARGES, Q4 2011


MAJOR HOLDERS
CEO <1% | Other insiders <1% | Thornburg 11% | Altai 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
MEMC has been a provider of silicon wafers to the semiconductor and solar energy industries, and has acquired a business
developing solar power plants for utilities and governments (SunEdison). MEMC has been hurt by a severe downturn in the
solar industry, which has yet to prove its commercial viability. Moreover, the future technology winner and economics across
the value chain remain unclear, making it impossible to judge how MEMC will fare over time. With liabilities amounting to
~8x tangible equity, we view the downside risk as significant in case the semiconductor and solar markets remain weak.



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MEMC ELECTRONIC MATERIALS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on tangible book value as of
December 31, 2011

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013

Based on revenue for the twelve months
ended December 31, 2011 and average
EBIT margin for past seven fiscal years





Book value: $740 million

Consensus FY13 EPS estimate: $0.61

TTM net sales: $2.7 billion
minus

minus

multiplied by
Intangibles: $149 million

Assumed haircut to FY13 consensus

Average 7-year EBIT margin: 19.3%
equals

EPS estimate: 5% * $0.61

equals
Tangible book value: $590 million

equals

Estimated EBIT: $530 million
multiplied by

Revised FY13 EPS estimate: $0.58

multiplied by
Industry price to book: 1.6x (*) (†)

multiplied by

Assumed fair value multiple of EBIT:
equals

Corresponding industry P/E: 13.4x (*)

6x
Industry multiple-implied fair value:

equals

equals
$930 million ($4.00 per share)

Industry multiple-implied fair value:

Estimated fair enterprise value of
multiplied by

$1.8 billion ($7.80 per share)

MEMC Electronic: $3.2 billion
Assumed WFR multiple as a

multiplied by

plus
percentage of the industry multiple:

Assumed WFR multiple as a

Cash, ST investments: $590 million
50%

percentage of the industry multiple:

plus
(0.8x multiple of tangible book)

75%

Long-term investments at fair value
equals

(10.1x fair value P/E multiple)

discount of 25%: $41 million
Estimated fair value of the common

equals

minus
equity of MEMC Electronic:

Estimated fair value of the common

Total debt: $1.9 billion
$470 million ($2.00 per share)

equity of MEMC Electronic:

equals
(based on 230 million shares out)

$1.3 billion ($5.80 per share)

Estimated fair value of the common
52% downside from the recent

(based on 230 million shares out)

equity of MEMC Electronic:
stock price ($4.20 per share)

39% upside to the recent

$1.9 billion, or $8.00 per share

stock price ($4.20 per share)

(based on 230 million shares out)
(*) Represents Semiconductors industry median multiple.
(†) We apply the industry median multiple of book value to the company’s tangible book value.

92% upside to the recent

stock price ($4.20 per share)
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


MEMC ELECTRONIC MATERIALS – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance Tang.
(Click to visit ∆ to Reach Tang. EPS Yield LTM Rev./ ∆ Rev. % TTM Rev. Equity/
relevant websites) 7-Year MV EV Book/ This Next Rev./ Empl. Last Gross Adj. Tang.
Low High ($mn) ($mn) MV TTM FY FY EV ($000) TTM Q Profit R&D EBIT Assets
First Solar / FSLR -34% 791% 3,075 2,920 116% 17% 16% 12% 93% 445 5% 26% 40% 5% 21% 68%
LDK Solar / LDK -57% 1194% 888 4,241 103% 8% neg. neg. 63% 119 40% -30% 18% 1% 10% 13%
Suntech / STP -44% 2841% 554 2,466 212% 2% neg. neg. 140% 171 36% 9% 14% 1% 3% 24%
Trina Solar / TSL -64% 368% 620 952 190% 29% neg. 11% 237% 175 47% -5% 22% 2% 11% 43%
Yingli / YGE -35% 986% 604 1,857 214% 28% neg. neg. 138% 225 47% 30% 23% 2% 13% 28%
MEMC / WFR -13% 2199% 963 2,304 61% -160% 3% 15% 118% 485 21% -16% 11% 3% -5% 12%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


MEMC ELECTRONIC MATERIALS – MANAGEMENT’S OUTLOOK FOR 2012

Source: Company presentation dated February 15, 2012.

A lack of clear earnings
guidance by management
reflects the significant near-term
challenges MEMC faces due to
downturns in the semiconductor
and solar industries

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MEMC ELECTRONIC MATERIALS – SUNEDISON ACCOUNTING PECULIARITIES



1
Applies to projects accounted under real estate accounting rules only. Revenue deferral is associated with performance ratio guarantee and maximum O&M
liability exposure; the latter, typically less than 5% of revenue, is not illustrated above. Deferred revenue is recognized upon expiration of a contingency period.
2
Assumes no local tax or other cash expenses.
3
SG&A is not allocated to the project level, and, therefore, is excluded from the project pre-tax profit.
Source: Company presentation dated February 15, 2012.
Major difference between GAAP and non-GAAP
treatment causes investor confusion with regard to
true underlying business performance; ultimately, we
would focus on free cash flow generation as the key
operating metric

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Newfield Exploration (NFX) – Eagle Capital ^, FPA ^, Oakmark ^
Energy: Oil & Gas Operations, Member of S&P 500

HOUSTON TX, 281-847-6000 www.newfield.com
Trading Data Consensus EPS Estimates Valuation
Price: $36.60 (as of 2/24/12) Month # of P/E FYE 1/1/12 9x
52-week range: $34.42–$77.93 Latest Ago Ests P/E FYE 12/31/12 10x
Market value: $4.9 billion This quarter $0.87 $1.09 21 P/E FYE 12/31/13 8x
Enterprise value: $7.9 billion Next quarter 0.89 1.15 21 P/E FYE 12/31/14 9x
Shares outstanding: 134.6 million FYE 12/31/12 3.83 4.62 29 EV/ LTM revenue 3.2x
Ownership Data FYE 12/31/13 4.33 5.52 23 EV/ LTM EBIT 11x
Insider ownership: 1% FYE 12/31/14 4.09 5.12 5 P / tangible book 1.3x
Insider buys (last six months): 9 LT growth 10.7% 8.9% 3 Greenblatt Criteria
Insider sales (last six months): 10 EPS Surprise Actual Estimate LTM EBIT yield 9%
Institutional ownership: 95% 2/21/12 $0.95 $1.01 LTM pre-tax ROC 10%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 1,762 1,673 1,783 2,225 1,338 1,883 2,471 2,471 528 677
Gross profit 1,557 1,397 1,469 1,960 1,079 1,557 2,018 2,018 439 557
Adjusted operating income 900 605 531 961 277 621 736 736 170 180
Adjusted pretax income 555 962 294 1,328 459 836 840 840 42 96
Adjusted net income 352 616 172 1,490 802 530 539 539 29 68
Adjusted diluted EPS 2.82 4.85 1.34 11.55 6.17 4.02 4.02 4.02 0.22 0.51
Shares out (avg) 125 127 128 129 130 132 134 134 133 134
Cash from operations 1,109 1,384 1,154 854 1,578 1,630 1,589 1,589 323 416
D&A 520 624 682 697 587 644 767 767 181 239
Capex 1,054 1,706 2,601 2,310 1,409 1,971 2,644 2,644 560 599
Free cash flow 55 -322 -1,447 -1,456 169 -341 -1,055 -1,055 -237 -183
… % of revenue:
Gross profit 88.4% 83.5% 82.4% 88.1% 80.6% 82.7% 81.7% 81.7% 83.1% 82.3%
Adjusted operating income 51.1% 36.2% 29.8% 43.2% 20.7% 33.0% 29.8% 29.8% 32.2% 26.6%
D&A 29.5% 37.3% 38.3% 31.3% 43.9% 34.2% 31.0% 31.0% 34.3% 35.3%
Capex 59.8% 102.0% 145.9% 103.8% 105.3% 104.7% 107.0% 107.0% 106.1% 88.5%
Cash, investments 39 90 370 24 78 39 76 76 39 76
Total current assets 540 851 927 1,206 893 731 775 775 731 775
PP&E, net 4,430 5,483 5,958 5,758 5,247 6,608 8,020 8,020 6,608 8,020
Tangible assets 5,019 6,573 6,924 7,305 6,254 7,494 8,991 8,991 7,494 8,991
Total current liabilities 670 1,123 929 1,085 873 928 932 932 928 932
Debt 870 1,172 1,050 2,213 2,037 2,304 3,006 3,006 2,304 3,006
Tangible equity 2,316 3,000 3,519 3,257 2,768 3,343 3,920 3,920 3,343 3,920
TBV / tangible assets 46% 46% 51% 45% 44% 45% 44% 44% 45% 44%
TBV per share 18.52 23.62 27.50 25.25 21.29 25.33 29.25 29.25 25.14 29.25
EBIT/capital employed 21% 13% 10% -16% -19% 11% 10% 10% 11% 10%

Ten-Year Stock Price Performance and Trading Volume Dynamics

$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Feb 12 Feb 11 Feb 10 Feb 09 Feb 08 Feb 07 Feb 06 Feb 05 Feb 04 Feb 03

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BUSINESS OVERVIEW
Newfield Exploration is a natural gas and oil E&P company
operating in the U.S. Mid-Continent, the Rocky Mountains,
and onshore Texas; and offshore in Malaysia and China.

INVESTMENT HIGHLIGHTS
• Moving away from natural gas due to better
economics in oil exploration. Newfield’s overseas
operations already focus on crude oil. Management
expects overall production to come mostly from oil
by 2013 (natural gas contributed 60% in 2011). As a
result of the shift toward oil, natural gas production
should fall in the teens annually in the near future
(“refusing to fund low margin natural gas projects
simply for the sake of absolute production growth”).
Meanwhile, sales price per Mcfe should rise from
$6.50 in 2010 and $8.22 in 2011 to >$10 in 2012.
• Grew PV-10 of proved reserves to $6 billion at
yearend 2011, driven by an increase in proved
reserves of crude oil from 204 million barrels in
2010 to 263 million barrels in 2011. 54% of overall
proved reserves are developed, while 2P is 6.5 Tcfe.
• Sound strategy of living within internal resources,
focusing on oil, and monetizing non-strategic assets
($735 million in recent proceeds). Virtually all
capex will be devoted to oil opportunities in 2012.
The 2012 capex budget of $1.5-1.7 billion is ~$300-
500 million below the 2011 budget, reflecting a
decision to curtail natural gas-related spending.
• Strong hedging position, with 62% of expected
2012 gas production and 95% of expected 2012
domestic oil production hedged as of February.

INVESTMENT RISKS & CONCERNS
• Guiding for flat production in 2012, although the
shift toward oil should benefit revenue and profits.
The large oil hedge position limits upside in 2012
should prices spike on Iran or other developments.
• Cyclical, capital-intensive business with large
capital spending. The latter has exceeded DD&A
by a wide margin, with capex and DD&A of $2.2
billion and $770 million, respectively, in 2011.
Unless natural gas prices rise materially, capex will
likely remain high as the company explores for oil.

POTENTIAL CATALYSTS
• Continued move toward oil production should
create value if natural gas prices remain depressed
• Increase in natural gas prices would significantly
boost profitability and the value of gas reserves
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ proved reserves 10% 18% 23% 3% 5%
∆ production 1% -4% 7% 12% 4%
∆ revenue 7% 25% -40% 41% 31%
∆ assets 5% 5% -14% 20% 20%
∆ book value 17% -9% -15% 21% 17%
∆ BV per share 16% -10% -16% 19% 15%
Revenue ($mn) 1,783 2,225 1,338 1,883 2,471
Proved reserves:

Oil (MMBbls) 114 140 169 204 263
Gas (Bcf) 1,810 2,110 2,605 2,492 2,300
1P reserves (Bcfe) 2,496 2,950 3,616 3,712 3,911
…from natural gas 73% 72% 72% 67% 60%
…from proved developed 1,566 1,827 1,908 2,164 2,129
…from proved developed 63% 62% 53% 58% 54%
2P reserves (Bcfe) n/a n/a 5,509 6,185 6,511
After-tax PV-10 of 1P 4,531 2,929 2,864 4,754 6,000
Production (Bcfe) 245 236 253 283 295
…from oil and liquids 21% 27% 31% 31% 40%
Selected financial data:

Lease operating expense 314 265 259 326 453
Production and other taxes 101 157 63 126 330
DD&A 682 697 587 644 767
G&A 155 141 144 156 185
Impairments and other 0 1,867 1,352 17 0
Operating income 531 -902 -1,067 614 736
Capex and acquisitions, net 1,244 2,281 1,368 1,959 2,238
Selected items as % of revenue:

EBIT (GAAP) 30% -41% -80% 33% 30%
Pretax income (GAAP) 16% -24% -66% 44% 34%
Net income (GAAP) 25% -17% -41% 28% 22%
Tangible assets ($mn) 6,924 7,305 6,254 7,494 8,991
Selected items as % of tangible assets:

Cash, investments 5% 0% 1% 1% 1%
PP&E, net 86% 79% 84% 88% 89%
ST debt 0% 0% 0% 0% 0%
LT debt 15% 30% 33% 31% 33%
Tangible equity 51% 45% 44% 45% 44%
Return on tang. equity 5% 44% 27% 17% 15%
BV per share (end) ($) 28 25 21 25 29
Share price (end) ($) 53 20 48 72 38
Volume (mn shares) 383 577 542 431 575
Shares out (avg) (mn) 128 129 130 132 134
∆ shares out (avg) 1% 1% 1% 2% 2%

MAJOR HOLDERS
Management <1% | Capital World 11% | Wellington 11% |
T Rowe 4% | Eagle Capital 4% | Neuberger 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
Newfield has historically been a natural gas-weighted independent E&P company operating onshore in the U.S. Lee Boothby
became CEO in 2009 and shortly thereafter started moving the company toward crude oil exploration, with the result that
production is anticipated to move from 70/30 gas/oil in 2010 to roughly 50/50 in 2012. Management appears to be making
the right strategic decision to forego overall production growth while natural gas prices are low in favor of improving returns
on invested capital. Still, capex should remain well above DD&A in the near future, negatively impacting free cash flow.
Newfield shares appear to be cheap enough to at least protect value in a low natural gas price environment. Should natural
gas prices rebound to the $5-6 per Mcf range, Newfield’s reserves and profits would jump. We like the risk-reward tradeoff.



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NEWFIELD EXPLORATION – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Value based on per-mcfe value
assumptions for proved and probable
reserves; plus net cash

Based on tangible book value as of
December 31, 2011

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013





Proved reserves, net: 3,911 Bcfe

Book value: $3.9 billion

Consensus FY13 EPS estimate: $4.33
Probable reserves, net: 2,600 Bcfe

minus

minus
multiplied by, respectively

Intangibles: $0

Assumed haircut to FY13 consensus
Assumed value of proved: $1.00 / mcfe

equals

EPS estimate: 5% * $4.33
Assumed value of probable: $0.50 / mcfe

Tangible book value: $3.9 billion

equals
equals, respectively

multiplied by

Revised FY13 EPS estimate: $4.11
Value of proved reserves: $3.9 billion

Industry price to book: 1.8x (*) (†)

multiplied by
Value of probable reserves: $1.3 billion

equals

Corresponding industry P/E: 12.7x (*)
plus

Industry multiple-implied fair value:

equals
Cash: $76 million

$6.9 billion ($52 per share)

Industry multiple-implied fair value:
minus

multiplied by

$7.0 billion ($52 per share)
Total debt: $3.0 billion

Assumed NFX multiple as a

multiplied by
equals

percentage of the industry multiple:

Assumed NFX multiple as a
Estimated fair value of the common

75%

percentage of the industry multiple:
equity of Newfield Exploration:

(1.3x multiple of tangible book)

125%
$2.3 billion, or $17 per share

equals

(15.9x fair value P/E multiple)
(based on 135 million shares out)

Estimated fair value of the common

equals
54% downside from the recent

equity of Newfield Exploration:

Estimated fair value of the common
stock price ($37 per share)

$5.2 billion ($39 per share)

equity of Newfield Exploration:

(based on 135 million shares out)

$8.8 billion ($65 per share)

6% upside to the recent

(based on 135 million shares out)

stock price ($37 per share)

78% upside to the recent
(*) Represents Oil & Gas Operations industry median multiple.

stock price ($37 per share)
(†) We apply the industry median multiple of book value to the company’s tangible book value.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


NEWFIELD EXPLORATION – MANAGEMENT GUIDANCE FOR 2012

Source: Company news release dated February 21, 2012.

Production roughly flat in 2012E,
though the mix is more favorable

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NEWFIELD EXPLORATION – 2011 PRODUCTION AND ONGOING NON-STRATEGIC ASSET SALES

*
Includes approximately $18 million in proceeds from asset sales expected to close in the first quarter of 2012.
Source: Company news release dated February 21, 2012.


NEWFIELD EXPLORATION – 2012 PLANNED CAPITAL INVESTMENTS AND EXPECTED PRODUCTION BY AREA

Source: Company news release dated February 21, 2012.


NEWFIELD EXPLORATION – SHIFTING MIX OF NATURAL GAS TO OIL

Source: Company presentation dated February 2012.
Like many natural gas-weighted
North American E&P companies,
Newfield is aggressively pushing
toward a more liquids-weighted
product mix; with Newfield’s natural
gas production also expected to
decline in absolute terms, one can
make the argument that natural gas
prices may finally have reached
bottom (a difficult assessment given
the already surprisingly long duration
of the natural gas bear market)
2012 capital investment is focused
almost exclusively on liquids plays

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Oracle (ORCL) – Appaloosa ^^, Eagle ^^, Glenview ^^, Markel ^, Weitz ^^
Technology: Software & Programming, Member of S&P 500 REDWOOD SHORES CA, 650-506-7000 www.oracle.com
Trading Data Consensus EPS Estimates Valuation
Price: $29.25 (as of 2/24/12) Month # of P/E FYE 6/1/11 18x
52-week range: $24.72–$36.50 Latest Ago Ests P/E FYE 5/31/12 13x
Market value: $147.0 billion This quarter $0.56 $0.56 38 P/E FYE 5/31/13 11x
Enterprise value: $130.8 billion Next quarter 0.76 0.76 38 P/E FYE 5/31/14 10x
Shares outstanding: 5,025.8 million FYE 5/31/12 2.34 2.34 41 EV/ LTM revenue 3.6x
Ownership Data FYE 5/31/13 2.56 2.56 40 EV/ LTM EBIT 10x
Insider ownership: 22% FYE 5/31/14 2.81 2.83 14 P / tangible book 11.5x
Insider buys (last six months): 6 LT growth 12.1% 12.3% 14 Greenblatt Criteria
Insider sales (last six months): 4 EPS Surprise Actual Estimate LTM EBIT yield 10%
Institutional ownership: 62% 12/20/11 $0.54 $0.57 LTM pre-tax ROC n/m

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended May 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 11/30/11 11/30/10 11/30/11
Revenue 11,799 14,380 17,996 22,430 23,252 26,820 35,622 36,705 8,582 8,792
Gross profit 9,148 11,145 13,805 17,449 18,458 21,056 27,224 28,579 6,425 6,836
Adjusted operating income 4,377 4,958 6,133 8,066 8,555 9,838 12,608 13,564 2,886 3,168
Adjusted net income 3,241 3,603 4,433 5,743 5,827 6,911 9,122 9,781 1,986 2,249
Adjusted diluted EPS 0.63 0.69 0.86 1.12 1.15 1.38 1.81 1.94 0.39 0.45
Dividend 0.00 0.00 0.00 0.00 0.05 0.20 0.21 0.23 0.05 0.06
Shares out (avg) 5,136 5,196 5,170 5,133 5,070 5,014 5,048 5,046 5,044 5,041
Cash from operations 3,552 4,541 5,520 7,402 8,255 8,681 11,214 13,129 944 1,255
D&A 219 583 878 1,212 1,713 1,973 2,428 2,394 614 592
Capex 188 236 319 243 529 230 450 500 121 129
Free cash flow 3,364 4,305 5,201 7,159 7,726 8,451 10,764 12,629 823 1,126
… % of revenue:
Gross profit 77.5% 77.5% 76.7% 77.8% 79.4% 78.5% 76.4% 77.9% 74.9% 77.8%
R&D 12.6% 13.0% 12.2% 12.2% 11.9% 12.1% 12.7% 12.1% 13.0% 12.5%
Adjusted operating income 37.1% 34.5% 34.1% 36.0% 36.8% 36.7% 35.4% 37.0% 33.6% 36.0%
D&A 1.9% 4.1% 4.9% 5.4% 7.4% 7.4% 6.8% 6.5% 7.2% 6.7%
Capex 1.6% 1.6% 1.8% 1.1% 2.3% 0.9% 1.3% 1.4% 1.4% 1.5%
Cash, investments 4,771 7,605 7,020 11,043 12,624 18,469 28,848 31,012 24,845 31,012
Receivables 2,900 3,420 4,589 5,799 4,430 5,585 6,628 4,434 4,406 4,434
PP&E, net 1,442 1,391 1,603 1,688 1,922 2,763 2,857 2,900 2,870 2,900
Tangible assets 10,311 14,692 15,129 20,882 21,305 31,832 44,122 43,764 37,828 43,764
Payables 230 268 315 383 271 775 701 445 762 445
Debt 2,852 5,894 7,593 11,236 10,238 14,655 15,922 14,778 17,035 14,778
Tangible equity 461 675 -2,524 -3,361 -1,021 1,052 10,363 12,774 4,997 12,774
TBV / tangible assets 4% 5% -17% -16% -5% 3% 23% 29% 13% 29%
TBV per share 0.09 0.13 -0.49 -0.66 -0.20 0.21 2.05 2.54 0.99 2.54

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Oracle provides enterprise software. It entered the hardware
business by buying Sun Micro for $7.4 billion in January ‘10.

INVESTMENT HIGHLIGHTS
• World’s #1 enterprise software provider. Added
to core strength in relational databases by buying
50+ companies for $40+ billion since ‘05. Purchases
of PeopleSoft and Siebel, for example, extended
offerings into applications software, and contributed
to the high switching costs of Oracle’s model.
• Several “superinvestors” initiated new positions
in Q4 (share price range: $26-34), including
Boykin Curry, Glenn Greenberg, Larry Robbins,
David Tepper, and Wally Weitz. The recent share
price implies a trailing FCF yield of 9% on a strong
balance sheet (EV-to-trailing adjusted EBIT: <8x).
• Strategy of combining hardware (from Sun
acquisition) and software seems to be paying off:
“Exadata growth was well over 100% compared to
last year, and Exalogic grew more than 100% on a
sequential basis” in the November 2011 quarter.
• “Our engineered systems deliver much higher
performance than IBM’s fastest pSeries computer
and cost performance than commodity Intel servers”
according to CEO Ellison on the F2Q earnings call.
• “Could be back at pre-Sun operating margins
shortly,” implying non-GAAP EBIT margins could
rise from ~45% to ~47%. CFO Catz: “There
remains ample leverage in our business model.”
• Founder and CEO Larry Ellison (67) owns 23%
and has grown Oracle into one of the largest IT
companies since 1977. Despite a penchant for
M&A, Ellison has proven a shrewd capital allocator.
• New $5 billion buyback announced in December.
Buybacks have helped offset dilution from options.
• $16 billion of net cash as of November 2011.

INVESTMENT RISKS & CONCERNS
• Vulnerability to technological change may have
increased due to entry into hardware business
through the Sun Microsystem acquisition in 2010.
Hardware revenue represents ~20% of total revenue.
• Open-source software and software-as-a-service
offerings may lead to less customer demand for
buying software licenses and/or lower profitability.
• Competition includes technology heavyweights
such as IBM, HP, Microsoft, EMC, and SAP.
• Key-man risk related to Larry Ellison.

MAJOR HOLDERS
CEO Ellison 23% | Other insiders <1% | Cap Re 5% | Cap
SELECTED OPERATING DATA
1

FYE May 31 2007 2008 2009 2010 2011
YTD
11/30/11
∆ revenue 25% 25% 4% 15% 33% 7%
∆ revenue ex currency 22% 19% 10% 14% 30% 4%
∆ deferred revenue 22% 33% 1% 31% 13% 4%
∆ EBIT – adjusted 24% 30% 12% 15% 27% 11%
∆ net income 26% 29% 1% 10% 39% 25%
∆ employees (end) 33% 13% 2% 23% 3% 5%
Revenue ($bn) 18.0 22.4 23.3 26.8 35.6 17.2
% of revenue by segment:
Software 79% 80% 81% 77% 67% 67%
Services 21% 20% 19% 15% 13% 14%
Hardware
2
n/m n/m n/m 9% 19% 19%
Revenue growth by segment:
Software 23% 26% 6% 9% 17% 11%
Services 33% 21% -5% -11% 19% 5%
Hardware
2
n/m n/m n/m n/m n/m -6%
% of software revenue by sub-segment:
New licenses 41% 42% 38% 36% 38% 31%
License update/support 59% 58% 62% 64% 62% 69%
Software revenue growth by sub-segment:
New licenses 20% 28% -5% 6% 23% 8%
License update/support 26% 24% 14% 12% 13% 13%
% of new software license revenue by product:
Database/middleware 71% 68% 72% 72% 72% 72%
Applications 29% 32% 28% 28% 28% 28%
% of revenue by geography:
Americas 53% 51% 51% 52% 52% 51%
EMEA 34% 35% 34% 33% 32% 32%
Asia Pacific 14% 14% 15% 15% 16% 17%
Selected items as % of revenue:
Gross profit
3
77% 78% 79% 79% 76% 77%
R&D 12% 12% 12% 12% 13% 13%
EBIT – reported 33% 35% 36% 34% 34% 34%
EBIT – adjusted
4
41% 43% 47% 47% 45% 44%
Net income 24% 25% 24% 23% 24% 23%
Net cash from ops 31% 33% 36% 32% 31% 39%
D&A 6% 7% 8% 8% 8% 8%
Capex 2% 1% 2% 1% 1% 2%
Employees (end; 000s) 74.7 84.2 85.6 105.0 108.4 111.3
∆ shares out (avg) -1% -1% -1% -1% 1% 0%
1
Figures include contribution from various acquisitions including Sun
Microsystems (FY10), BEA (FY08), and Hyperion (FY07), among others.
2
The segment was created following the acquisition of Sun Micro in FY10.
3
Estimated (Oracle does not report “gross profit” in public filings).
4
Excludes intangible amortization, stock-based compensation, and other items.

CATALYSTS
• Continued success of integrated software-hardware
strategy through products such as Exadata/Exalogic
• Return to pre-Sun operating margins “shortly”

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
CEO Ellison has extended Oracle’s core database expertise into applications software and, more recently, hardware through
the purchase of Sun. While competition and Oracle’s size may hinder growth, the fundamental demand driver – the need for
better ways to manage information and automate business processes worldwide – remains intact. Given high switching costs
and incremental growth opportunities, the valuation is undemanding at a 9% trailing FCF yield on a net cash balance sheet.



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ORACLE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended November 30, 2011 and average
EBIT margin for past seven fiscal years

Based on median consensus EPS
estimate for the fiscal year ending May
30, 2013

Based on free cash flow for the twelve
months ended November 30, 2011





TTM net sales: $37 billion

Consensus FY13 EPS estimate: $2.56

Operating cash flow: $13 billion
multiplied by

minus

minus
Average 7-year EBIT margin: 35.8%

Assumed haircut to FY13 consensus

Capex: $500 million
equals

EPS estimate: 5% * $2.56

equals
Estimated EBIT: $13 billion

equals

Free cash flow: $13 billion
multiplied by

Revised FY13 EPS estimate: $2.43

divided by
Assumed fair value multiple of EBIT:

multiplied by

Industry median FCF yield: 4.5% (*)
6x

Corresponding industry P/E: 16.7x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

Industry multiple-implied fair value:

$283 billion ($56 per share)
Oracle: $79 billion

$204 billion ($41 per share)

multiplied by
plus

multiplied by

Assumed required FCF yield as a
Cash, ST investments: $31 billion

Assumed ORCL multiple as a

percentage of the industry FCF yield:
minus

percentage of the industry multiple:

80%
Total debt: $15 billion

110%

(3.6% required FCF yield)
equals

(18.4x fair value P/E multiple)

equals
Estimated fair value of the common

equals

Estimated fair value of the common
equity of Oracle:

Estimated fair value of the common

equity of Oracle:
$95 billion, or $19 per share

equity of Oracle:

$354 billion, or $70 per share
(based on 5.0 billion shares out)

$225 billion ($45 per share)

(based on 5.0 billion shares out)
35% downside from the recent

(based on 5.0 billion shares out)

141% upside to the recent
stock price ($29 per share)

53% upside to the recent

stock price ($29 per share)

stock price ($29 per share)

(*) Represents Software & Programming industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


ORACLE – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance Tang.
(Click to visit ∆ to Reach Tang. EPS Yield LTM Rev./ ∆ Rev. % TTM Rev. Equity/
relevant websites) 7-Year
MV EV
Book/
This Next Rev./ Empl. Last Gross Adj. Tang.
Low High ($mn) ($mn) MV TTM FY FY EV ($000) TTM Q Profit R&D EBIT Assets
IBM / IBM -65% 1% 233,084 252,482 n/m 7% 8% 8% 42% 251 7% 2% 47% 6% 20% -11%
Microsoft / MSFT -53% 19% 264,142 224,338 16% 9% 9% 9% 32% 801 8% 5% 76% 13% 38% 47%
SAP / SAP -57% 1% 82,533 80,544 3% 6% 6% 7% 24% 351 18% 11% 68% 14% 29% 16%
salesforce.com / CRM -91% 11% 19,535 19,379 3% neg. 1% 2% 12% 326 48% 36% 78% 13% -2% 20%
Oracle / ORCL -62% 25% 147,006 130,772 9% 6% 8% 9% 28% 330 15% 2% 78% 12% 37% 29%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


ORACLE – FREE CASH FLOW, FY2006-FY2011 ($ in billions)

Source: Company presentation by Jeff Henley, dated October 2011.

Oracle has grown free cash flow at
~20% CAGR from FY06 to FY11.

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ORACLE – R&D EXPENSE, FY2006-FY2011 ($ in billions)

Source: Company presentation by Jeff Henley, dated October 2011.


ORACLE – ACQUISITIONS

Source: Company presentation by Jeff Henley, dated October 2011.


ORACLE – SELECTED CASH FLOW DATA

Source: Company 10-K filing.
Oracle has aggressively acquired
companies it has perceived as threats
or necessary to being able to provide a
more complete product suite. By most
measures, Oracle’s acquisition strategy
has been a success.
Notable deals include BEA, PeopleSoft,
Siebel, StorageTek, and Sun.
Free cash flow has exceeded net
income in recent years when
acquisitions are excluded from the
calculation. However, since
amortization of intangibles constitutes a
large positive adjustment to net
income, it may be appropriate to
include acquisition payments (averaged
over an appropriate period) in the
calculation of free cash flow.

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Spectrum Brands (SPB) – Harbinger ^
Technology: Electronic Instruments & Controls

MADISON WI, 608-275-3340 www.spectrumbrands.com
Trading Data Consensus EPS Estimates Valuation
Price: $29.19 (as of 2/24/12) Month # of P/E FYE 10/1/11 n/m
52-week range: $20.11–$36.38 Latest Ago Ests P/E FYE 9/30/12 12x
Market value: $1.5 billion This quarter $0.39 $0.39 4 P/E FYE 9/30/13 11x
Enterprise value: $3.2 billion Next quarter 0.77 0.76 4 P/E FYE 9/30/14 9x
Shares outstanding: 51.8 million FYE 9/30/12 2.49 2.48 3 EV/ LTM revenue 1.0x
Ownership Data FYE 9/30/13 2.77 2.91 3 EV/ LTM EBIT 13x
Insider ownership: 57% FYE 9/30/14 3.14 3.40 2 P / tangible book n/m
Insider buys (last six months): 13 LT growth 10.0% 10.0% 1 Greenblatt Criteria
Insider sales (last six months): 4 EPS Surprise Actual Estimate LTM EBIT yield 8%
Institutional ownership: n/a 2/3/12 $0.69 $0.61 LTM pre-tax ROC 37%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended September 30, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 1/1/12 1/2/11 1/1/12
Revenue 1,762 2,462 2,333 2,427 2,231 2,567 3,187 3,175 861 849
Gross profit 686 953 841 920 816 921 1,129 1,114 299 284
Adjusted operating income 171 204 142 200 224 224 318 322 91 94
Adjusted pretax income 62 32 -114 -31 31 -65 107 121 37 51
Adjusted net income 46 60 -169 -21 -42 -128 15 37 2 24
Adjusted diluted EPS 1.06 1.20 -3.32 -0.42 -1.41 -3.56 0.29 0.72 0.03 0.46
Shares out (avg) 44 49 51 51 30 36 51 51 51 52
Cash from operations 218 47 -33 -10 77 57 227 189 -51 -89
Capex 57 60 24 19 11 40 36 37 8 9
Free cash flow 161 -13 -57 -29 66 17 191 152 -59 -98
… % of revenue:
Gross profit 38.9% 38.7% 36.1% 37.9% 36.6% 35.9% 35.4% 35.1% 34.8% 33.5%
Adjusted operating income 9.7% 8.3% 6.1% 8.2% 10.0% 8.7% 10.0% 10.1% 10.5% 11.1%
Cash, investments 30 28 70 105 98 171 142 74 83 74
Receivables 373 366 400 395 300 406 394 408 415 408
Inventory 452 461 396 383 342 530 435 482 512 482
PP&E, net 304 312 282 235 212 201 206 204 197 204
Tangible assets 1,439 1,358 1,344 1,269 1,075 1,504 1,333 1,328 1,393 1,328
Short-term debt 39 43 43 49 54 21 16 23 32 23
Long-term debt 2,268 2,235 2,417 2,475 1,530 1,723 1,536 1,756 1,700 1,756
Total liabilities 3,179 3,097 3,315 3,275 2,360 2,827 2,608 2,772 2,717 2,772
Tangible equity -1,741 -1,739 -1,972 -2,006 -1,284 -1,323 -1,276 -1,444 -1,324 -1,444
TBV / tangible assets -121% -128% -147% -158% -119% -88% -96% -109% -95% -109%
TBV per share -39.83 -35.15 -38.75 -39.38 -42.81 -36.75 -24.96 -27.69 -26.06 -27.69
EBIT/capital employed 19% -37% -43% -116% >100% 31% 41% 37% 49% 61%

Ten-Year Stock Price Performance and Trading Volume Dynamics


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BUSINESS OVERVIEW
Spectrum Brands is a branded consumer products company
that operates in three vertically integrated segments:
Global Batteries & Appliances (81% of revenue): consists of
consumer battery, electric shaving and grooming, electric
personal care, portable lighting and small appliances;
Global Pet Supplies (16%): markets pet supplies globally;
Home and Garden (3%): home/garden and insect control.
Spectrum filed for and emerged from Chapter 11 bankruptcy
in February 2009 and August 2009, respectively.

INVESTMENT HIGHLIGHTS
• Focused on #2 brands in markets with high
barriers, with the goal of offering retailers the best
margin, category management, and merchandising.
• Merger with Russell Hobbs in June 2010 added
branded small household appliances and personal
care products. The $600 million stock deal gave
Russell Hobbs 40% of the combined company.
Management expects to deliver $35-$40 million in
related annual cost synergies by the end of FY12.
• Brands include Rayovac, VARTA, Remington,
Tetra, 8-in-1, Spectracide, Cutter, Black & Decker,
George Foreman, Russell Hobbs, and Farberware.
With respect to VARTA, Spectrum owns rights in
consumer batteries, Johnson Controls owns rights in
automotive batteries, and VARTA AG owns rights
in industrial batteries. Spectrum and Remington
Arms split rights to the Remington brand. Spectrum
licenses Black & Decker for use in a few categories.
• Expects FY12 sales to grow “at or above the rate
of GDP” and to swing to a profit ($2.49 consensus
EPS estimate). FY12 FCF should be $200+ million.
• Federal NOLs of $1.2 billion, plus a roughly equal
amount of state NOLs. These carryforwards, which
expire through 2032, remain fully reserved.

INVESTMENT RISKS & CONCERNS
• Weak balance sheet, with $1.7 billion of net debt
and tangible book value of negative $1.5 billion.
The absence of tangible book, coupled with second-
tier brands (e.g., Rayovac vs. Duracell), makes
long-term evolution of equity value uncertain.
• 54%-owned by Phil Falcone’s firm. If Harbinger’s
LightSquared misstep leads to massive withdrawals,
the firm may be forced to dump Spectrum shares.
On the other hand, Harbinger may put Spectrum up
for auction, potentially creating an upside catalyst.

POTENTIAL CATALYSTS
• Continued deleveraging of balance sheet
• Company sale at potential prodding by Harbinger
SELECTED OPERATING DATA
FYE September 30 2007 2008 2009 2010 2011 1Q12
∆ revenue -5% 4% -8% 15% 24% -1%
∆ gross profit -12% 9% -11% 13% 23% -5%
∆ assets -10% -30% 34% 28% -6% 1%
∆ BV per share -122% 889% -209% 32% -31% -5%
Revenue ($mn) 2,333 2,427 2,231 2,567 3,187 849
% of revenue by segment:

Batteries / appliances n/a 62% 60% 65% 71% 81%
Pet supplies n/a 25% 26% 22% 18% 16%
Home and garden n/a 14% 14% 13% 11% 3%
Operating margin by segment (ex. corporate):

Batteries / appliances n/a 11% 13% 10% 11% 14%
Pet supplies n/a 12% 11% 10% 13% 12%
Home and garden n/a 9% 13% 15% 18% -24%
% of revenue by product category:

Consumer batteries n/a 38% 37% 34% 27% 29%
Small appliances n/a 0% 0% 9% 24% 29%
Pet supplies n/a 25% 26% 22% 18% 16%
Home/garden control n/a 14% 14% 13% 11% 3%
Electric shaving n/a 10% 10% 10% 9% 11%
Electric care n/a 9% 9% 8% 8% 10%
Portable lighting n/a 4% 4% 4% 3% 3%
% of revenue by geography:

U.S. n/a 52% 57% 56% 56% 51%
Rest of world n/a 48% 43% 44% 44% 49%
Selected items as % of revenue:

Gross profit 36% 38% 37% 36% 35% 33%
R&D 1% 1% 1% 1% 1% 1%
EBIT (adj.)
1
6% 8% 10% 9% 10% 11%
Pretax income (adj.)
1
-5% -1% 1% -3% 3% 6%
Net income (adj.)
1,2
-7% -1% -2% -5% 0% 3%
D&A 2% 3% 3% 4% 3% 3%
Capex 1% 1% 0% 2% 1% 1%
Tangible assets ($mn) 1,344 1,269 1,075 1,504 1,333 1,328
Selected items as % of tangible assets:

Cash, investments 5% 8% 9% 11% 11% 6%
Receivables 30% 31% 28% 27% 30% 31%
Inventory 29% 30% 32% 35% 33% 36%
PP&E, net 21% 18% 20% 13% 15% 15%
Payables 21% 22% 17% 22% 24% 22%
ST debt 3% 4% 5% 1% 1% 2%
LT debt 180% 195% 142% 115% 115% 132%
Tangible equity -147% -158% -119% -88% -96% -109%
Shares out (avg) (mn) 51 51 30 36 51 52
∆ shares out (avg) 3% 0% -41% 20% 42% 3%
1
Adjusted for unusual items of -$429 million in ‘07, -$884 million in ‘08, $1.1
billion in ‘09, -$59 million in ‘10, -$90 million in ‘11, and -$11 million in 1Q12.
2
Adjusted for nonrecurring items of -$34 million in 2007, -$26 million in ‘08,
-$86 million in ‘09, and -$2.7 million in ‘10.

MAJOR HOLDERS
CEO <1% | Other insiders <2% | Harbinger 54% | FMR 13%
| D.E. Shaw 4% | DFA 2% | Cyrus 2% | Marc Lasry 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
Spectrum Brands is a turnaround story and an amalgam of second-tier consumer brands, primarily focused on batteries and
small appliances. The 2010 combination with Russell Hobbs brought a number of recognized kitchen appliance and other
brands to Spectrum, boosting scale and providing an opportunity for cost synergies. While management expects $200+ of
FCF in FY12, we do not find Spectrum compelling due to a weak balance sheet and a portfolio of “me, too” brands.



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SPECTRUM BRANDS – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on average adjusted EBIT for the
past seven fiscal years

Based on median consensus EPS
estimate for the fiscal year ending
September 29, 2013

Based on free cash flow for the twelve
months ended January 1, 2012





average of

Consensus FY13 EPS estimate: $2.77

Operating cash flow: $189 million
FY11 adjusted EBIT: $320 million

minus

minus
FY10 adjusted EBIT: $224 million

Assumed haircut to FY13 consensus

Capex: $37 million
FY09 adjusted EBIT: $224 million

EPS estimate: 5% * $2.77

equals
FY08 adjusted EBIT: $200 million

equals

Free cash flow: $152 million
FY07 adjusted EBIT: $142 million

Revised FY13 EPS estimate: $2.63

divided by
FY06 adjusted EBIT: $204 million

multiplied by

Industry median FCF yield: 5.6% (*)
FY05 adjusted EBIT: $171 million

Corresponding industry P/E: 12.4x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Average adjusted EBIT: $212 million

Industry multiple-implied fair value:

$2.7 billion ($53 per share)
minus

$1.7 billion ($33 per share)

multiplied by
Assumed adjustment to average

multiplied by

Assumed required FCF yield as a
seven-year EBIT: 40% * $212 million

Assumed SPB multiple as a

percentage of the industry FCF yield:
equals

percentage of the industry multiple:

95%
Revised “normalized” EBIT: $296 million

120%

(5.3% required FCF yield)
multiplied by

(14.9x fair value P/E multiple)

equals
Assumed fair value EBIT multiple: 6x

equals

Estimated fair value of the common
equals

Estimated fair value of the common

equity of Spectrum Brands:
Estimated fair enterprise value of

equity of Spectrum Brands:

$2.9 billion, or $56 per share
Spectrum Brands: $1.8 billion

$2.0 billion ($39 per share)

(based on 52 million shares out)
plus

(based on 52 million shares out)

91% upside to the recent
Net cash, investments: $74 million

34% upside to the recent

stock price ($29 per share)
minus

stock price ($29 per share)

Total debt: $1.8 billion

(*) Represents Electronic Instruments & Controls industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.
equals

Estimated fair value of the common

equity of Spectrum Brands:

$72 million ($1.40 per share)

(based on 52 million shares out)

95% downside from the recent

stock price ($29 per share)



SPECTRUM BRANDS – CALCULATION OF ADJUSTED EBITDA, FY2007-FY2011 ($ in millions)

1
Combined 12 months ended 9/30/09 refers to the sum of the predecessor period of 10/1/08 to 8/30/09 and the successor period of 8/30/09 to 9/30/09.
2
During FY11, the company recorded accelerated amortization of unamortized discounts and unamortized debt issuance costs totaling $61.4 million as an
adjustment to increase interest expense.
3
Excludes amortization of debt issuance costs.
4
Reflects pro forma earnings of Russell Hobbs as if the
Merger was consummated on October 1, 2008.
5
Adjustment reflects expiring taxes and related estimated penalties, associated with our provision for
presumed credits applied to the Brazilian excise tax on manufactured products, for which the examination period expired.
6
Adjustment reflects accelerated
amortization and/or depreciation associated with restructuring initiatives. As this amount is included within restructuring and related charges, the adjustment
negates the impact of reflecting the add back of depreciation and/or amortization twice. Source: Company presentation dated February 14, 2012.

Spectrum Brands also has no downside protection when book value is considered
(tangible book value is negative).
While GAAP EBITDA has
fluctuated widely over the
past five years, adjusted
EBITDA has grown
relatively consistently.
The bull case on
Spectrum assumes that
this positive trend will
continue.

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SPECTRUM BRANDS – MARKET POSITION IN VARIOUS CATEGORIES

Source: Company presentation dated February 14, 2012.


SPECTRUM BRANDS – GLOBAL FOOTPRINT

Source: Company presentation dated February 14, 2012.
Spectrum has the right
global relationships in
place. The challenge is
growing shelf space and
per-SKU profitability.
Pet supplies and home & garden control products offer perhaps the
best growth opportunity for Spectrum Brands, as the other categories
are more heavily contested by larger, better-known competitors.

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Staples (SPLS) – Force ^^, IVA ^, Olstein ^^, Pzena ^
Consumer Non-Cyclical: Office Supplies, Member of S&P 500 FRAMINGHAM MA, 508-253-5000 www.staples.com
Trading Data Consensus EPS Estimates Valuation
Price: $15.28 (as of 2/24/12) Month # of P/E FYE 1/31/11 13x
52-week range: $11.94–$21.50 Latest Ago Ests P/E FYE 1/31/12 11x
Market value: $10.7 billion This quarter $0.40 $0.40 17 P/E FYE 1/30/13 10x
Enterprise value: $11.6 billion Next quarter 0.31 0.31 14 P/E FYE 1/30/14 9x
Shares outstanding: 699.4 million FYE 1/31/12 1.37 1.37 20 EV/ LTM revenue 0.5x
Ownership Data FYE 1/30/13 1.49 1.49 21 EV/ LTM EBIT 7x
Insider ownership: <1% FYE 1/30/14 1.67 1.67 13 P / tangible book 4.2x
Insider buys (last six months): 2 LT growth 9.9% 9.9% 5 Greenblatt Criteria
Insider sales (last six months): 1 EPS Surprise Actual Estimate LTM EBIT yield 14%
Institutional ownership: 89% 11/15/11 $0.47 $0.47 LTM pre-tax ROC 46%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended January 29, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 10/29/11 10/30/10 10/29/11
Revenue 14,448 16,079 18,161 19,373 23,084 24,276 24,545 24,978 6,538 6,570
Gross profit 4,102 4,583 5,194 5,551 6,247 6,474 6,606 6,730 1,804 1,833
Adjusted operating income 1,057 1,234 1,463 1,548 1,546 1,467 1,631 1,595 523 533
Adjusted pretax income 1,047 1,235 1,471 1,555 1,417 1,240 1,414 1,410 471 490
Adjusted net income 665 784 974 996 979 823 940 982 298 326
Adjusted diluted EPS 0.90 1.07 1.35 1.41 1.40 1.16 1.31 1.38 0.42 0.47
Dividend 0.13 0.17 0.22 0.29 0.33 0.33 0.36 0.39 0.09 0.10
Shares out (avg) 742 732 721 705 698 710 716 710 714 691
Cash from operations 1,138 1,199 1,151 1,361 1,686 2,084 1,447 1,538 759 794
Capex 335 456 529 470 378 313 409 407 95 80
Free cash flow 803 743 623 891 1,308 1,771 1,038 1,131 664 714
… % of revenue:
Gross profit 28.4% 28.5% 28.6% 28.7% 27.1% 26.7% 26.9% 26.9% 27.6% 27.9%
Adjusted operating income 7.3% 7.7% 8.1% 8.0% 6.7% 6.0% 6.6% 6.4% 8.0% 8.1%
D&A 0.1% 0.1% 0.1% 0.1% 0.3% 0.4% 0.3% 0.3% 0.2% 0.2%
Capex 2.3% 2.8% 2.9% 2.4% 1.6% 1.3% 1.7% 1.6% 1.5% 1.2%
Cash, investments 1,470 1,571 1,476 1,272 634 1,416 1,461 1,060 1,370 1,060
Receivables 485 577 721 822 1,841 1,811 1,954 2,125 1,995 2,125
Inventory 1,603 1,706 1,920 2,053 2,404 2,261 2,359 2,527 2,432 2,527
PP&E, net 1,601 1,758 1,974 2,161 2,291 2,165 2,148 2,091 2,104 2,091
Tangible assets 5,527 6,114 6,710 7,040 8,591 9,053 9,316 8,996 9,236 8,996
Debt 559 531 532 366 3,442 2,568 2,602 1,987 2,644 1,987
Tangible equity 2,571 2,863 3,334 3,722 1,082 2,108 2,348 2,553 2,130 2,553
TBV / tangible assets 47% 47% 50% 53% 13% 23% 25% 28% 23% 28%
TBV per share 3.47 3.92 4.63 5.28 1.55 2.97 3.28 3.70 2.98 3.70
EBIT/capital employed 62% 69% 69% 59% 40% 38% 47% 46% 77% 74%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Staples sells office products and provides related services.

INVESTMENT HIGHLIGHTS
• World’s largest office products company. Staples
invented the office superstore concept in 1986 and
has grown to 90,000 employees in 26 countries.
Staples acquired Corporate Express for $2.6 billion
in 2008, strengthening its footprint in breakroom
supplies, printing, promotional, furniture, etc. The
company opened four and closed three stores in
North America in 3Q11, ending with 1,908 stores.
• Scale-advantaged business with strong returns
on capital. The delivery business benefits from high
customer density. In addition, the business is not
easily attacked by online competitors like Amazon
because key product categories, e.g., paper and
bottled water, are too heavy to be mailed efficiently.
• Likely repurchased ~$600 million of stock in
CY11, above prior guidance of $300-$500 million.
Buybacks at recent prices should create value.

INVESTMENT RISKS & CONCERNS
• Economically sensitive, competitive business.
Staples’ size makes top-line growth contingent on
growth in business spending. The firm’s markets are
contested by direct competitors like Office Depot
and OfficeMax as well as large broadline retailers.
• Growth has nearly ground to a halt, with CY11
sales likely increasing in the low single digits.
International operations have underperformed U.S.
operations recently in terms of profitability.
According to CEO Sargent, “International results
[in FQ3] were weaker than expected as tight
expense management was more than offset by very
challenging top line trends.” Despite stagnant
revenue trends, adjusted EPS should grow from
$1.35-$1.39 in CY11 to $1.49 in CY12.
• Returns on capital would be materially lower if
leased stores were treated as debt-financed owned
stores. In other words, in order for Staples to earn
high returns on capital, the owners of the underlying
store real estate must accept low returns on capital.

POTENTIAL CATALYSTS
• Continued share repurchases
• Pick-up in spending by North American businesses
• Improvement in the international demand picture

MAJOR HOLDERS
Management 2% | FMR 4% | Pzena 4% | Fiduciary 4% |
Wellington 3% | Thornburg 3% | Macquarie 2%
SELECTED OPERATING DATA
FYE January 29 2007 2008 2009 2010 2011
YTD
10/29/11
∆ North American SSS 3% -3% -9% -2% -1% -1%
∆ stores (end) 6% 8% 9% 1% 2% 0%
∆ revenue
3
13% 7% 19% 5% 1% 2%
∆ gross profit 13% 7% 13% 4% 2% 3%
∆ BV per share 14% 16% -2% 20% 2% 9%
Stores (end) 1,884 2,038 2,218 2,243 2,281 2,285
Revenue ($bn) 18.2 19.4 23.1 24.3 24.5 18.6
% of revenue by segment:

North American delivery 32% 34% 39% 40% 40% 40%
North American retail 54% 52% 41% 39% 39% 38%
International operations 13% 14% 20% 22% 21% 22%
Operating margin by segment (ex. stock comp):

North American delivery 11% 11% 9% 8% 9% 9%
North American retail 10% 9% 8% 8% 8% 8%
International operations 2% 4% 3% 2% 3% 2%
% of revenue by product line:

Office supplies 47% 47% 47% 48% 49% n/a
Business machines 28% 28% 28% 32% 31% n/a
Computers 18% 18% 18% 15% 15% n/a
Office furniture 7% 7% 7% 5% 5% n/a
% of revenue by geography:

U.S. 74% 73% 68% 67% 67% n/a
Canada 13% 13% 11% 11% 12% n/a
International 13% 14% 20% 22% 21% n/a
Selected items as % of revenue:

Gross profit 29% 29% 27% 27% 27% 27%
EBIT (adjusted)
1
8% 8% 7% 6% 7% 6%
Net income (adjusted)
1
5% 5% 4% 3% 4% 4%
D&A 2% 2% 2% 2% 2% 2%
Capex 3% 2% 2% 1% 2% 1%
Industry gross margin
2
28% 28% 26% 26% 28% 27%
Industry EBIT margin
2
4% 5% 2% 4% 4% 5%
Tangible assets ($mn) 6,710 7,040 8,591 9,053 9,316 8,996
Selected items as % of tangible assets:

Cash, investments 22% 18% 7% 16% 16% 12%
Inventory 29% 29% 28% 25% 25% 28%
PP&E, net 29% 31% 27% 24% 23% 23%
ST debt 3% 0% 17% 1% 6% 5%
LT debt 5% 5% 23% 28% 22% 17%
Tangible equity 50% 53% 13% 23% 25% 28%
Return on tang. equity 31% 28% 41% 52% 42% 29%
Return on equity (ROE) 20% 19% 17% 13% 14% 10%
ROE – industry median
3
14% 12% 5% 10% 13% 11%
Trailing P/E (end) 17x 13x 22x 22x 11x 15x
Forward P/E (end) 17x 16x 24x 19x 10x 10x
Diluted EPS (cont.) ($) 1.32 1.38 1.13 1.02 1.21 1.00
Dividends per share ($) 0.22 0.29 0.33 0.33 0.36 0.30
Shares out (avg) (mn) 721 705 698 710 716 699
∆ shares out (avg) -2% -2% -1% 2% 1% -3%
1
Excludes items of -$174 million in ‘09, -$84 million in ‘10, -$58 million in ‘11.
2
Office Supplies median.
3
2009 benefited from Corporate Express deal.

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
Staples has grown to become the leading retailer of office supplies and related products and services. The company has a
large opportunity to internationally, but global growth has stagnated in recent years. We view the company as one of the
more economically sensitive retailers, though Staples has a strong balance sheet and would therefore not become a distressed
equity even in another economic downturn. At roughly 10x forward earnings, we find the shares enticing but not dirt cheap.



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STAPLES – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended October 29, 2011 and average
EBIT margin for past seven fiscal years

Based on median consensus EPS
estimate for the fiscal year ending
January 28, 2013

Based on free cash flow for the twelve
months ended October 29, 2011





TTM net sales: $25 billion

Consensus FY13 EPS estimate: $1.49

Operating cash flow: $1.5 billion
multiplied by

minus

minus
Average 7-year EBIT margin: 7.2%

Assumed haircut to FY13 consensus

Capex: $410 million
equals

EPS estimate: 5% * $1.49

equals
Estimated EBIT: $1.8 billion

equals

Free cash flow: $1.1 billion
multiplied by

Revised FY13 EPS estimate: $1.42

divided by
Assumed fair value multiple of EBIT:

multiplied by

Industry median FCF yield: 7.2% (*)
6x

Corresponding industry P/E: 10.0x (*)

equals
equals

equals

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

Industry multiple-implied fair value:

$16 billion ($22 per share)
Staples: $11 billion

$9.9 billion ($14 per share)

multiplied by
plus

multiplied by

Assumed required FCF yield as a
Cash, ST investments: $1.1 billion

Assumed SPLS multiple as a

percentage of the industry FCF yield:
minus

percentage of the industry multiple:

75%
Total debt: $2.0 billion

120%

(5.4% required FCF yield)
equals

(12.0x fair value P/E multiple)

equals
Estimated fair value of the common

equals

Estimated fair value of the common
equity of Staples:

Estimated fair value of the common

equity of Staples:
$9.9 billion, or $14 per share

equity of Staples:

$21 billion, or $30 per share
(based on 700 million shares out)

$12 billion ($17 per share)

(based on 700 million shares out)
8% downside from the recent

(based on 700 million shares out)

96% upside to the recent
stock price ($15 per share)

11% upside to the recent

stock price ($15 per share)

stock price ($15 per share)

(*) Represents Office Supplies industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


STAPLES – NORTH AMERICAN RETAIL – CHANGE IN COMPARABLE STORE SALES, 1998-2011

Source: Company disclosure regarding quarterly SSS change.

Change in comparable store sales:
This is calculated as the year-over-year
percentage change in sales for store
locations that were open for business in
comparable periods during the prior year.
Stores become comparable in the 13
th
full
fiscal month in which they are open.
For international locations, the prior year
sales are translated using the current
year’s average exchange rates for
comparability.
Recessions have been tough on Staples’
SSS growth, but the company appears to
have an ability to grow SSS in the mid
single digits in more normal times.

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STAPLES – STORES BY GEOGRAPHY, 2004-2011

Source: Company disclosure regarding historical store openings.


STAPLES – CALCULATION OF FREE CASH FLOW ($ in thousands)


Source: Company reconciliation of net cash provided by operating activities to free cash flow.
FCF has trended higher since 2007, albeit unevenly
Germany is a big market that might be
able to handle materially more stores.

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Take-Two Interactive (TTWO) – Glenview ^, Icahn ¯
Technology: Software & Programming, Member of S&P SmallCap 600 NEW YORK NY, 646-536-2842 www.take2games.com
Trading Data Consensus EPS Estimates Valuation
Price: $15.57 (as of 2/24/12) Month # of P/E FYE 4/1/11 26x
52-week range: $10.63–$17.58 Latest Ago Ests P/E FYE 3/31/12 n/m
Market value: $1.4 billion This quarter -$0.55 -$0.07 16 P/E FYE 3/31/13 6x
Enterprise value: $1.3 billion Next quarter 0.33 0.73 8 P/E FYE 3/31/14 14x
Shares outstanding: 89.6 million FYE 3/31/12 -0.64 -0.23 15 EV/ LTM revenue 1.5x
Ownership Data FYE 3/31/13 2.81 2.73 15 EV/ LTM EBIT n/m
Insider ownership: <1% FYE 3/31/14 1.14 1.05 5 P / tangible book 5.0x
Insider buys (last six months): 7 LT growth 13.8% 15.6% 6 Greenblatt Criteria
Insider sales (last six months): 4 EPS Surprise Actual Estimate LTM EBIT yield -3%
Institutional ownership: n/a 2/2/12 $0.27 $0.23 LTM pre-tax ROC -33%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended October 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 860 761 696 1,231 701 359 1,137 860 334 236
Gross profit 384 188 220 521 234 137 448 328 146 110
Adjusted operating income 30 -168 -110 116 -120 -11 77 -43 49 20
Adjusted pretax income 36 -164 -111 112 -126 -22 64 -60 45 14
Adjusted net income 32 -166 -121 96 -130 -27 51 -73 38 13
Adjusted diluted EPS 0.45 -2.34 -1.68 1.28 -1.70 -0.34 0.59 -0.85 0.47 0.16
Shares out (avg) 71 71 72 75 77 78 86 85 81 84
Cash from operations 40 43 -64 151 -210 7 135 -75 90 -44
Capex 91 25 26 20 17 4 10 9 3 3
Free cash flow -51 18 -90 132 -227 3 125 -84 87 -48
… % of revenue:
Gross profit 44.6% 24.7% 31.6% 42.4% 33.3% 38.1% 39.4% 38.1% 43.6% 46.5%
R&D 8.6% 8.4% 7.0% 5.2% 9.1% 7.0% 6.1% 7.7% 5.4% 7.1%
Adjusted operating income 3.5% -22.0% -15.9% 9.4% -17.1% -3.1% 6.8% -5.0% 14.6% 8.5%
D&A 2.0% 2.6% 3.0% 1.7% 2.5% 1.8% 1.3% 1.9% 1.0% 1.2%
Capex 10.6% 3.3% 3.7% 1.6% 2.4% 1.1% 0.9% 1.1% 0.8% 1.4%
Cash, investments 107 133 78 280 102 146 280 453 297 453
Receivables 238 204 145 140 190 83 93 59 92 59
Inventory 136 96 99 39 27 25 25 23 29 23
PP&E, net 49 48 45 31 27 24 20 19 21 19
Tangible assets 675 607 561 779 688 461 590 778 644 778
Debt 0 0 18 70 97 100 107 312 105 312
Tangible equity 425 288 201 311 226 142 234 279 287 279
TBV / tangible assets 63% 48% 36% 40% 33% 31% 40% 36% 45% 36%
TBV per share 6.02 4.06 2.79 4.14 2.94 1.81 2.72 3.34 3.55 3.34
EBIT/capital employed 10% -73% -73% 84% -78% -7% 91% -33% >100% 67%

Ten-Year Stock Price Performance and Trading Volume Dynamics



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BUSINESS OVERVIEW
Take-Two develops and publishes games for video consoles.

INVESTMENT HIGHLIGHTS
• Proprietary game franchises include Grand Theft
Auto (sold 117+ million units), Red Dead, BioShock,
Max Payne, Manhunt, Midnight Club, Mafia, Top
Spin, Civilization, Railroads, and Pirates. Licensed
brands include the 2K series for MLB, NBA and NHL.
• “Fiscal 2013 is expected to be one of our best
years ever, with substantial revenue growth and
non-GAAP net income in excess of $2.00 per
diluted share” (P/E of <8x), based on “the strongest
development pipeline in the company’s history.”
• Upcoming release of Grand Theft Auto V. While
the franchise contributed only 12% to YTD revenue,
a release in FY13 could lead to a near doubling in y-
y revenue based on past releases and our estimates.
• M&A candidate? EV-to-three year average revenue
and gross profit is ~1.5x and ~4.0x, respectively.
The ratios may be much lower based on incremental
contribution from the release of Grand Theft Auto V.
• Icahn funds own 8% and may be pushing for
another sale attempt to Electronic Arts (ERTS),
after Take-Two rejected ERTS’ $26/share bid in ‘08.
• Chairman and CEO Strauss Zelnick (54) worked
with Icahn at Blockbuster, where Zelnick became
a director following the Icahn-led proxy fight in ‘05.
Zelnick-affiliated ZelnickMedia owns 2.0 million
vested options, exercisable at ~$15 per share.
• ~$450 million in cash, offset by ~$390 million of
convertible debt, as of yearend 2011.

INVESTMENT RISKS & CONCERNS
• Stand-alone strategy is not creating value. The
business has generated negative FCF over the last
five and ten years. It lacks the scale to absorb
required R&D, marketing and G&A costs.
• Dependence on challenged console industry may
deter potential acquirers. 85%+ of trailing
revenue is from console games, which are losing
share to online platforms and free “social games.”
• Hit-driven and cyclical business. While
management has tried to build out franchises such
as Grand Theft Auto and the sports series, revenue
and profits remain volatile and impossible to predict.
• Dilution from convertible debt and other dilutive
securities. There are two converts outstanding: 1)
$138 million of 4.375% notes due 2014; conversion
price: $10.68/share; and 2) $250 million of 1.75%
notes due 2016; conversion price: $19.09/share.
SELECTED OPERATING DATA
1

FYE October / March
2
2007 2008 2009 2010
2
2011
YTD
12/31/11
Revenue ($mn) 982 1,538 968 763 1,137 678
∆ revenue
3
-5% 57% -37% -21% 49% -29%
Selected items as % of revenue:
Gross profit 25% 36% 26% 35% 39% 39%
R&D 5% 4% 7% 8% 6% 7%
EBIT
4
-11% 8% -12% -10% 7% -3%
Net income
4
-14% 6% -14% -16% 4% -6%
Net cash from ops
4
-7% 10% -22% -18% 12% -8%
D&A
4
14% 11% 13% 17% 14% 19%
Capex
4
2% 1% 1% 1% 1% 1%
% of revenue by product platform:
Xbox 360 30% 40% 40% 46% 40% 44%
PlayStation 3 10% 34% 16% 21% 39% 38%
Wii 5% 9% 11% 8% 5% 2%
PlayStation/PS 2 26% 8% 7% 5% 2% 1%
PlayStation Portable 10% 5% 7% 6% 2% 2%
PC 14% 3% 11% 9% 9% 9%
Other 6% 2% 7% 5% 3% 3%
% of revenue by platform maker:
Sony 45% 46% 31% 32% 43% 42%
Microsoft 32% 40% 40% 46% 40% 44%
Nintendo 7% 11% 17% 12% 8% 4%
PC and other 16% 4% 12% 9% 10% 10%
Int’l – % of revenue
4
25% 35% 27% 33% 39% 42%
∆ shares out (avg) 1% 4% 2% 1% 3% 4%
1
Figures exclude the distribution business (sold in 2/10), unless stated otherwise.
2
2007-09 figures are based on fiscal years ending October 31 of each year.
2010-YTD figures are based on fiscal years ending March 31 of each year as a
result of the company’s change of fiscal year announced in October 2010. As a
result y-y changes for 2010 are not meaningful.

3
FY08 revenue growth reflects the April 2008 release of Grand Theft Auto IV.
FY11 revenue growth reflects the releases of Red Dead Redemption in May
2010 and Mafia II in August 2010 and a y-y increase in the NBA franchise.
4
FY2007-09 includes distribution business; EBIT excl. restructuring/impairment
charges; D&A includes amortization/impairment of software development costs
and licenses; Capex excludes expenditure on software development/licenses
as this is included in Net cash from operations.

CATALYSTS
• Upcoming release of Grand Theft Auto V
• Potential acquisition by Electronic Arts or another
trade buyer intent on capturing cost synergies

MAJOR HOLDERS
CEO Zelnick 3%
*
| Other insiders 1% | BlackRock 12%
Icahn-controlled funds 8% | Glenview 6% | Oppenheimer 5%
*
Includes shares/options held by ZelnickMedia, where Zelnick is a partner.

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
Despite Take-Two’s stand-alone strategy not creating value for shareholders, its proven game franchises such as Grand Theft
Auto could be valuable to an acquirer. The opportunity to save R&D, marketing and G&A costs are significant relative to the
recent valuation. Carl Icahn’s involvement (including a board seat by son Brett) and a past bid by Electronic Arts, support the
M&A case. Even without it, the upcoming release of Grand Theft Auto V could lead to materially improved profitability and
a revaluation of the shares. Long-term shareholders, however, will want more evidence of sustainable cash generation.

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TAKE-TWO INTERACTIVE – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on median consensus EPS
estimate for the fiscal year ending March
30, 2014

Based on median consensus EPS
estimate for the fiscal year ending March
30, 2013





TTM net revenue: $860 million

Consensus FY14 EPS estimate: $1.14

Consensus FY13 EPS estimate: $2.81
multiplied by

multiplied by

minus
Assumed operating margin: 10.0%

Corresponding industry P/E: 14.7x (*)

Assumed haircut to FY13 consensus
equals

equals

EPS estimate: 5% * $2.81
Est. operating income: $86 million

Industry multiple-implied fair value:

equals
multiplied by

$1.5 billion ($17 per share)

Revised FY13 EPS estimate: $2.67
Assumed fair value multiple:

multiplied by

multiplied by
6.0x

Assumed TTWO multiple as a

Corresponding industry P/E: 16.7x (*)
equals

percentage of the industry multiple:

equals
Estimated fair enterprise value of

90%

Industry multiple-implied fair value:
Take-Two: $520 million

(13.2x fair value P/E multiple)

$4.0 billion ($45 per share)
plus

equals

multiplied by
Cash, ST investments: $450 million

Estimated fair value of the common

Assumed TTWO multiple as a
minus

equity of Take-Two:

percentage of the industry multiple:
Total debt: $310 million

$1.4 billion ($15 per share)

90%
equals

3% downside from the recent

(15.0x fair value P/E multiple)
Estimated fair value of the common

stock price ($16 per share)

equals
equity of Take-Two:

Estimated fair value of the common
$660 million, or $7.30 per share

equity of Take-Two:
(based on 90 million shares out)

$3.6 billion ($40 per share)
53% downside from the recent

(based on 90 million shares out)
stock price ($16 per share)

158% upside to the recent
(*) Represents Software & Programming industry median multiple.

stock price ($16 per share)
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


TAKE-TWO INTERACTIVE – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance
(Click to visit ∆ to Reach Tang. EPS Yield LTM Rev./ ∆ Rev. % TTM Rev.
relevant websites) 7-Year
MV EV
Book/
This Next Rev./ Empl. Last Gross Adj.
Low High ($mn) ($mn) MV TTM FY FY EV ($000) TTM Q Profit R&D EBIT
Activision Blizzard / ATVI -58% 59% 13,862 10,337 20% 8% 8% 9% 46% 626 -41% -1% 63% 14% 29%
Electronic Arts / EA -17% 320% 5,610 4,353 3% neg. 5% 7% 89% 499 11% 1% 60% 32% -4%
GigaMedia / GIGM -48% 1653% 82 43 181% neg. n/a n/a 83% 69 -63% 0% 50% 5% -51%
Gravity / GRVY -87% 397% 77 21 59% 9% n/a n/a 254% 140 20% 8% 58% 8% 15%
Konami / KNM -54% 55% 3,984 3,675 47% 7% 5% 8% 89% 567 -3% -2% 34% n/a 14%
KongZhong / KONG -53% 227% 186 32 92% neg. 9% 10% 484% 149 7% 9% 41% 10% 9%
Majesco / COOL -86% 541% 106 92 22% 7% 14% 14% 136% 1,474 66% 7% 36% 6% 10%
NetEase.com / NTES -81% 10% 6,533 4,484 32% 8% 9% 10% 26% 220 32% 28% 67% 6% 46%
Perfect World / PWRD -32% 307% 571 342 81% 21% 23% 24% 130% 107 16% 22% 84% 22% 33%
SINA Corp. / SINA -71% 140% 4,045 3,306 25% neg. 2% 2% 14% 128 18% 20% 56% 12% 12%
Sohu.com / SOHU -70% 124% 1,863 1,033 45% 8% 8% 10% 82% 165 15% 42% 72% 13% 33%

Median 45% 7% 8% 9% 89% 165 15% 8% 58% 10% 14%

Take-Two / TTWO -64% 90% 1,395 1,253 20% -5% neg. 18% 69% 406 -44% -29% 38% 8% -5%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.

It is difficult to value a hit-driven business
using traditional valuation metrics.
Take-Two is one of the cheapest gaming
companies based on next year’s earnings yield.

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TAKE-TWO INTERACTIVE – FIVE-YEAR OPERATING INCOME SNAPSHOT

Source: Company fiscal 2011 annual report.


TAKE-TWO INTERACTIVE – GAME RELEASES SINCE OCTOBER 2011
Label

Title

Platforms

Release Date
2K Sports

NBA 2K12

Xbox 360, PS3, PS2, PSP, Wii, PC, iOS

October 4, 2011
Rockstar Games

Red Dead Redemption: Game of the Year Edition

Xbox 360, PS3

October 11, 2011*
2K Games

Duke Nukem Forever: Hail to the Icons Parody Pack (DLC)

Xbox 360, PS3, PC

October 11, 2011
2K Play

Dora and Kai-Lan’s Pet Shelter

DS

November 1, 2011
2K Play

Team Umizoomi

DS

November 1, 2011
2K Play

Let’s Cheer!

Kinect for Xbox 360

November 7, 2011
Rockstar Games

L.A. Noire: The Complete Edition

PC

November 8, 2011*
2K Play

Nickelodeon Dance

Kinect for Xbox 360, Wii

November 8, 2011
Rockstar Games

L.A. Noire: The Complete Edition

Xbox 360, PS3

November 15, 2011*
2K Play

Carnival Games: Wild West 3D

3DS

November 21, 2011
2K Sports

NBA 2K12 Legends Showcase (DLC)

Xbox 360, PS3

November 29, 2011
2K Games

Duke Nukem Forever: The Doctor Who Cloned Me (DLC)

Xbox 360, PS3, PC

December 13, 2011
Rockstar Games

Grand Theft Auto III - 10
th
Anniversary Edition

iOS, Android

December 15, 2011

Label

Title

Platforms

Release Date
2K Games

The Darkness II

Xbox 360, PS3, PC

February 7, 2012*
2K Sports

Major League Baseball 2K12

Xbox 360, PS3, PS2, PSP, Wii, DS, PC

March 6, 2012
2K Play

Nicktoons MLB

3DS

March 6, 2012
Rockstar Games

Max Payne 3

Xbox 360, PS3

May 15, 2012*
Rockstar Games

Max Payne 3

PC

May 29, 2012*
2K Games

Spec Ops: The Line

Xbox 360, PS3, PC

First Half Fiscal ‘13
2K Games

XCOM: Enemy Unknown

Xbox 360, PS3, PC

Fall 2012
2K Games

BioShock Infinite

Xbox 360, PS3, PC

Calendar Year 2012
2K Games

Borderlands 2

Xbox 360, PS3, PC

Fiscal Year 2013
2K Games

XCOM

Xbox 360, PS3, PC

Fiscal Year 2013
Rockstar Games

Grand Theft Auto V

TBA

TBA
* North American release date; international release typically follows three days after.
Source: Company news release dated February 2, 2012.


TAKE-TWO INTERACTIVE – KEY GAME FRANCHISES
The Grand Theft Auto Franchise:

Source: Company presentation dated December 2011.
Key Rockstar Franchises:

Performance has been
lackluster over the past
five years.
It is difficult to evaluate the
strength of the company’s
pipeline. Grand Theft Auto V
would likely be a major sales
driver, but the release date is
uncertain.

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TripAdvisor (TRIP) – Pennant ^^, Scout ^^
Services: Recreational Activities, Member of S&P 500 NEWTON MA, 617-670-6300 www.tripadvisor.com
Trading Data Consensus EPS Estimates Valuation
Price: $31.80 (as of 2/24/12) Month # of P/E FYE 1/1/12 24x
52-week range: $23.99–$35.93 Latest Ago Ests P/E FYE 12/31/12 23x
Market value: $4.2 billion This quarter $0.34 $0.35 13 P/E FYE 12/31/13 19x
Enterprise value: $4.5 billion Next quarter 0.38 0.39 13 P/E FYE 12/31/14 16x
Shares outstanding: 133.5 million FYE 12/31/12 1.37 1.41 15 EV/ LTM revenue 7.0x
Ownership Data FYE 12/31/13 1.66 1.69 14 EV/ LTM EBIT 16x
Insider ownership: <1% FYE 12/31/14 1.93 1.93 8 P / tangible book n/m
Insider buys (last six months): 1 LT growth 14.3% 16.3% 7 Greenblatt Criteria
Insider sales (last six months): 1 EPS Surprise Actual Estimate LTM EBIT yield 6%
Institutional ownership: 72% 2/8/12 $0.23 $0.24 LTM pre-tax ROC >100%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE
per share data) 2010 2011 12/31/11 12/31/11
Revenue 485 637 637 138
Gross profit 469 617 617 132
R&D 0 0 0 0
Adjusted operating income 226 280 280 37
Adjusted pretax income 224 279 279 37
Adjusted net income 139 185 185 26
Adjusted diluted EPS 1.04 1.38 1.38 0.19
Dividend 0.00 0.00 0.00 0.00
Shares out (avg) 133 133 133 133
Cash from operations 197 218 26 26
… % of revenue:
Gross profit 96.9% 96.8% 96.8% 95.6%
Adjusted operating income 46.7% 43.9% 43.9% 27.1%
D&A 14.6% 13.1% 13.1% 16.8%
Cash, investments 113 184 184 184
Receivables 51 82 82 82
PP&E, net 31 35 35 35
Total assets 723 836 836 836
Tangible assets 212 325 325 325
Payables 26 12 12 12
Short-term debt 2 47 47 47
Long-term debt 0 380 380 380
Total liabilities 183 542 542 542
Tangible equity 29 -217 -217 -217
TBV / tangible assets 14% -67% -67% -67%
TBV per share 0.22 -1.63 -1.63 -1.63

Ten-Year Stock Price Performance and Trading Volume Dynamics

$0
$5
$10
$15
$20
$25
$30
$35
$40
Feb 12

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BUSINESS OVERVIEW
TripAdvisor is a website that assists in trip planning with
user-generated reviews of hotels and other properties.

TRAVEL WEBSITES (monthly unique visitors – branded websites) (‘000)

Source: ComScore, September 2011.

INVESTMENT HIGHLIGHTS
• Spun off from Expedia in December, creating
standalone online travel research platform, which
aggregates reviews and opinions of members about
destinations, accommodations, restaurants, etc.

INVESTMENT RISKS & CONCERNS
• Guidance implies roughly flat EBITDA in 2012
due to “investments.” The slowdown in profit
growth may also indicate that the model is less
scalable than it has been in the past due to higher
marketing costs and changed Expedia relationship.
Management admitted that “revenue headwinds” are
“more significant than originally thought.”
• Dynamic, competitive landscape. TripAdvisor
faces threats from online travel firms Hotels.com,
Priceline, Travelzoo, Airbnb, and Foursquare; as
well as Google Places, Facebook and Twitter.
• TripAdvisor has been PC-focused, but travel
content is moving increasingly to mobile devices.
This presents an entry opportunity for competitors.

MAJOR HOLDERS
Shares outstanding: 120.7 million shares of common stock
and 12.8 million shares of Class B common stock. Liberty
Interactive owns 25% of common shares 100% of Class B
common shares, giving it combined voting power 60%.
Economic interest: CEO <1% | Liberty Interactive 36% |
Barry Diller 5% | Capital World 6% | Pennant 4% | Davis 3%
SELECTED OPERATING DATA
FYE December 31 2008 2009 2010 2011
Revenue ($mn) 298 352 485 637
% of revenue by product:

Click-based advertising 87% 86% 79% 78%
Display-based advertising 13% 14% 15% 13%
Subscription and other 0% 0% 6% 8%
Revenue by geography:

U.S. 82% 70% 61% 55%
UK 8% 12% 14% 16%
Other countries 10% 18% 24% 30%
Reconciliation of adjusted EBITDA and OIBA to GAAP net income:

Adjusted EBITDA
1
147 197 261 323
Depreciation
2
5 9 13 18
OIBA
3
142 188 248 305
Amortization of intangible assets 11 14 15 8
Stock-based compensation 6 6 7 17
Spin-off costs - - - 7
GAAP Operating Income 125 168 226 273
Related-party interest income, net 4 1 0 0
Other, net 2 1 2 1
Income before income taxes 119 167 224 272
Provision for income taxes 47 64 85 94
GAAP net income 72 102 139 178
Cash from operations 111 126 197 218
Capital expenditures 18 14 19 21
Selected items as a percentage of revenue:
Adjusted EBITDA
1
49% 56% 54% 51%
OIBA
3
47% 53% 51% 48%
GAAP operating income 42% 48% 47% 43%
GAAP net income 24% 29% 29% 28%
Depreciation
2
2% 3% 3% 3%
Capital expenditures 6% 4% 4% 3%
1
Adjusted EBITDA is defined as EBIT plus: (1) depreciation of property and
equipment, including internal use software and website development; (2)
amortization of intangible assets; (3) stock comp; and (4) non-recurring
expenses incurred to effect the spin-off in the year ended December 31, 2011.
2
Includes internal use software and website development.
3
OIBA is defined as EBIT plus: (1) amortization of intangible assets and any
related impairment; (2) stock comp expense; and (3) non-recurring expenses
incurred to effect the spin-off in the year ended December 31, 2011.

POST-SPIN BUSINESS PROFILE (annual basis)

Source: Company presentation dated November 2011.

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
TripAdvisor checks many boxes for quality-minded investors. It benefits from strong network effects due to the virtuous
circle of the number of reviews and unique visitors. It is a non capital-intensive business with multiple monetization options
and international growth opportunities. Finally, it is a recent spinoff that has yet to find a core long-term shareholder base
(though it does have a strong holder in Liberty Interactive, which owns 36% of the economics). Despite these positives, we
worry that TripAdvisor’s best days may be behind it, as the model appears to have become less scalable due to competition.


Management
appeared to
backtrack on this
adjusted EBITDA
target on the Q4
earnings call.
TripAdvisor if the world’s
largest travel website, with
50+ million unique monthly
visitors and 60+ million
reviews and opinions.
The sites operate in 30
countries worldwide,
including China under
daodao.com.

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TRIPADVISOR – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2014





TTM net revenue: $640 million

Consensus FY13 EPS estimate: $1.66

Consensus FY14 EPS estimate: $1.93
multiplied by

minus

multiplied by
Assumed operating margin: 30.0%

Assumed haircut to FY13 consensus

Corresponding industry P/E: 13.7x (*)
equals

EPS estimate: 5% * $1.66

equals
Est. operating income: $191 million

equals

Industry multiple-implied fair value:
multiplied by

Revised FY13 EPS estimate: $1.58

$3.5 billion ($26 per share)
Assumed fair value multiple:

multiplied by

multiplied by
8.0x

Corresponding industry P/E: 14.1x (*)

Assumed TRIP multiple as a
equals

equals

percentage of the industry multiple:
Estimated fair enterprise value of

Industry multiple-implied fair value:

150%
TripAdvisor: $1.5 billion

$3.0 billion ($22 per share)

(20.6x fair value P/E multiple)
plus

multiplied by

equals
Cash, ST investments: $184 million

Assumed TRIP multiple as a

Estimated fair value of the common
minus

percentage of the industry multiple:

equity of TripAdvisor:
Total debt: $430 million

125%

$5.3 billion ($40 per share)
equals

(17.6x fair value P/E multiple)

25% upside to the recent
Estimated fair value of the common

equals

stock price ($32 per share)
equity of TripAdvisor:

Estimated fair value of the common

(*) Represents Recreational Activities industry
median multiple.
Source: Company filings, The Manual of Ideas
analysis, assumptions and estimates.

$1.3 billion, or $9.60 per share

equity of TripAdvisor:

(based on 134 million shares out)

$3.7 billion ($28 per share)

70% downside from the recent

(based on 134 million shares out)

stock price ($32 per share)

13% downside from the recent



stock price ($32 per share)



TRIPADVISOR – ANALYSIS OF SELECTED COMPARABLE COMPANIES

Trading Data Public Market Valuation Operating Performance Tang.
(Click to visit ∆ to Reach Tang. TTM EPS Yield LTM Rev./ % TTM Rev. Equity/
relevant websites) 7-Year MV EV Book/ FCF This Next Rev./ Empl. Gross Adj. Tang.
Low High ($mn) ($mn) MV Yield TTM FY FY EV ($000) Profit R&D EBIT Assets
HomeAway / AWAY -22% 81% 2,038 1,854 4% 3% neg. 2% 3% 12% 254 85% 14% 10% 32%
Expedia / EXPE -83% 5% 4,406 4,318 n/m 17% 7% 8% 10% 80% 364 78% 11% 14% -49%
Orbitz Worldwide / OWW -68% 334% 359 695 n/m 21% neg. 7% 10% 110% 548 82% 0% 7% -155%
priceline.com / PCLN -97% 1% 29,393 27,563 6% 4% 3% 4% 5% 15% 1,205 69% 0% 31% 54%
TripAdvisor / TRIP -25% 13% 4,246 4,489 n/m 1% 4% 4% 5% 14% n/m 97% 0% 44% -67%
Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl. = employee | Rev. = revenue | ∆ = change
Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items
Source: Company and market data, The Manual of Ideas analysis.


TRIPADVISOR – REVENUE DIVERSIFICATION TREND

Source: Company presentation dated November 2011.

View Expedia’s S-4 spin-off filing for TripAdvisor.
TripAdvisor’s revenue
distribution has exhibited a
typical maturation pattern, but
the company remains heavily
dependent on cost-per-click
advertising (this is not
necessarily a negative, as CPC
ads are highly profitable).
In order to drive major
incremental growth, however,
the company will likely need to
find ways to grow subscription
and other revenues.

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TRIPADVISOR – SELECTED INCOME STATEMENT DATA AND ANALYSIS, 2008-2011

(1)
General and administrative includes related-party shared services fee previously reported as a separate line item on Form S-4 filed on November 1, 2011.
(2)
Management’s primary operating metric prior to the spin-off for evaluating operating performance was Operating Income Before Amortization (“OIBA”), as
reported on Form S-4 filed on November 1, 2011. OIBA is defined as operating income plus: (1) amortization of intangible assets and any related impairment; (2)
stock-based compensation expense; and (3) non-recurring expenses incurred to effect the Spin-Off during the year ended December 31, 2011. This operating
metric is no longer being used by management to measure operating performance and is only being shown above to illustrate the financial impact as the company
converts to a new operating metric post spin-off.
(3)
Adjusted EBITDA is defined as operating income plus: (1) depreciation of property and equipment, including internal use software and website development; (2)
amortization of intangible assets; (3) stock-based compensation; and (4) non-recurring expenses incurred to effect the spin-off during the year 2011.
(4)
Includes internal-use software and website development.
Source: Company supplemental financial data.
(i n thousands) FY 2008 FY 2009 Q1 Q2 Q3 Q4 FY 2010 Q1 Q2 Q3 Q4 FY 2011
Rev enue 200,578 $ 212,375 $ 71,501 $ 82,422 $ 89,761 $ 69,841 $ 313,525 $ 95,278 $ 110,043 $ 120,384 $ 100,340 $ 426,045 $
Related-party rev enue from Ex pedia 97,668 139,714 42,081 42,987 49,558 36,484 171,110 53,944 59,199 60,417 37,458 211,018
Total Rev enue 298,246 352,089 113,582 125,409 139,319 106,325 484,635 149,222 169,242 180,801 137,798 637,063
y-y growth 18% 33% 39% 44% 35% 38% 31% 35% 30% 30% 31%
GAAP Cost of Rev enue 2,414 4,569 1,547 1,735 2,056 2,007 7,345 2,231 2,735 3,227 2,680 10,873
% of total revenue 1% 1% 1% 1% 1% 2% 2% 1% 2% 2% 2% 2%
GAAP Selling and marketing 98,291 105,679 30,921 31,392 42,446 35,711 140,470 44,195 52,685 60,349 51,947 209,176
Stock based compensation 1,669 1,885 655 434 506 506 2,101 805 589 568 1,254 3,216
Non-GAAP Selling and marketing 96,622 103,794 30,266 30,958 41,940 35,205 138,369 43,390 52,096 59,781 50,693 205,960
% of total revenue 32% 29% 27% 25% 30% 33% 29% 29% 31% 33% 37% 32%
GAAP Technology and content 26,047 29,331 9,438 10,569 10,803 12,511 43,321 13,089 13,379 14,748 16,232 57,448
Stock based compensation 2,784 2,276 777 601 641 642 2,661 888 639 750 1,655 3,931
Non-GAAP Technology and content 23,263 27,055 8,661 9,968 10,162 11,869 40,660 12,201 12,740 13,998 14,577 53,517
% of total revenue 8% 8% 8% 8% 7% 11% 8% 8% 8% 8% 11% 8%
GAAP General and adminstrativ e 22,108 14,286 4,277 8,208 9,437 9,897 31,819 8,194 7,944 9,194 19,438 44,770
Related-party shared serv ices (1) 8,320 6,910 1,975 1,975 1,975 1,975 7,900 1,980 1,980 1,980 3,282 9,222
Stock based compensation 1,107 1,744 735 519 583 584 2,421 781 740 719 7,957 10,197
Non-GAAP General and adminstrativ e 29,321 19,452 5,517 9,664 10,829 11,288 37,298 9,393 9,184 10,455 14,763 43,795
% of total revenue 10% 6% 5% 8% 8% 11% 8% 6% 5% 6% 11% 7%
Depreciation 5,022 9,330 2,589 3,089 3,425 3,768 12,871 4,102 4,514 4,630 5,116 18,362
% of total revenue 2% 3% 2% 2% 2% 4% 3% 3% 3% 3% 4% 3%
Amortization of Intangibles 11,161 13,806 3,378 2,864 2,577 5,790 14,609 2,117 1,132 2,394 1,880 7,523
% of total revenue 4% 4% 3% 2% 2% 5% 3% 1% 1% 1% 1% 1%
Other operating ex pense (Spin-off costs) - - - - - - - - 1,054 2,211 3,667 6,932
Total costs and ex penses 173,363 183,911 54,125 59,832 72,719 71,659 258,335 75,908 85,423 98,733 104,242 364,306
GAAP Operating income 124,883 168,178 59,457 65,577 66,600 34,666 226,300 73,314 83,819 82,068 33,556 272,757
Other income (ex pense):
Related-party and other interest, net (4,035) (978) (78) (70) (56) (37) (241) 98 217 212 (136) 391
Other, net (1,738) (660) (1,315) (1,359) 1,634 (604) (1,644) 965 457 (2,802) 126 (1,254)
Total other income (ex pense), net (5,773) (1,638) (1,393) (1,429) 1,578 (641) (1,885) 1,063 674 (2,590) (10) (863)
Income before income tax es 119,110 166,540 58,064 64,148 68,178 34,025 224,415 74,377 84,493 79,478 33,546 271,894
Prov ision for income tax es 46,788 64,325 20,650 24,073 25,239 15,499 85,461 27,006 30,383 25,185 11,529 94,103
GAAP Net income 72,322 102,215 37,414 40,075 42,939 18,526 138,954 47,371 54,110 54,293 22,017 177,791
GAAP Net (income) of minority interest 49 212 (41) (13) (27) (97) (178) (93) (46) 21 4 (114)
GAAP Net income of TripAdv isor, Inc 72,371 102,427 37,373 40,062 42,912 18,429 138,776 47,278 54,064 54,314 22,021 177,677
OIBA (2) 141,604 187,889 65,002 69,995 70,907 42,188 248,092 77,905 87,973 88,709 49,969 304,556
Adjusted EBITDA (3) 146,626 197,219 67,591 73,084 74,332 45,956 260,963 82,007 92,487 93,339 55,085 322,918
% of total revenue 49% 56% 60% 58% 53% 43% 54% 55% 55% 52% 40% 51%
y-y growth 35% 32% 21% 27% 26% 20% 24%
Cash flow from operations 110,726 125,738 46,566 44,232 57,395 48,722 196,915 53,316 60,555 77,850 26,161 217,882
Capital Ex penditures (4) 17,871 13,873 4,053 5,532 4,398 4,830 18,813 4,993 5,431 5,604 5,295 21,323
2010 2011
TripAdvisor has achieved impressive adjusted EBITDA margins, but those are likely
to decline going forward. That said, the model should remain highly profitable.

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Virgin Media (VMED) – Edinburgh ^^
Services: Broadcasting & Cable TV

NEW YORK NY, 441-675-3762 www.virginmedia.com
Trading Data Consensus EPS Estimates Valuation
Price: $25.10 (as of 2/24/12) Month # of P/E FYE 1/1/12 66x
52-week range: $20.52–$33.32 Latest Ago Ests P/E FYE 12/31/12 14x
Market value: $7.0 billion This quarter £0.09 n/a 3 P/E FYE 12/31/13 10x
Enterprise value: $15.7 billion Next quarter £0.17 n/a 3 P/E FYE 12/31/14 n/a
Shares outstanding: 279.0 million FYE 12/31/12 £1.10 n/a 15 EV/ LTM revenue 2.5x
Ownership Data FYE 12/31/13 £1.66 n/a 12 EV/ LTM EBIT 20x
Insider ownership: <1% FYE 12/31/14 n/a n/a n/a P / tangible book n/m
Insider buys (last six months): 6 LT growth n/a n/a n/a Greenblatt Criteria
Insider sales (last six months): 8 EPS Surprise Actual Estimate LTM EBIT yield 5%
Institutional ownership: n/a 2/8/12 £0.16 £0.10 LTM pre-tax ROC 13%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 3,051 5,643 6,014 5,726 5,740 6,072 6,254 6,341 1,573 1,604
Gross profit 1,785 3,179 3,425 3,306 3,345 3,605 3,738 3,738 933 973
Adjusted operating income -31 15 90 193 277 587 860 870 176 262
Adjusted pretax income -345 -766 -656 -689 -397 -267 233 235 -20 75
Adjusted net income -376 -746 -659 -678 -393 -72 208 208 120 77
Adjusted diluted EPS -1.76 -2.55 -2.02 -2.07 -1.19 -0.22 0.67 0.68 0.37 0.26
Dividend 0.00 0.08 0.20 0.25 0.25 0.25 0.25 0.25 0.06 0.06
Shares out (avg) 214 293 326 328 329 327 310 306 322 294
Cash from operations 391 1,232 1,122 1,184 1,399 1,578 1,784 1,784 428 461
Capex 451 869 836 746 890 985 1,029 1,029 236 278
Free cash flow -61 362 286 438 509 594 755 755 192 183
… % of revenue:
Gross profit 58.5% 56.3% 57.0% 57.7% 58.3% 59.4% 59.8% 58.9% 59.3% 60.6%
Adjusted operating income -1.0% 0.3% 1.5% 3.4% 4.8% 9.7% 13.7% 13.7% 11.2% 16.3%
D&A 33.4% 29.0% 31.9% 32.4% 32.0% 29.3% 26.1% 25.7% 29.0% 25.1%
Capex 14.8% 15.4% 13.9% 13.0% 15.5% 16.2% 16.5% 16.2% 15.0% 17.3%
Cash, investments 1,304 656 504 285 674 751 471 471 751 471
Receivables 301 723 714 712 632 676 682 682 676 682
PP&E, net 5,162 9,441 8,860 8,369 7,905 7,462 7,211 7,211 7,462 7,211
Tangible assets 7,424 12,149 11,448 11,500 10,820 10,492 9,277 9,277 10,492 9,277
Short-term debt 1 222 46 63 65 348 120 120 348 120
Long-term debt 3,571 9,427 9,289 9,603 9,296 9,084 9,053 9,053 9,084 9,053
Tangible equity 2,671 -405 -546 -903 -1,241 -1,365 -2,160 -2,160 -1,365 -2,160
TBV / tangible assets 36% -3% -5% -8% -11% -13% -23% -23% -13% -23%
TBV per share 12.50 -1.38 -1.67 -2.75 -3.78 -4.18 -6.97 -7.34 -4.24 -7.34
EBIT/capital employed -1% -1% 1% -6% 2% 6% 12% 13% 7% 18%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Virgin Media is a U.K. communications services provider.
Consumer segment (84% of 2011 revenue): includes TV over
Virgin Media’s cable network and broadband and fixed line
telephone services to residential consumers. The segment
also includes mobile telephony and mobile broadband
operations, provided over third-party mobile networks
Business segment (16%): includes voice, data and Internet
services provided over own and third-party cable networks.

INVESTMENT HIGHLIGHTS
• Leading “quad-play” provider of Internet, TV,
mobile and fixed-line telephony in U.K. Virgin
Media’s deep fiber network offers faster broadband
services than do DSL competitors. The company
provides one of the most advanced TV on-demand
services in the U.K. Virgin Media has 4.8 million
residential cable customers and is also one of the
U.K.’s largest mobile virtual network operators,
providing mobile services to 1.5 million prepaid
customers and 1.5 million contract customers.
• Opportunity to grow business-related services,
which accounted for only 16% of revenue in 2011.
• Rollout of TiVo and “superfast” broadband to
drive growth. Since Virgin’s launch of TiVo in
mid-2011, TiVo subscribers have grown to almost
half a million, doubling in 4Q11. Half of Virgin’s
new customers are choosing “superfast” speeds.
• Repurchased 41 million shares for £635 million
while FCF grew 21% to £498 million in 2011.
Virgin should spend £1.25 billion on buybacks from
mid-2010 to yearend 2012, likely reducing share
count by 25%. The company expects to achieve a
net debt-to-OCF target of 3.0x by mid-2013.

INVESTMENT RISKS & CONCERNS
• Grew revenue only 3% in 2011, with net income
of £76 million. The fact that this was the first time
the company reported positive net income suggests
that Virgin’s long-term financial model is unproven.
• Net debt of £5.5 billion (cash of £300 million). If
margins erode or subscriber growth stalls, Virgin
could quickly become a distressed equity.
• Capex of 15-17% of revenue in the foreseeable
future, even after excluding a £110 million
broadband speed upgrade in 2012. In addition,
Virgin spends 2-3% of revenue on capital leases.
This makes EBITDA a highly misleading statistic.

POTENTIAL CATALYSTS
• Continued aggressive share repurchases
• Subscriber growth ignited by TiVo rollout
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 7% -5% 0% 6% 3%
∆ gross profit 8% -3% 1% 8% 4%
∆ assets -7% -5% -7% -4% -10%
∆ book value -13% -28% -26% -15% -49%
∆ BV per share -22% -29% -26% -15% -46%
Revenue ($mn) 6,047 5,757 5,771 6,105 6,288
% of revenue by major segment:

Consumer 83% 83% 84% 85% 84%
Business 17% 17% 16% 15% 16%
Contribution margin by major segment:

Consumer 58% 60% 60% 60% 59%
Business 53% 54% 58% 57% 59%
% of consumer segment revenue by customer type:

Cable 78% 79% 81% 81% 81%
Mobile 19% 19% 17% 17% 16%
% of business segment revenue by channel type:

Retail 71% 71% 74% 73% 73%
Wholesale 29% 29% 26% 27% 27%
Selected items as % of revenue:

Gross profit 57% 58% 58% 59% 60%
EBIT (GAAP) 1% -7% 2% 6% 12%
EBIT (adjusted)
1
1% 3% 5% 10% 14%
Pretax income (GAAP) -12% -23% -10% -8% 2%
Pretax income (adjusted)
1
-11% -12% -7% -4% 4%
Net income (GAAP) -12% -25% -10% -4% 2%
Net income (adjusted)
1,2
-11% -12% -7% -1% 3%
D&A 32% 32% 32% 29% 26%
Capex 14% 13% 16% 16% 16%
Industry gross margin
3
52% 48% 46% 44% 44%
Industry EBIT margin
3
12% 9% 1% 9% 16%
Tangible assets ($bn) 11.5 11.6 10.9 10.5 9.3
Selected items as % of tangible assets:

Cash, investments 4% 2% 6% 7% 5%
LT investments 5% 5% 5% 5% 0%
PP&E, net 77% 73% 73% 71% 78%
ST debt 0% 1% 1% 3% 1%
LT debt 81% 84% 86% 87% 98%
Tangible equity -5% -8% -11% -13% -23%
Diluted EPS (cont.) ($) -2.19 -3.97 -1.68 -0.81 0.38
Dividends per share ($) 0.20 0.25 0.25 0.25 0.25
Shares out (avg) (mn) 326 328 329 327 304
∆ shares out (avg) 11% 1% 0% -1% -7%
1
Adjusted for unusual items of -$50 million in 2007, -$621 million in 2008,
-$157 million in 2009, -$194 million in 2010, and -$88 million in 2011.
2
Adjusted for nonrecurring items of -$17 million in 2007, -$146 million in 2008,
-$12 million in 2009, $44 million in 2010, and -$1.9 million in 2011.
3
Broadcasting & Cable TV industry median.

MAJOR HOLDERS
Management 2% | Capital World 13% | Cap Re 11% |
RBC 7% | GS 5% | Manning 5% | Times Square 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
Virgin Media has built a strong consumer business delivering cable network-based communications services in the U.K.
While the company generates positive FCF and is aggressively buying back stock, we are wary of the significant capex needs
of the business. Management claims it is gaining an advantage by investing aggressively in a rollout of TiVo and “superfast”
broadband, this may be akin to “standing on tip-toes”—soon everyone may do it and no one may benefit (except consumers).
Virgin’s balance sheet leaves us uncomfortable as well. If the business has a hiccup, equity holders could suffer mightily.


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VIRGIN MEDIA – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on revenue for the quarter ended
December 31, 2011 (annualized)

Based on free cash flow for the twelve
months ended December 31, 2011





TTM net revenue: $6.3 billion

Revenue for latest Q: $1.6 billion

Operating cash flow: $1.8 billion
multiplied by

multiplied by four equals

minus
Assumed operating margin: 12.4%

Annualized revenue: $6.4 billion

Capex: $1.0 billion
equals

multiplied by

equals
Est. operating income: $780 million

Industry median enterprise value to

Free cash flow: $760 million
multiplied by

trailing revenue multiple: 1.1x (*)

divided by
Assumed fair value multiple:

multiplied by

Industry median FCF yield: 7.9% (*)
12.0x

Assumed fair value multiple as a portion

equals
equals

of the industry median multiple:

Industry FCF yield-implied fair value:
Estimated fair enterprise value of

200%

$10 billion ($34 per share)
Virgin Media: $9.4 billion

(2.2x fair value revenue multiple)

multiplied by
plus

equals

Assumed required FCF yield as a
Cash, ST investments: $470 million

Estimated fair enterprise value of

percentage of the industry FCF yield:
plus

Virgin Media: $14 billion

75%
Long-term investments at fair value

plus

(6.0% required FCF yield)
discount of 20%: $0.0 million

Cash, ST investments: $470 million

equals
minus

minus

Estimated fair value of the common
Total debt: $9.2 billion

Total debt, preferreds: $9.2 billion

equity of Virgin Media:
equals

equals

$13 billion, or $45 per share
Estimated fair value of the common

Estimated fair value of the common

(based on 279 million shares out)
equity of Virgin Media:

equity of Virgin Media:

81% upside to the recent
$700 million, or $2.50 per share

$5.4 billion, or $19 per share

stock price ($25 per share)
(based on 279 million shares out)

(based on 279 million shares out)

(*) Represents Broadcasting & Cable TV
industry median multiple.
Source: Company filings, The Manual of Ideas
analysis, assumptions and estimates.
90% downside from the recent

23% downside from the recent

stock price ($25 per share)

stock price ($25 per share)



VIRGIN MEDIA – CAPEX, CASH TO DEBTHOLDERS, AND CASH TO SHAREHOLDERS (£ in millions)

Source: Company presentation dated February 8, 2012.

Much of Virgin’s cash flow
has gone to debt holders.
Whether or not the company
can increase cash to
shareholders will be key to
creating incremental value.

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VIRGIN MEDIA – BREAKDOWN OF NET DEBT

1
The carrying value of the $500 million 5.25% senior secured notes due 2021 includes adjustments of £33.0 million, as a result of fair value hedge accounting.
2
The carrying value of the £650 million 5.50% senior secured notes due 2021 includes adjustments of £77.9 million, as a result of fair value hedge accounting.
Source: Company presentation dated February 8, 2012.


VIRGIN MEDIA – SHARE REPURCHASE CAPACITY

1
At closing share price on February 7, 2011, based on 332 million shares outstanding at June 2010 (commencement of program) and assuming full Board
buyback authority is used by end of 2012, with no new issues of stock awards or conversion of convertible debt.
2
FCF is OCF reduced by purchase of fixed and intangible assets and net interest expense.
3
At closing share price on February 7, 2011, assuming full Board buyback authority is used by end of 2012, with no new stock awards or conversion of debt.
Source: Company presentation dated February 8, 2012.
The carrying amount of much of Virgin’s debt is
materially below face value, likely reflecting market
prices. However, unless the company repurchases the
debt, it will have to pay it back at face value.
Are share repurchases too aggressive
in light of the large debt load?

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Xerox (XRX) – Centaur -, Glenview ^, Greenlight ^^, Olstein ^
Technology: Office Equipment, Member of S&P 500

NORWALK CT, 203-968-3000 www.xerox.com
Trading Data Consensus EPS Estimates Valuation
Price: $8.36 (as of 2/24/12) Month # of P/E FYE 1/1/12 9x
52-week range: $6.55–$11.03 Latest Ago Ests P/E FYE 12/31/12 7x
Market value: $11.1 billion This quarter $0.23 $0.23 10 P/E FYE 12/31/13 7x
Enterprise value: $19.2 billion Next quarter 0.26 0.27 9 P/E FYE 12/31/14 6x
Shares outstanding: 1,331.9 million FYE 12/31/12 1.12 1.15 12 EV/ LTM revenue 0.8x
Ownership Data FYE 12/31/13 1.23 1.29 11 EV/ LTM EBIT 11x
Insider ownership: <1% FYE 12/31/14 1.41 1.38 3 P / tangible book 359.2x
Insider buys (last six months): 13 LT growth 7.5% 7.5% 1 Greenblatt Criteria
Insider sales (last six months): 6 EPS Surprise Actual Estimate LTM EBIT yield 9%
Institutional ownership: 82% 1/25/12 $0.33 $0.33 LTM pre-tax ROC 41%

Operating Performance and Financial Position
($ millions, except Fiscal Years Ended December 31, LTME FQE FQE
per share data) 2005 2006 2007 2008 2009 2010 2011 12/31/11 12/31/10 12/31/11
Revenue 15,701 15,895 17,228 17,608 15,179 21,633 22,626 22,626 5,976 5,964
Gross profit 6,473 6,459 6,951 6,855 6,025 7,451 7,429 7,429 2,008 1,923
Adjusted operating income 1,311 1,297 1,456 1,131 700 1,422 1,491 1,773 467 397
Adjusted net income 1,356 1,670 1,123 1,440 558 1,192 1,197 1,241 455 319
Adjusted diluted EPS 1.42 1.77 1.20 1.63 0.64 0.90 0.86 0.90 0.33 0.23
Dividend 0.00 0.00 0.04 0.17 0.17 0.17 0.17 0.17 0.04 0.04
Shares out (avg) 957 944 935 885 870 1,323 1,388 1,381 1,393 1,361
Cash from operations 1,420 1,617 1,871 939 2,208 2,726 1,961 1,961 1,307 1,278
Capex 237 294 359 335 193 519 501 501 171 134
Free cash flow 1,183 1,323 1,512 604 2,015 2,207 1,460 1,460 1,136 1,144
… % of revenue:
Gross profit 41.2% 40.6% 40.3% 38.9% 39.7% 34.4% 32.8% 32.8% 33.6% 32.2%
R&D 6.0% 5.8% 5.3% 5.0% 5.5% 3.6% 3.2% 3.2% 3.2% 3.0%
Adjusted operating income 8.3% 8.2% 8.5% 6.4% 4.6% 6.6% 6.6% 7.8% 7.8% 6.7%
D&A 0.2% 0.3% 0.2% 0.3% 0.4% 1.4% 1.8% 1.8% 1.4% 2.3%
Capex 1.5% 1.8% 2.1% 1.9% 1.3% 2.4% 2.2% 2.2% 2.9% 2.2%
Cash, investments 1,566 1,536 1,099 1,229 3,799 1,211 902 902 1,211 902
Receivables 4,937 5,121 5,454 4,941 4,324 5,311 4,931 4,931 5,311 4,931
Inventory 1,201 1,163 1,305 1,232 900 991 1,021 1,021 991 1,021
LT investments 5,731 5,796 5,983 5,643 5,461 5,426 5,426 5,426 5,426 5,426
PP&E, net 2,058 2,008 2,174 2,013 1,860 2,201 4,261 2,145 2,201 2,145
Tangible assets 19,993 19,399 19,474 18,655 19,648 17,967 18,271 18,271 18,580 18,271
Short-term debt 1,139 1,485 525 1,610 988 1,370 1,545 1,545 1,370 1,545
Long-term debt 6,765 6,284 7,571 7,422 8,925 7,887 7,088 7,088 7,887 7,088
Tangible equity 4,359 4,770 4,519 2,446 2,666 -627 31 31 -14 31
EBIT/capital employed 14% 13% 24% -1% 13% 18% 28% 41% 16% 48%

Ten-Year Stock Price Performance and Trading Volume Dynamics

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BUSINESS OVERVIEW
Xerox is a document management and BPO company.

INVESTMENT HIGHLIGHTS
• Broad portfolio of business process and IT
outsourcing support, document technology and
solutions. Xerox’s offerings range from claims
reimbursement and electronic toll transactions to the
HR benefits management and customer care centers
to the operation of clients’ IT infrastructure.
• Big markets. Services: BPO, document outsourcing
and IT are $225 billion, $45 billion and $280 billion
markets growing at 7%, 6% and 4% from 2010-14,
respectively. Printing: workgroup devices and high-
end devices are $42 billion and $6 billion markets
growing at 1% (color 4%) and 5% (color 12%).
Xerox is a leader in color printing (~45% of sales).
• Expanded into business process outsourcing with
$6.5 billion buy of Affiliated Computer Services
(ACS) in February 2010. ACS had $6.6 billion of
revenue and employed 78,000 people pre-deal.
• Long-term revenue and EPS growth of 6% and
10-15% possible, according to management. EPS
growth should exceed revenue growth due to cost-
cutting at ACS, scale benefits, and share buybacks.
• Repurchased $700 million of stock in 2011, with
expected buybacks of ~$1 billion in 2012. FCF is
estimated at $1.5-1.8 billion ($500 million capex).
• Einhorn reinitiated stake in Q4: “The first time,
we… sold with a modest gain over concerns about
XRX’s Japanese exposure after the earthquake. That
issued appeared fully discounted… when we re-
established a position at $7.61 per share, which is
less than 8x estimated 2012 earnings.” (Q4 letter)

INVESTMENT RISKS & CONCERNS
• Stagnant top line, with management guiding for
revenue growth of 2% in 2012 (services up mid to
high single digits; technology flat to down low
single digits). Positively, adjusted EPS is expected
to increase from $1.08 in 2011 to $1.12-1.18 in ‘12.
• Competition from larger, well-managed firms. In
services, key competitors are Accenture, Aon,
Computer Sciences Corporation, Convergys, Dell,
Genpact, Hewlett-Packard, IBM, and Teletech. In
technology, key competitors include Canon, HP,
Kodak, Konica Minolta, Lexmark, and Ricoh.

POTENTIAL CATALYSTS
• Buyback of $900 million to $1.1 billion in 2012
• Pension funding requirements should ease into 2013
• Accretive tuck-in M&A ($300-400 million in 2012)
SELECTED OPERATING DATA
FYE December 31 2007 2008 2009 2010 2011
∆ revenue 8% 2% -14% 43% 5%
∆ gross profit 8% -1% -12% 24% 0%
∆ assets 8% -5% 7% 27% -2%
∆ book value 21% -27% 13% 70% -1%
∆ BV per share 23% -23% 15% 12% -6%
Employees (end) (‘000) 57 57 54 137 n/a
Revenue ($bn) 17.2 17.6 15.2 21.6 22.6
% of revenue by type:

Sales 48% 47% 44% 33% 32%
Service and outsourcing 48% 48% 51% 64% 66%
Finance 5% 5% 5% 3% 3%
Gross margin by type:

Sales 36% 34% 34% 35% 34%
Service and outsourcing 43% 42% 43% 33% 31%
Finance 62% 62% 62% 63% 63%
% of revenue by geography:

U.S. 53% 52% 54% 64% n/a
Europe 34% 34% 33% 25% n/a
Other areas 13% 14% 14% 12% n/a
Selected items as % of revenue:

Gross profit 40% 39% 40% 34% 33%
R&D 5% 5% 6% 4% 3%
EBIT 9% 0% 4% 4% 7%
Net income 7% 1% 3% 3% 6%
D&A 4% 4% 5% 5% 6%
Capex 2% 2% 1% 2% 2%
Tangible assets ($bn) 19.5 18.7 19.6 18.0 18.3
Selected items as % of tangible assets:

Cash, investments 6% 7% 19% 7% 5%
Receivables 28% 26% 22% 30% 27%
Inventory 7% 7% 5% 6% 6%
LT investments 31% 30% 28% 30% 30%
PP&E, net 11% 11% 9% 12% 23%
ST debt 3% 9% 5% 8% 8%
LT debt 39% 40% 45% 44% 39%
Preferred stock 0% 0% 0% 2% 2%
Tangible equity 23% 13% 14% -3% 0%
Return on equity (ROE) 14% 19% 8% 13% 10%
Trailing P/E (end) 14x 31x 15x 27x 9x
Forward P/E (end) 62x 14x 20x 13x 7x
Diluted EPS (cont.) ($) 1.19 0.26 0.55 0.43 0.90
Dividends per share ($) 0.04 0.17 0.17 0.17 0.17
BV per share (end) ($) 9 7 8 9 9
Share price (end) ($) 16 8 9 12 8
Volume (mn shares) 1,209 1,694 2,577 3,720 3,424
Shares out (avg) (mn) 935 885 870 1,323 1,388
∆ shares out (avg) -1% -5% -2% 52% 5%

MAJOR HOLDERS
CEO % | Other insiders % | Dodge & Cox 8% | Franklin 7% |
FMR 3% | Neuberger 2% | Glenview 2% | Greenlight 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
Xerox is one of the cheapest large IT services companies, trading at under 8x estimated EPS of $1.12 in 2012. The company
is also allocating capital in a shareholder-friendly way, using an expected ~$1 billion for repurchases this year. Xerox also
appears to have cost-cutting opportunities in the legacy ACS business, which was acquired for $6 billion in 2010. As a result,
EPS growth is likely to outpace low to mid single digit revenue growth over the next few years. We wish Xerox’s balance
sheet was stronger but acknowledge that buying back shares is a better use of capital than deleveraging the balance sheet.



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XEROX – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS
Conservative

Base Case

Aggressive
Valuation methodology:

Valuation methodology:

Valuation methodology:
Based on revenue for the twelve months
ended December 31, 2011, and
assumed normalized EBIT margin

Based on free cash flow for the twelve
months ended December 31, 2011

Based on median consensus EPS
estimate for the fiscal year ending
December 30, 2013





TTM net revenue: $23 billion

Operating cash flow: $2.0 billion

Consensus FY13 EPS estimate: $1.23
multiplied by

minus

minus
Assumed operating margin: 8.0%

Capex: $500 million

Assumed haircut to FY13 consensus
equals

equals

EPS estimate: 5% * $1.23
Est. operating income: $1.8 billion

Free cash flow: $1.5 billion

equals
multiplied by

divided by

Revised FY13 EPS estimate: $1.17
Assumed fair value multiple:

Industry median FCF yield: 7.1% (*)

multiplied by
5.0x

equals

Corresponding industry P/E: 13.0x (*)
equals

Industry FCF yield-implied fair value:

equals
Estimated fair enterprise value of

$20 billion ($15 per share)

Industry multiple-implied fair value:
Xerox: $9.0 billion

multiplied by

$20 billion ($15 per share)
plus

Assumed required FCF yield as a

multiplied by
Cash, ST investments: $900 million

percentage of the industry FCF yield:

Assumed XRX multiple as a
plus

125%

percentage of the industry multiple:
Finance receivables and long-term

(8.9% required FCF yield)

110%
investments at 20% discount: $4.3 billion

equals

(14.3x fair value P/E multiple)
minus

Estimated fair value of the common

equals
Total debt: $9.0 billion

equity of Xerox:

Estimated fair value of the common
equals

$16 billion, or $12 per share

equity of Xerox:
Estimated fair value of the common

(based on 1.3 billion shares out)

$22 billion ($17 per share)
equity of Xerox:

47% upside to the recent

(based on 1.3 billion shares out)
$5.3 billion, or $4.00 per share

stock price ($8.40 per share)

100% upside to the recent
(based on 1.3 billion shares out)

stock price ($8.40 per share)
53% downside from the recent

stock price ($8.40 per share)

(*) Represents Office Equipment industry median multiple.
Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.


XEROX – 2012 MANAGEMENT GUIDANCE


1
Includes anticipated restructuring charges.
Source: Company presentation dated January 25, 2012.

Repurchases and dividends
should return $1.2-$1.4 billion of
cash to shareholders in 2012.

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XEROX – SELECTED FINANCIAL DATA, 2010-2011


Source: Company financial model dated January 2012.
Employment has grown to nearly
140,000 people following the
ACS acquisition and reflecting
continued organic growth.

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Screening ~850 Holdings of 50+ Superinvestors
Top 100, by Market Value
Trading Data Public Market Valuation
Greenblatt’s
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM TTM
EPS Yield
Tang.
TTM EBIT/
relevant websites)
Price
7-Year Value Value
Rev./ GP/ FCF
This Next Div.
Book/
Cap.

($)
Low High
($bn) ($bn) EV EV Yield TTM FY FY Yield MV EV Empl.
Apple / AAPL 502.12 -94% 5% 468 438 29% 12% 8% 7% 9% 9% – 18% 10% n/m
Exxon Mobil / XOM 85.62 -42% 12% 410 416 117% 31% n/a 10% 10% 10% 2% 38% 18% 37%
Microsoft / MSFT 31.25 -52% 20% 262 222 32% 25% 10% 9% 9% 10% 3% 16% 12% >100%
IBM / IBM 193.42 -64% 1% 228 247 43% 20% 7% 7% 8% 9% 2% n/m 9% >100%
Wal-Mart / WMT 62.48 -33% 2% 214 266 165% 41% 5% 7% 7% 8% 2% 22% 10% 25%
Chevron / CVX 106.66 -53% 4% 212 202 126% 44% n/a 13% 12% 12% 3% 55% 24% 40%
General Electric / GE 19.28 -70% 119% 204 525 28% 10% n/a 6% 8% 9% 4% 16% 4% n/m
Berkshire Hathaway / BRK.A 119,190 -41% 27% 197 n/m n/m n/m 6% 6% 6% 7% – 49% n/m n/m
Google / GOOG 604.64 -71% 24% 197 156 24% 16% 6% 5% 7% 8% – 25% 8% >100%
Petroleo Brasileiro / PBR 29.32 -68% 165% 189 283 50% 19% neg. 12% 11% 12% 4% 68% 10% 12%
Procter & Gamble / PG 64.91 -39% 16% 179 209 41% 20% 5% 5% 6% 7% 3% n/m 8% 66%
Johnson & Johnson / JNJ 64.99 -29% 12% 177 165 39% 27% n/a 5% 8% 8% 4% 15% 8% 64%
Wells Fargo / WFC 31.09 -75% 44% 164 n/m n/m n/m n/a 9% 10% 12% 2% 55% n/m n/m
Pfizer / PFE 21.19 -45% 38% 163 175 39% 30% n/a 5% 11% 11% 4% n/m 13% 76%
Coca-Cola / KO 69.05 -46% 4% 157 171 27% 17% 4% 5% 6% 6% 3% 3% 6% 61%
BP / BP 47.62 -44% 68% 147 176 219% 39% 3% 17% 13% 14% 4% 53% 24% 33%
JPMorgan Chase / JPM 38.47 -61% 38% 146 n/m n/m n/m n/a 12% 12% 14% 3% 80% n/m n/m
Oracle / ORCL 28.79 -61% 27% 145 128 29% 22% 9% 6% 8% 9% 1% 9% 11% n/m
Philip Morris / PM 81.74 -65% 1% 141 157 49% 13% n/a 6% 6% 7% 4% n/m 9% >100%
Intel / INTC 27.37 -56% 5% 139 132 41% 26% n/a 9% 9% 10% 3% 22% 13% 76%
Vodafone / VOD 27.79 -45% 47% 138 182 41% 13% neg. 8% 9% 10% 5% 22% 11% 75%
TOTAL / TOT 55.08 -27% 66% 129 153 143% 45% 2% 13% 13% 13% 5% 57% 22% 33%
Merck / MRK 38.56 -48% 60% 118 120 40% 26% n/a 5% 10% 10% 4% 6% 8% 47%
GlaxoSmithKline / GSK 44.88 -40% 34% 113 127 34% 25% 7% 7% 8% 7% 5% n/m 10% >100%
Cisco / CSCO 20.29 -34% 69% 109 79 57% 35% 9% 6% 9% 10% 2% 28% 12% n/m
Qualcomm / QCOM 62.52 -55% 0% 106 95 17% 11% 5% 4% 6% 7% 1% 21% 6% >100%
Anheuser-Busch / BUD 65.37 -43% 0% 105 146 27% 15% n/a 5% 6% 6% 2% n/m 8% >100%
Schlumberger / SLB 77.74 -59% 48% 104 109 36% 8% 2% 5% 6% 7% 1% 12% 6% 35%
McDonald’s / MCD 99.99 -73% 2% 102 112 24% 10% n/a 5% 6% 6% 3% 10% 7% 40%
Sanofi / SNY 37.18 -36% 35% 99 114 40% 28% neg. 8% 13% 16% 5% n/m 8% 43%
PepsiCo / PEP 62.68 -30% 27% 98 120 55% 29% 6% 6% 7% 7% 3% n/m 9% 50%
ConocoPhillips / COP 73.36 -53% 31% 97 115 219% 35% 7% 12% 11% 12% 4% 63% 22% 31%
Citigroup / C 32.92 -71% 1631% 96 n/m n/m n/m n/a 11% 12% 14% 0% 149% n/m n/m
Visa / V 115.01 -64% 2% 94 n/m n/m n/m 4% 3% 5% 6% 1% 4% n/m >100%
Abbott Labs / ABT 56.36 -33% 8% 88 97 40% 24% n/a 5% 9% 9% 4% n/m 7% 57%
Occidental Petroleum / OXY 103.92 -74% 13% 84 86 26% 15% neg. 7% 8% 9% 2% 43% 12% 24%
Amazon.com / AMZN 182.50 -86% 35% 83 73 65% 15% 3% 1% 1% 1% – 7% 1% n/m
Bank of America / BAC 8.02 -68% 587% 81 n/m n/m n/m n/a neg. 9% 14% 1% 155% n/m n/m
Comcast / CMCSA 29.17 -68% 3% 79 117 48% 16% 10% 5% 6% 7% 2% n/m 9% 47%
United Technologies / UTX 83.78 -55% 10% 76 80 72% 20% 7% 7% 7% 8% 2% 0% 10% >100%
Walt Disney / DIS 41.75 -64% 6% 75 85 48% 9% 6% 6% 7% 8% 1% 5% 9% 39%
UPS / UPS 76.76 -51% 12% 74 81 66% 21% n/a 6% 6% 7% 3% 7% 8% 36%
Caterpillar / CAT 113.95 -81% 2% 74 105 57% 15% 4% 6% 8% 10% 2% 2% 7% 24%
Home Depot / HD 46.71 -63% 0% 72 81 86% 30% 7% 5% 5% 6% 3% 23% 8% 23%
Kraft Foods / KFT 38.01 -45% 3% 67 94 57% 20% 3% 5% 6% 7% 3% n/m 8% 49%
Novo Nordisk / NVO 138.08 -83% 1% 65 62 19% 15% 5% 4% 4% 4% 2% 10% 6% 100%
American Express / AXP 52.86 -82% 25% 61 n/m n/m n/m n/a 8% 8% 9% 1% 31% n/m n/m
3M / MMM 87.56 n/a n/a 61 62 n/a n/a n/a n/a 7% 8% 3% 11% n/a n/a
Altria Group / MO 29.65 -53% 3% 61 71 33% 13% 6% 6% 7% 8% 6% n/m 9% n/m
Diageo / DEO 94.97 -57% 0% 59 73 23% 14% neg. 4% 7% 7% 3% n/m 6% 49%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Trading Data Public Market Valuation
Greenblatt’s
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM TTM
EPS Yield
Tang.
TTM EBIT/
relevant websites)
Price
7-Year Value Value
Rev./ GP/ FCF
This Next Div.
Book/
Cap.

($)
Low High
($bn) ($bn) EV EV Yield TTM FY FY Yield MV EV Empl.
HP / HPQ 29.59 -36% 85% 58 81 157% 37% 14% 11% 14% 15% 2% n/m 14% 88%
CVS Caremark / CVS 44.27 -50% 2% 57 66 162% 31% 7% 6% 7% 8% 2% 3% 10% 44%
UnitedHealth / UNH 54.68 -73% 18% 57 n/m n/m n/m 10% 9% 9% 10% 1% 3% n/m n/m
Goldman Sachs / GS 115.91 -59% 116% 57 n/m n/m n/m n/a 4% 10% 12% 1% 108% n/m n/m
Bristol Myers / BMY 33.12 -52% 7% 56 54 40% 29% n/a 7% 6% 6% 4% 14% 13% >100%
U.S. Bancorp / USB 29.35 -73% 44% 56 n/m n/m n/m n/a 8% 9% 10% 2% 35% n/m n/m
EMC / EMC 27.10 -70% 6% 55 52 38% 23% 8% 4% 6% 7% – 9% 7% >100%
Suncor Energy / SU 34.29 -58% 117% 54 61 66% 34% 6% 8% 10% 11% 1% 66% 12% 13%
Amgen / AMGN 67.78 -42% 28% 54 55 28% 24% n/a 6% 9% 10% 2% 9% 8% 65%
Union Pacific / UNP 110.99 -74% 6% 53 61 32% 23% 5% 6% 7% 8% 2% 35% 9% 15%
AIG / AIG 27.23 -80% 4420% 52 n/m n/m n/m 4% 37% 3% 9% – 166% n/m n/m
MasterCard / MA 396.00 -90% 1% 50 n/m n/m n/m 5% 4% 6% 7% 0% 8% n/m n/m
News Corp. / NWSA 19.60 -75% 30% 49 55 62% 23% 7% 6% 7% 9% 1% 8% 10% 74%
Nike / NKE 106.68 -65% 1% 49 46 49% 22% 3% 4% 5% 5% 1% 19% 6% 48%
Baidu.com / BIDU 136.90 -97% 21% 48 46 5% 4% 0% 2% 3% 5% – 4% 3% >100%
Barrick Gold / ABX 47.03 -63% 19% 47 58 25% 14% 1% 10% n/a n/a 1% 28% 13% 24%
Enterprise Products / EPD 52.29 -69% 1% 46 61 72% 5% n/a 5% 5% 5% 5% 17% 5% 13%
Colgate Palmolive / CL 93.25 -48% 2% 45 49 34% 20% 5% 5% 6% 6% 3% 5% 8% >100%
eBay / EBAY 35.06 -72% 68% 45 41 28% 20% 5% 7% 7% 8% – 18% 6% 93%
Anadarko Petroleum / APC 88.05 -72% 1% 44 56 25% 21% n/a neg. 4% 5% 0% 28% 8% 13%
Las Vegas Sands / LVS 52.79 -97% 182% 43 50 19% 9% n/a 3% 5% 6% 2% 17% 5% 15%
Teva Pharma / TEVA 44.65 -40% 45% 43 56 33% 17% 8% 7% 13% 13% 2% n/m 7% 41%
General Motors / GM 27.34 -31% 44% 43 35 431% 55% n/a 17% 14% 17% – n/m 20% >100%
Monsanto / MON 79.34 -68% 84% 42 41 30% 15% 6% 4% 4% 5% 2% 15% 6% 50%
Medtronic / MDT 39.94 -40% 50% 42 50 33% 25% 9% 8% 9% 9% 2% 9% 9% 66%
Apache / APA 109.45 -57% 36% 42 49 34% 29% n/a 11% 11% 13% 1% 66% 17% 18%
Accenture / ACN 58.43 -70% 9% 41 36 79% 24% 8% 6% 7% 7% 2% 6% 10% n/m
Canadian Natural / CNQ 37.56 -74% 46% 41 50 26% 14% neg. 4% 6% 9% 1% 54% 5% 6%
Santander Brasil / BSBR 10.69 -37% 46% 41 n/m n/m n/m neg. 11% 8% 9% 5% 66% n/m n/m
Potash / POT 46.11 -82% 75% 40 44 20% 10% 3% 8% n/a n/a 1% 20% 9% 37%
Texas Instruments / TXN 33.59 -60% 18% 38 41 33% 17% 6% 6% 6% 7% 2% 9% 8% 47%
Emerson Electric / EMR 51.50 -53% 21% 38 41 58% 23% 7% 6% 7% 8% 3% n/m 9% 69%
Brookfield Asset / BAM 31.74 -65% 34% 37 72 23% 9% n/a 9% n/a n/a 2% 23% 6% n/m
Costco Wholesale / COST 84.47 -64% 5% 37 33 276% 34% 5% 4% 5% 5% 1% 32% 7% 27%
Starbucks / SBUX 48.45 -85% 2% 37 35 35% 9% 2% 3% 4% 5% 1% 12% 5% 74%
Nat.-Oilwell Varco / NOV 83.80 -80% 11% 36 32 45% 14% n/a 6% 7% 8% 1% 21% 9% 50%
Target / TGT 52.64 -53% 34% 35 54 129% 40% 3% 8% 8% 8% 2% 43% 10% 15%
Gilead Sciences / GILD 47.00 -68% 23% 35 25 33% 25% n/a 8% 8% 9% – 14% 15% >100%
BlackRock / BLK 196.19 -65% 27% 35 n/m n/m n/m n/a 6% 7% 8% 3% n/m n/m n/m
Lowe’s / LOW 27.68 -53% 29% 35 40 122% 42% 7% 5% 6% 6% 2% 48% 8% 14%
Halliburton / HAL 36.29 -65% 59% 33 35 70% 0% 2% 9% 11% 13% 1% 34% 13% 36%
Praxair / PX 110.00 -63% 2% 33 39 29% 12% 2% 5% 5% 6% 2% 9% 6% 23%
Dell / DELL 18.16 -57% 133% 33 27 228% 51% 14% 11% 12% 11% – 2% 17% n/m
Baxter International / BAX 56.97 -42% 26% 32 34 40% 21% n/a 7% 8% 9% 2% 13% 9% 45%
DIRECTV / DTV 44.98 -75% 19% 32 44 61% 30% 6% 8% 10% 12% – n/m 10% 76%
BCE / BCE 39.91 -58% 12% 31 49 40% 25% 5% 7% 8% 8% 5% n/m 9% 25%
EOG Resources / EOG 114.35 -72% 27% 31 35 29% 26% neg. 4% 4% 6% 1% 41% 9% 15%
Walgreen / WAG 34.71 -39% 49% 30 32 231% 65% 6% 8% 8% 8% 3% 42% 14% 30%
Devon Energy / DVN 74.95 -51% 70% 30 33 35% 29% neg. 7% 8% 10% 1% 51% 14% 19%
Yum! Brands / YUM 65.25 -67% 1% 30 32 39% 11% 4% 4% 5% 6% 2% 3% 6% 65%
MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, TTM = trailing twelve months, Cap. Empl. = capital employed.


Value-oriented Equity Investment Ideas for Sophisticated Investors

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Top 100, by This FY EPS Yield (consensus estimates)
Public Market Valuation Operating Performance
(Click data to visit TTM TTM TTM EPS Yield Tang. Rev./ ∆ Revenue % TTM Revenue 5-Yr.
relevant websites) Rev./ GP/ FCF This Next Div.
Book/ Empl. Last Gross Adj. Op.
EV EV Yield TTM FY FY Yield MV ($000) TTM Q Profit EBIT Margin
Newcastle Investment / NCT 8% 4% 9% 114% 26% 26% 11% 18% n/m -2% -11% 50% 40% -94%
US Airways / LCC 321% 123% n/a 3% 25% 28% – n/m 417 10% 9% 38% 3% 0%
Seagate Technology / STX 91% 21% 6% 8% 23% 32% 4% 20% 219 4% 18% 23% 11% 2%
Warner Chilcott / WCRX 35% 31% 15% 2% 22% 22% – n/m 1,028 -6% -7% 87% 26% 7%
Delta Air Lines / DAL 182% 50% 17% 9% 22% 25% – n/m 448 11% 8% 27% 7% -3%
United Continental / UAL 296% 68% n/a 8% 22% 26% – n/m 461 0% 5% 23% 7% -2%
C&J / CJES 73% 30% 3% 15% 20% 22% – 28% 1,053 211% 157% 42% 35% 21%
HollyFrontier / HFC 196% 35% 11% 16% 19% 13% 1% 38% 7,633 63% 147% 18% 11% 5%
Changyou / CYOU 48% 41% n/a 21% 18% 21% – 25% 222 40% 39% 86% 58% 50%
PDLI / PDLI 32% 0% 18% 12% 18% 22% 10% n/m 45,675 12% -3% n/m 93% 79%
Nortel Inversora / NTL n/m n/m 1590% 6% 17% 19% – >999% 262 26% 27% 73% 22% 18%
Assured Guaranty / AGO n/m n/m 26% 20% 17% 16% 2% 149% 4,856 -15% 287% 74% 76% n/m
Katy Industries / KT 126% 102% neg. 10% 16% 15% 8% 108% 560 -45% 112% 81% 9% 9%
PennyMac Mortgage / PMT n/m n/m n/a 14% 16% 16% 12% 107% 554 187% 173% 95% 70% n/m
Am. Capital Agency / AGNC 2% 2% n/a 17% 16% 16% 17% 91% n/m 338% 249% 74% 68% n/m
Hartford Financial / HIG n/m n/m n/a 5% 16% 17% 2% 223% 816 -1% -5% 24% 39% -6%
Quad Graphics / QUAD 195% 46% 25% 1% 16% 16% 6% 48% 214 84% -2% 24% 8% n/m
Telecom Argentina / TEO 246% 194% 26% 14% 15% 16% 8% 70% 249 26% 27% 79% 23% 17%
Cliffs Natural / CLF 54% 21% n/a 18% 15% 18% 2% 47% 1,035 -7% 17% 40% 36% 23%
Meritor / MTOR 307% 30% neg. 7% 15% 20% – n/m 459 -10% 21% 10% 4% 2%
Goodyear Tire / GT 367% 64% n/a 9% 15% 19% – n/m 316 21% 12% 17% 5% 1%
Gannett / GCI 99% 43% n/a 13% 15% 13% 2% n/m 161 -4% -5% 43% 16% -6%
Winthrop Realty / FUR 13% 9% 2% 7% 14% 11% 6% 87% n/m 38% 15% 73% 38% -41%
CNinsure / CISG n/m n/m 16% 14% 14% 16% – 85% 54 26% 19% 51% 26% 27%
Valero Energy / VLO 670% 55% n/a 15% 14% 17% 2% 117% 6,299 53% 56% 8% 3% 3%
HCA / HCA 87% 73% 21% 21% 14% 15% – n/m 223 6% 9% 84% 14% 7%
HP / HPQ 157% 37% 14% 11% 14% 15% 2% n/m 364 1% -3% 23% 9% 9%
Popular / BPOP n/m n/m n/a 8% 14% 18% – 183% 234 -18% -11% n/m 26% 19%
General Motors / GM 431% 55% n/a 17% 14% 17% – n/m 716 11% 3% 13% 5% 19%
SK Telecom / SKM 75% 72% neg. 15% 14% 14% 7% 32% 606 -40% 9% 96% 23% 15%
R.R. Donnelley / RRD 175% 42% 19% 9% 14% 13% 8% n/m 181 7% 8% 24% 7% 4%
KKR & Co. / KKR n/m n/m n/a 0% 14% 15% 5% 12% 1,037 66% 43% n/m -68% n/m
Xerox / XRX 115% 38% 13% 11% 13% 15% 2% 0% 162 5% 0% 33% 8% 5%
BP / BP 219% 39% 3% 17% 13% 14% 4% 53% 4,849 25% 15% 18% 11% 8%
CVR Energy / CVI 232% 35% 14% 11% 13% 13% – 41% 7,360 33% 31% 15% 11% 5%
Symetra Financial / SYA n/m n/m n/a 14% 13% 14% 2% 260% 1,817 6% 13% 16% 20% 11%
Best Buy / BBY 570% 141% 27% 11% 13% 14% 3% 33% 281 0% 2% 25% 4% 5%
Genworth Financial / GNW n/m n/m n/a 3% 13% 19% – 325% 1,616 3% 0% 16% 23% n/m
Sanofi / SNY 40% 28% neg. 8% 13% 16% 5% n/m 454 3% 8% 69% 20% 18%
Alliant Techsystems / ATK 157% 35% 13% 14% 13% 12% 1% n/m 307 -4% -1% 22% 11% 10%
SLM Corp. / SLM n/m n/m n/a 7% 13% 14% 3% 51% 757 -31% 0% 58% 17% 8%
TOTAL / TOT 143% 45% 2% 13% 13% 13% 5% 57% 2,359 18% 20% 32% 15% 15%
Validus / VR n/m n/m n/a 0% 13% 15% 3% 106% 4,145 -4% 28% 18% 23% 23%
Everest Re / RE n/m n/m 11% neg. 13% 14% 2% 102% 4,824 -20% 2% -36% -4% 10%
TRW Automotive / TRW 258% 30% 9% 18% 13% 14% – 15% 257 13% 7% 11% 8% 4%
Teva Pharma / TEVA 33% 17% 8% 7% 13% 13% 2% n/m 436 14% 28% 52% 22% 18%
Cumulus Media / CMLS 9% 4% 8% 38% 13% 11% – n/m 142 3% 96% 41% 10% -40%
CF Industries / CF 51% 24% 19% 12% 13% 11% 1% 18% 2,541 89% 53% 47% 45% 21%
Alliance One / AOI 132% 18% neg. neg. 13% n/a – 102% 573 -11% -5% 14% 7% 7%
TravelCenters / TA >999% 848% neg. neg. 12% 15% – 199% 496 31% 38% 13% 0% -1%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Public Market Valuation Operating Performance
(Click data to visit TTM TTM TTM EPS Yield Tang. Rev./ ∆ Revenue % TTM Revenue 5-Yr.
relevant websites) Rev./ GP/ FCF This Next Div.
Book/ Empl. Last Gross Adj. Op.
EV EV Yield TTM FY FY Yield MV ($000) TTM Q Profit EBIT Margin
Health Mgmt Assoc. / HMA 115% 99% 15% 10% 12% 14% – 44% 204 14% 18% 87% 10% 10%
Crexus Investment / CXS n/m n/m 3% 11% 12% 11% 12% 106% n/m 422% 672% 95% 80% n/m
Citigroup / C n/m n/m n/a 11% 12% 14% 0% 149% 273 -8% -6% n/m 45% 29%
Patterson-UTI Energy / PTEN 72% 29% neg. 10% 12% 13% 1% 76% 313 75% 43% 40% 20% 18%
JPMorgan Chase / JPM n/m n/m n/a 12% 12% 14% 3% 80% 236 -36% -4% n/m 61% 40%
CIGNA / CI n/m n/m 10% 12% 12% 13% 0% 36% 718 7% 7% 43% 43% 8%
BofI Holding / BOFI n/m n/m 10% 13% 12% 13% – 89% 610 23% 27% n/m 49% 40%
Valassis Comms / VCI 136% 34% n/a 9% 12% 13% – n/m 332 -4% -6% 25% 10% 10%
Flextronics / FLEX 553% 28% 10% 10% 12% 15% – 43% 170 8% -4% 5% 2% -3%
Navistar / NAV 209% 40% 14% 50% 12% 15% – n/m 735 15% 28% 19% 6% 2%
Capital One / COF n/m n/m n/a 14% 12% 14% 0% 72% 491 -2% 1% n/m 38% 42%
Chevron / CVX 126% 44% n/a 13% 12% 12% 3% 55% 4,092 24% 11% 35% 19% 15%
RadioShack / RSH 548% 238% 21% 13% 12% 10% 6% 97% 123 2% 3% 43% 5% 7%
YPF S.A. / YPF 77% 21% 2% 10% 12% 13% 10% 34% 924 29% 35% 27% 17% 22%
Annaly / NLY 4% 2% n/a 3% 12% 13% 14% 96% 31,400 33% 24% 62% 55% 32%
WellPoint / WLP n/m n/m 12% 11% 12% 13% 2% 7% 1,619 3% 5% 22% 7% 8%
Dell / DELL 228% 51% 14% 11% 12% 11% – 2% 615 2% 0% 22% 8% 5%
Xerium Technologies / XRM 103% 39% 12% 5% 12% 15% – n/m 172 9% 9% 38% 12% 1%
Axis Capital / AXS n/m n/m n/a neg. 12% 12% 3% 114% 3,801 7% 0% 14% 18% 19%
Forest Labs / FRX 77% 60% 12% 12% 12% 4% – 36% 834 -14% 7% 78% 31% 26%
Owens Illinois / OI 97% 18% 6% neg. 12% 13% – n/m 307 11% 5% 19% 10% 3%
Endurance Specialty / ENH n/m n/m n/a neg. 12% 11% 3% 139% 2,434 -12% 6% -13% 9% 15%
Delphi Automotive / DLPH 146% 24% 7% 11% 12% 13% – 11% 697 58% 18% 17% 11% n/m
Kronos Worldwide / KRO 65% 23% 9% 10% 11% 13% 3% 34% 770 36% 46% 35% 25% 6%
DISH Network / DISH 76% 32% 13% 11% 11% 9% – n/m 619 10% 12% 43% 19% 14%
Bridgepoint Edu. / BPI 81% 60% 14% 12% 11% 11% – 23% 9,045 39% 27% 73% 31% 10%
Chesapeake Energy / CHK 35% 30% neg. 8% 11% 8% 1% 81% 1,088 13% 54% 86% 23% 0%
Petroleo Brasileiro / PBR 50% 19% neg. 12% 11% 12% 4% 68% 1,761 24% 26% 39% 20% 23%
ConocoPhillips / COP 219% 35% 7% 12% 11% 12% 4% 63% 8,430 26% 17% 16% 10% 7%
Apache / APA 34% 29% n/a 11% 11% 13% 1% 66% 3,796 40% 25% 83% 49% 30%
RenaissanceRe / RNR n/m n/m n/a neg. 11% 12% 1% 76% 2,118 -30% 11% -48% 4% 39%
Enstar Group / ESGR n/m n/m neg. 11% 11% 12% – 74% 356 -5% -65% n/m 225% 172%
Fifth Street Finance / FSC n/m n/m neg. 3% 11% 12% 11% 85% n/m 69% 56% 71% 65% 21%
Federal-Mogul / FDML 188% 30% neg. 11% 11% 12% – n/m 160 -9% 12% 16% 5% 2%
Halliburton / HAL 70% 0% 2% 9% 11% 13% 1% 34% 414 -5% 37% n/m 19% 19%
Torchmark / TMK n/m n/m 19% 10% 11% 12% 1% 76% 1,525 3% 0% 35% 43% 21%
PHH / PHH n/m n/m n/a neg. 11% 14% – 22% 395 -9% -29% 16% -9% -3%
AngloGold Ashanti / AU 37% 15% 8% 9% 11% 11% 1% 29% 106 23% 15% 40% 33% -4%
Pfizer / PFE 39% 30% n/a 5% 11% 11% 4% n/m 610 1% -4% 78% 33% 19%
NCR / NCR 140% 29% 5% 1% 11% 11% – n/m 259 13% 17% 21% 3% 3%
ITT Educational / ESI 84% 53% 18% 15% 11% 10% – 8% 238 -6% -10% 63% 34% 34%
Walter Energy / WLT 36% 15% 7% 9% 10% 9% 1% 45% 568 60% 49% 43% 25% 25%
Transatlantic / TRH n/m n/m 17% neg. 10% 10% 2% 114% 6,819 0% 3% 0% 0% 8%
General Dynamics / GD 123% 0% 11% 10% 10% 11% 3% n/m 371 1% 6% n/m 12% 12%
Wells Fargo / WFC n/m n/m n/a 9% 10% 12% 2% 55% 187 -6% -5% n/m 57% 48%
Ameriprise Financial / AMP n/m n/m n/a 8% 10% 12% 2% 81% 978 7% 1% 75% 17% 10%
Ingram Micro / IM >999% 76% n/a 8% 10% 12% – 107% 2,321 5% 1% 5% 1% 1%
Alere / ALR 45% 24% n/a neg. 10% 11% – n/m 201 -11% 13% 52% 6% -13%
Huntington Ingalls / HII 209% 32% 4% neg. 10% 8% – n/m 167 96% -1% 15% 6% n/m
Primerica / PRI n/m n/m n/a 9% 10% 11% 1% 82% 615 -19% -1% 48% 59% 29%
MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, TTM = trailing twelve months, Cap. Empl. = capital employed.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Top 100, by Next FY EPS Yield (consensus estimates)
Trading Data Public Market Valuation
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM TTM EPS Yield Tang.
relevant websites) Price 7-Year Value Value Rev./ GP/ FCF This Next Div.
Book/
($) Low High ($mn) ($mn) EV EV Yield TTM FY FY Yield MV
Seagate Technology / STX 26.88 -89% 8% 12,062 12,755 91% 21% 6% 8% 23% 32% 4% 20%
US Airways / LCC 8.90 -84% 611% 1,443 4,062 321% 123% n/a 3% 25% 28% – n/m
GeoMet / GMET 0.74 -28% 1507% 30 138 23% 11% neg. neg. 7% 27% – 170%
United Continental / UAL 23.37 -88% 121% 7,723 12,523 296% 68% n/a 8% 22% 26% – n/m
Newcastle Investment / NCT 5.69 -97% 489% 598 3,770 8% 4% 9% 114% 26% 26% 11% 18%
Delta Air Lines / DAL 10.83 -68% 115% 9,157 19,333 182% 50% 17% 9% 22% 25% – n/m
C&J / CJES 20.99 -40% 57% 1,089 1,042 73% 30% 3% 15% 20% 22% – 28%
PDLI / PDLI 6.29 -26% 276% 880 1,140 32% 0% 18% 12% 18% 22% 10% n/m
Warner Chilcott / WCRX 17.00 -46% 80% 4,320 7,895 35% 31% 15% 2% 22% 22% – n/m
Changyou / CYOU 25.44 -25% 104% 1,331 983 48% 41% n/a 21% 18% 21% – 25%
Meritor / MTOR 7.90 -96% 199% 748 1,572 307% 30% neg. 7% 15% 20% – n/m
Genworth Financial / GNW 9.22 -92% 303% 4,526 n/m n/m n/m n/a 3% 13% 19% – 325%
Goodyear Tire / GT 13.42 -76% 175% 3,282 6,211 367% 64% n/a 9% 15% 19% – n/m
Nortel Inversora / NTL 22.91 -88% 58% 36 -446 n/m n/m 1590% 6% 17% 19% – >999%
Take-Two / TTWO 15.34 -64% 93% 1,374 1,233 70% 27% neg. neg. neg. 18% – 20%
Cliffs Natural / CLF 66.72 -82% 83% 9,475 12,637 54% 21% n/a 18% 15% 18% 2% 47%
Popular / BPOP 1.68 -40% 1607% 1,722 n/m n/m n/m n/a 8% 14% 18% – 183%
General Motors / GM 27.34 -31% 44% 42,775 34,851 431% 55% n/a 17% 14% 17% – n/m
Hartford Financial / HIG 21.65 -85% 391% 9,580 n/m n/m n/m n/a 5% 16% 17% 2% 223%
Valero Energy / VLO 24.99 -44% 215% 13,988 18,807 670% 55% n/a 15% 14% 17% 2% 117%
Assured Guaranty / AGO 17.52 -85% 83% 3,193 n/m n/m n/m 26% 20% 17% 16% 2% 149%
CNinsure / CISG 8.53 -38% 237% 428 n/m n/m n/m 16% 14% 14% 16% – 85%
Sanofi / SNY 37.18 -36% 35% 99,425 114,283 40% 28% neg. 8% 13% 16% 5% n/m
PennyMac Mortgage / PMT 17.95 -68% 11% 510 n/m n/m n/m n/a 14% 16% 16% 12% 107%
Quad Graphics / QUAD 13.78 -18% 262% 646 2,304 195% 46% 25% 1% 16% 16% 6% 48%
Am. Capital Agency / AGNC 30.37 -60% 3% 6,807 54,029 2% 2% n/a 17% 16% 16% 17% 91%
Telecom Argentina / TEO 20.00 -78% 46% 2,106 1,639 246% 194% 26% 14% 15% 16% 8% 70%
Xerium Technologies / XRM 9.01 -33% 2719% 136 569 103% 39% 12% 5% 12% 15% – n/m
Navistar / NAV 44.53 -66% 78% 3,077 6,679 209% 40% 14% 50% 12% 15% – n/m
Katy Industries / KT 14.33 -31% 111% 7,494 13,851 126% 102% neg. 10% 16% 15% 8% 108%
HP / HPQ 29.59 -36% 85% 58,479 81,070 157% 37% 14% 11% 14% 15% 2% n/m
Greenlight Re / GLRE 25.27 -66% 19% 923 n/m n/m n/m 1% neg. 2% 15% – 79%
Flextronics / FLEX 6.93 -82% 108% 4,761 5,414 553% 28% 10% 10% 12% 15% – 43%
TravelCenters / TA 5.37 -82% 783% 155 119 >999% 848% neg. neg. 12% 15% – 199%
HCA / HCA 25.08 -32% 41% 10,949 37,628 87% 73% 21% 21% 14% 15% – n/m
AbitibiBowater / ABH 15.49 -12% 97% 1,566 1,818 262% 64% 6% 3% 9% 15% – 217%
Validus / VR 31.54 -60% 11% 3,124 n/m n/m n/m n/a 0% 13% 15% 3% 106%
Xerox / XRX 8.30 -50% 143% 11,513 19,593 115% 38% 13% 11% 13% 15% 2% 0%
KKR & Co. / KKR 15.10 -43% 27% 10,319 n/m n/m n/m n/a 0% 14% 15% 5% 12%
Best Buy / BBY 25.71 -36% 131% 9,007 8,892 570% 141% 27% 11% 13% 14% 3% 33%
Citigroup / C 32.92 -71% 1631% 96,255 n/m n/m n/m n/a 11% 12% 14% 0% 149%
Symetra Financial / SYA 10.08 -25% 44% 1,196 n/m n/m n/m n/a 14% 13% 14% 2% 260%
PHH / PHH 14.22 -70% 122% 802 n/m n/m n/m n/a neg. 11% 14% – 22%
BP / BP 47.62 -44% 68% 146,642 176,500 219% 39% 3% 17% 13% 14% 4% 53%
JPMorgan Chase / JPM 38.47 -61% 38% 146,177 n/m n/m n/m n/a 12% 12% 14% 3% 80%
Everest Re / RE 90.00 -39% 29% 5,981 n/m n/m n/m 11% neg. 13% 14% 2% 102%
Republic / RJET 5.72 -57% 317% 276 2,461 114% 31% 42% neg. 4% 14% – 164%
Capital One / COF 48.83 -84% 84% 22,446 n/m n/m n/m n/a 14% 12% 14% 0% 72%
Health Mgmt Assoc. / HMA 7.01 -89% 285% 1,781 5,067 115% 99% 15% 10% 12% 14% – 44%
Cowen / COWN 2.78 -17% 685% 321 n/m n/m n/m 100% neg. neg. 14% – 169%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Trading Data Public Market Valuation
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM TTM EPS Yield Tang.
relevant websites) Price 7-Year Value Value Rev./ GP/ FCF This Next Div.
Book/
($) Low High ($mn) ($mn) EV EV Yield TTM FY FY Yield MV
TRW Automotive / TRW 48.56 -97% 30% 6,010 6,301 258% 30% 9% 18% 13% 14% – 15%
Bank of America / BAC 8.02 -68% 587% 81,290 n/m n/m n/m n/a neg. 9% 14% 1% 155%
SLM Corp. / SLM 16.14 -81% 262% 8,211 n/m n/m n/m n/a 7% 13% 14% 3% 51%
SK Telecom / SKM 13.90 -9% 142% 9,973 12,441 75% 72% neg. 15% 14% 14% 7% 32%
Valassis Comms / VCI 25.58 -96% 59% 1,145 1,645 136% 34% n/a 9% 12% 13% – n/m
CIGNA / CI 44.93 -82% 28% 12,826 n/m n/m n/m 10% 12% 12% 13% 0% 36%
Teva Pharma / TEVA 44.65 -40% 45% 42,784 56,204 33% 17% 8% 7% 13% 13% 2% n/m
Delphi Automotive / DLPH 31.29 -39% 1% 10,271 11,011 146% 24% 7% 11% 12% 13% – 11%
YPF S.A. / YPF 33.03 -52% 112% 14,163 16,011 77% 21% 2% 10% 12% 13% 10% 34%
Kronos Worldwide / KRO 22.83 -90% 51% 2,646 2,892 65% 23% 9% 10% 11% 13% 3% 34%
Gannett / GCI 14.95 -88% 451% 3,562 5,285 99% 43% n/a 13% 15% 13% 2% n/m
R.R. Donnelley / RRD 13.23 -58% 242% 2,485 6,056 175% 42% 19% 9% 14% 13% 8% n/m
Owens Illinois / OI 24.05 -60% 152% 3,954 7,587 97% 18% 6% neg. 12% 13% – n/m
HollyFrontier / HFC 33.21 -84% 21% 6,949 6,457 196% 35% 11% 16% 19% 13% 1% 38%
Commercial Metals / CMC 13.45 -54% 196% 1,555 2,532 321% 25% neg. neg. 8% 13% 4% 71%
BofI Holding / BOFI 16.65 -82% 16% 190 n/m n/m n/m 10% 13% 12% 13% – 89%
WellPoint / WLP 66.05 -58% 36% 22,976 n/m n/m n/m 12% 11% 12% 13% 2% 7%
Apache / APA 109.45 -57% 36% 42,035 48,956 34% 29% n/a 11% 11% 13% 1% 66%
TOTAL / TOT 55.08 -27% 66% 129,162 153,175 143% 45% 2% 13% 13% 13% 5% 57%
Universal Stainless / USAP 39.54 -80% 37% 270 365 69% 13% neg. 6% 10% 13% – 59%
Annaly / NLY 16.66 -40% 27% 16,163 100,821 4% 2% n/a 3% 12% 13% 14% 96%
CVR Energy / CVI 29.03 -93% 7% 2,513 2,207 232% 35% 14% 11% 13% 13% – 41%
Halliburton / HAL 36.29 -65% 59% 33,495 35,467 70% 0% 2% 9% 11% 13% 1% 34%
Patterson-UTI Energy / PTEN 19.76 -62% 95% 3,079 3,558 72% 29% neg. 10% 12% 13% 1% 76%
Chevron / CVX 106.66 -53% 4% 212,412 201,820 126% 44% n/a 13% 12% 12% 3% 55%
RenaissanceRe / RNR 72.93 -57% 8% 4,034 n/m n/m n/m n/a neg. 11% 12% 1% 76%
Flagstone Re / FSR 9.24 -31% 59% 647 n/m n/m n/m neg. neg. neg. 12% 2% 128%
Hanesbrands / HBI 26.97 -81% 40% 2,621 4,623 100% 33% 4% 10% 10% 12% – 3%
DIRECTV / DTV 44.98 -75% 19% 31,737 44,328 61% 30% 6% 8% 10% 12% – n/m
Alliant Techsystems / ATK 59.77 -14% 102% 1,973 2,923 157% 35% 13% 14% 13% 12% 1% n/m
ConocoPhillips / COP 73.36 -53% 31% 97,403 114,527 219% 35% 7% 12% 11% 12% 4% 63%
Enstar Group / ESGR 98.70 -58% 49% 1,428 n/m n/m n/m neg. 11% 11% 12% – 74%
Axis Capital / AXS 32.66 -47% 33% 4,265 n/m n/m n/m n/a neg. 12% 12% 3% 114%
Ameriprise Financial / AMP 56.54 -79% 22% 12,793 n/m n/m n/m n/a 8% 10% 12% 2% 81%
Ingram Micro / IM 19.52 -56% 15% 2,994 2,495 >999% 76% n/a 8% 10% 12% – 107%
Torchmark / TMK 48.72 -78% 0% 4,967 n/m n/m n/m 19% 10% 11% 12% 1% 76%
SunTrust Banks / STI 22.69 -74% 315% 12,185 n/m n/m n/m n/a 5% 8% 12% 1% 103%
Regions Financial / RF 6.00 -61% 553% 7,553 n/m n/m n/m n/a neg. 8% 12% 1% 101%
Petroleo Brasileiro / PBR 29.32 -68% 165% 188,502 283,124 50% 19% neg. 12% 11% 12% 4% 68%
Federal-Mogul / FDML 17.49 -88% 69% 1,730 3,633 188% 30% neg. 11% 11% 12% – n/m
SanDisk / SNDK 47.79 -89% 67% 11,484 10,240 55% 24% 7% 8% 10% 12% – 58%
Bancorp / TBBK 8.43 -75% 262% 280 n/m n/m n/m n/a 3% 7% 12% – 94%
Wells Fargo / WFC 31.09 -75% 44% 163,954 n/m n/m n/m n/a 9% 10% 12% 2% 55%
Baker Hughes / BHI 50.06 -51% 100% 21,850 24,869 80% 18% neg. 8% 10% 12% 1% 41%
Fifth Street Finance / FSC 10.19 -51% 37% 839 n/m n/m n/m neg. 3% 11% 12% 11% 85%
Goldman Sachs / GS 115.91 -59% 116% 57,064 n/m n/m n/m n/a 4% 10% 12% 1% 108%
MEMC Electronic / WFR 4.70 -22% 1944% 1,083 2,424 112% 12% neg. neg. 4% 11% – 54%
AngloGold Ashanti / AU 42.42 -68% 47% 16,344 17,720 37% 15% 8% 9% 11% 11% 1% 29%
NCR / NCR 21.80 -70% 35% 3,436 3,891 140% 29% 5% 1% 11% 11% – n/m
Suncor Energy / SU 34.29 -58% 117% 53,979 60,987 66% 34% 6% 8% 10% 11% 1% 66%
MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, TTM = trailing twelve months, Cap. Empl. = capital employed.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Top 100, by Trailing Gross Profit to Enterprise Value
Trading Data Public Market Valuation Operating Performance Tang.
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM Tang. Rev./ % TTM Revenue 5-Yr.
Equity/
relevant websites) Price 7-Year Value Value Rev./ GP/ Book/ Empl. Gross Adj. Op. Tang.
($) Low High ($mn) ($mn) EV EV MV ($000) Profit EBIT Margin Assets
ZipRealty / ZIPR 1.35 -25% 1285% 28 3 >999% >999% 85% 589 44% -10% -13% 75%
TravelCenters / TA 5.37 -82% 783% 155 119 >999% 848% 199% 496 13% 0% -1% 31%
MedCath / MDTH 7.88 -28% 339% 160 53 610% 474% 193% 194 78% 0% -1% 77%
Frozen Food Express / FFEX 1.23 -11% 1061% 22 58 678% 336% 250% 171 50% -7% -2% 37%
IDT Corp. / IDT 9.27 -96% 202% 211 112 >999% 255% 25% 1,268 18% 1% -4% 14%
RadioShack / RSH 7.88 -18% 344% 787 785 548% 238% 97% 123 43% 5% 7% 35%
Office Depot / ODP 3.26 -82% 1327% 914 1,501 765% 225% 71% 287 29% 0% -1% 16%
Learning Tree / LTRE 5.93 -20% 367% 80 35 380% 205% 49% 286 54% 4% 6% 39%
Telecom Argentina / TEO 20.00 -78% 46% 2,106 1,639 246% 194% 70% 249 79% 23% 17% 52%
Westell Technologies / WSTL 2.42 -99% 225% 160 18 590% 187% 118% 296 32% 5% -1% 93%
Overstock.com / OSTK 6.77 -6% 939% 158 102 >999% 185% 8% 726 17% 0% -3% 9%
Zale / ZLC 3.40 -74% 1142% 110 573 308% 157% 66% 140 51% 0% -3% 6%
Xinyuan Real Estate / XIN 2.45 -37% 635% 188 128 489% 145% 320% 1,467 30% 23% 12% 46%
Skechers / SKX 13.04 -60% 244% 651 437 368% 143% 130% 638 39% -6% 4% 66%
Best Buy / BBY 25.71 -36% 131% 9,007 8,892 570% 141% 33% 281 25% 4% 5% 15%
E.W. Scripps / SSP 9.17 -93% 34% 502 354 212% 138% 102% 163 65% 2% -18% 71%
hhgregg / HGG 12.93 -72% 141% 482 504 473% 137% 66% 490 29% 3% 4% 42%
Ambassadors Group / EPAX 5.83 -33% 605% 102 43 153% 136% 63% 313 89% 3% 22% 63%
ITT Corp. / ITT 22.72 -53% 7% 2,107 2,594 455% 131% n/m 295 29% 12% 10% -12%
Corinthian Colleges / COCO 4.94 -75% 340% 419 516 332% 127% 45% 154 38% 3% 5% 29%
Gravity / GRVY 2.89 -88% 376% 80 24 216% 127% 56% 140 59% 15% -14% 62%
ReachLocal / RLOC 7.86 -23% 261% 231 146 257% 127% 12% 272 49% -1% -2% 25%
Aviat Networks / AVNW 2.82 -56% 694% 173 103 440% 125% 91% 453 28% -2% -18% 48%
Blyth / BTH 61.71 -78% 119% 507 427 210% 124% 36% 389 59% 3% 3% 38%
US Airways / LCC 8.90 -84% 611% 1,443 4,062 321% 123% n/m 417 38% 3% 0% -5%
Nokia / NOK 5.49 -19% 669% 20,076 12,091 420% 123% 37% 374 29% 2% 6% 19%
Motricity / MOTR 1.47 -49% 2073% 68 71 188% 122% 31% 393 65% -8% -86% 25%
Sears Holdings / SHLD 54.53 -51% 256% 5,828 9,756 438% 117% 54% 137 27% 0% 2% 15%
RIMM / RIMM 15.07 -17% 883% 7,907 6,600 300% 116% 89% 1,131 39% 15% 25% 65%
MakeMusic / MMUS 4.35 -57% 171% 22 12 138% 115% 46% 160 83% -3% 3% 62%
Talbots / TLB 3.10 -62% 1040% 219 324 353% 108% 9% 328 31% -3% 1% 3%
AnnTaylor Stores / ANN 24.04 -90% 88% 1,259 1,119 193% 107% 35% 584 55% 7% 1% 45%
Sony / SNE 20.60 -24% 190% 20,679 16,539 492% 106% 87% 484 22% 0% 1% 12%
Katy Industries / KT 14.33 -31% 111% 7,494 13,851 126% 102% 108% 560 81% 9% 9% 36%
Health Mgmt Assoc. / HMA 7.01 -89% 285% 1,781 5,067 115% 99% 44% 204 87% 10% 10% 13%
Richardson Electron. / RELL 12.34 -80% 25% 209 48 336% 99% 101% 546 29% 3% -4% 84%
Scholastic / SCHL 31.74 -71% 26% 986 1,086 179% 97% 46% 207 54% 8% 7% 36%
Kenneth Cole / KCP 12.85 -62% 175% 233 194 242% 95% 52% 669 39% 0% -1% 49%
Cracker Barrel / CBRL 55.63 -81% 4% 1,277 1,777 137% 93% 23% 36 68% 7% 7% 22%
China Yuchai / CYD 16.55 -85% 102% 617 640 384% 92% 128% 220 24% 11% 8% 27%
Coca-Cola FEMSA / KOF 99.97 -78% 3% 4,101 4,385 199% 91% 144% 128 46% 15% 15% 60%
WPX Energy / WPX 18.87 -25% 24% 3,707 3,657 108% 87% 187% 3,687 80% 48% n/m 68%
New York Times / NYT 7.29 -53% 461% 1,069 1,577 147% 87% 7% 313 59% 10% 4% 3%
Marriott Vacations / VAC 22.79 -31% 2% 768 1,576 102% 86% 215% 162 84% 9% n/m 52%
Telephone & Data / TDS 28.88 -38% 182% 3,132 3,816 134% 82% 52% 654 61% 7% 11% 28%
Washington Post / WPO 395.39 -25% 148% 3,052 2,885 151% 81% 20% 217 54% 9% 9% 20%
School Specialty / SCHS 3.21 -33% 1425% 61 367 203% 79% n/m 388 39% 1% -4% -16%
Tandy Leather / TLF 5.20 -70% 60% 53 50 129% 78% 60% 177 60% 12% 10% 77%
Ingram Micro / IM 19.52 -56% 15% 2,994 2,495 >999% 76% 107% 2,321 5% 1% 1% 35%
Intelligent Systems / INS 1.55 -65% 192% 14 11 145% 74% 42% 68 51% 2% -15% 57%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Trading Data Public Market Valuation Operating Performance Tang.
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM Tang. Rev./ % TTM Revenue 5-Yr.
Equity/
relevant websites) Price 7-Year Value Value Rev./ GP/ Book/ Empl. Gross Adj. Op. Tang.
($) Low High ($mn) ($mn) EV EV MV ($000) Profit EBIT Margin Assets
Veeco Instruments / VECO 29.42 -89% 96% 1,139 650 151% 73% 62% 1,088 48% 28% 8% 80%
HCA / HCA 25.08 -32% 41% 10,949 37,628 87% 73% n/m 223 84% 14% 7% -62%
Quiksilver / ZQK 4.69 -83% 286% 776 1,414 138% 72% 26% 296 52% 7% 6% 15%
SK Telecom / SKM 13.90 -9% 142% 9,973 12,441 75% 72% 32% 606 96% 23% 15% 33%
Primus Telecom / PTGI 12.94 -75% 26% 177 404 235% 72% n/m 568 31% 1% 12% -33%
Collective Brands / PSS 17.64 -78% 111% 1,069 1,467 233% 71% 4% 262 31% 0% 4% 3%
Avon Products / AVP 19.19 -25% 138% 8,267 10,330 109% 69% 10% 269 63% 10% 10% 12%
United Continental / UAL 23.37 -88% 121% 7,723 12,523 296% 68% n/m 461 23% 7% -2% -23%
Sprint Nextel / S 2.30 -41% 1083% 6,890 21,567 156% 68% n/m 842 44% 0% -17% -41%
Abercrombie & Fitch / ANF 48.48 -72% 77% 4,167 3,705 107% 68% 46% 442 63% 9% 13% 63%
Dillard’s / DDS 51.48 -95% 19% 2,586 3,525 181% 67% 79% 215 37% 7% 1% 43%
SuperMedia / SPMD 2.98 -61% 1540% 46 1,914 88% 66% n/m 383 74% 23% 93% -266%
Walgreen / WAG 34.71 -39% 49% 30,319 31,626 231% 65% 42% 415 28% 6% 6% 50%
Big Lots / BIG 44.12 -77% 1% 2,894 3,120 162% 65% 25% 389 40% 7% 6% 38%
AbitibiBowater / ABH 15.49 -12% 97% 1,566 1,818 262% 64% 217% 453 25% 5% -3% 54%
Goodyear Tire / GT 13.42 -76% 175% 3,282 6,211 367% 64% n/m 316 17% 5% 1% -3%
Media General / MEG 5.11 -78% 1256% 118 753 82% 63% n/m 133 77% 5% -19% -90%
Expedia / EXPE 33.07 -83% 5% 4,420 4,331 80% 62% n/m 364 78% 14% -4% -49%
FalconStor Software / FALC 2.91 -31% 433% 136 100 84% 62% 17% 167 73% -18% -6% 37%
U.S. Cellular / USM 47.98 -43% 118% 4,057 4,322 100% 61% 41% 549 61% 6% 6% 38%
Vishay Precision / VPG 15.48 -37% 31% 207 138 173% 60% 84% 104 35% 7% 1% 71%
J.C. Penney / JCP 42.68 -68% 104% 9,114 11,131 158% 60% 50% 112 38% 5% 7% 35%
Forest Labs / FRX 32.03 -43% 81% 8,505 6,060 77% 60% 36% 834 78% 31% 26% 62%
Bridgepoint Edu. / BPI 26.37 -64% 16% 1,361 1,112 81% 60% 23% 9,045 73% 31% 10% 57%
Saks / SKS 10.87 -86% 127% 1,738 2,037 145% 59% 68% 301 41% 5% 0% 55%
Openwave Systems / OPWV 2.52 -82% 820% 218 155 105% 59% 17% 303 57% -9% -29% 32%
Staples / SPLS 15.15 -21% 85% 10,596 11,523 217% 58% 24% 472 27% 6% 7% 28%
Sealy Corp. / ZZ 1.59 -73% 1045% 161 844 146% 57% n/m 288 39% 7% 9% -79%
OmniVision / OVTI 16.75 -75% 121% 978 558 182% 56% 77% 695 31% 13% 4% 67%
Tenet Healthcare / THC 5.66 -86% 131% 2,793 7,037 135% 56% 5% 221 41% 8% 2% 2%
Liz Claiborne / LIZ 9.86 -85% 375% 933 1,668 107% 55% n/m 158 52% -4% -8% -58%
General Motors / GM 27.34 -31% 44% 42,775 34,851 431% 55% n/m 716 13% 5% 19% -11%
Valero Energy / VLO 24.99 -44% 215% 13,988 18,807 670% 55% 117% 6,299 8% 3% 3% 40%
DeVry / DV 37.67 -59% 97% 2,500 2,212 97% 54% 21% 210 56% 19% 17% 48%
Healthsouth / HLS 20.08 -67% 42% 1,913 3,561 57% 54% n/m 134 95% 18% 9% -22%
Live Nation / LYV 10.51 -76% 144% 1,991 2,933 185% 54% n/m 836 29% 0% -2% -36%
ITT Educational / ESI 75.52 -45% 77% 2,014 1,786 84% 53% 8% 238 63% 34% 34% 23%
Net1 UEPS / UEPS 9.67 -40% 250% 435 485 79% 52% 9% 167 66% 25% 32% 10%
Electronic Arts / EA 17.47 -20% 307% 5,789 4,532 85% 51% 3% 499 60% -4% -12% 4%
Cemex / CX 8.52 -73% 317% 8,630 7,830 182% 51% 176% 311 28% 6% 8% 35%
Philips Electronics / PHG 21.17 -34% 117% 21,311 22,437 132% 51% 8% 244 38% 5% 4% 7%
LifePoint Hospitals / LPNT 39.97 -58% 29% 1,925 3,396 105% 51% 15% 213 48% 10% 8% 11%
Dell / DELL 18.16 -57% 133% 32,625 27,048 228% 51% 2% 615 22% 8% 5% 2%
Apollo Group / APOL 52.75 -37% 71% 6,667 5,580 82% 50% 15% 83 61% 23% 23% 38%
Symmetricom / SYMM 6.25 -60% 92% 263 205 111% 50% 70% 398 45% 7% -1% 82%
Macy’s / M 36.25 -86% 29% 15,219 21,078 123% 50% 10% 156 40% 9% 2% 8%
Delta Air Lines / DAL 10.83 -68% 115% 9,157 19,333 182% 50% n/m 448 27% 7% -3% -55%
XO Group / XOXO 9.69 -53% 232% 278 200 62% 50% 38% 205 80% 9% 5% 75%
Fairpoint Comms / FRP 4.43 -29% 476% 116 1,111 94% 49% 34% 259 52% -14% 0% 2%
Gap / GPS 22.72 -59% 16% 11,094 11,335 129% 49% 23% 109 38% 11% 11% 33%
MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, TTM = trailing twelve months, Cap. Empl. = capital employed.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Top 100, by Tangible Book Value to Market Value
Trading Data Public Market Valuation Operating Performance Tang.
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM Tang. Rev./ % TTM Revenue 5-Yr.
Equity/
relevant websites) Price 7-Year Value Value Rev./ GP/ Book/ Empl. Gross Adj. Op. Tang.
($) Low High ($mn) ($mn) EV EV MV ($000) Profit EBIT Margin Assets
Dynegy / DYN 1.41 -2% 3783% 173 4,505 40% 15% >999% 1,184 38% -16% 2% 22%
RAIT Financial / RAS 5.69 -76% 1917% 235 1,954 12% 5% 386% 578 38% 6% -26% 31%
Royal Bank Scotland / RBS 8.85 -68% 2435% 25,856 n/m n/m n/m 384% 230 n/m 30% 21% 4%
Genworth Financial / GNW 9.22 -92% 303% 4,526 n/m n/m n/m 325% 1,616 16% 23% n/m 13%
GenOn / GEN 2.28 -11% 1246% 1,760 3,686 89% -6% 291% 939 -7% 8% 15% 44%
CNO Financial / CNO 7.35 -96% 253% 1,788 n/m n/m n/m 277% 1,128 24% 35% 3% 15%
Pinnacle Airlines / PNCL 1.36 -47% 1396% 26 745 165% 34% 271% 188 20% 3% 9% 5%
Symetra Financial / SYA 10.08 -25% 44% 1,196 n/m n/m n/m 260% 1,817 16% 20% 11% 11%
Frozen Food Express / FFEX 1.23 -11% 1061% 22 58 678% 336% 250% 171 50% -7% -2% 37%
iStar Financial / SFI 6.93 -90% 663% 659 6,437 7% 1% 237% 2,367 11% -68% -32% 20%
Presidential Life / PLFE 11.70 -51% 125% 346 n/m n/m n/m 231% 2,618 66% 61% 10% 20%
Hartford Financial / HIG 21.65 -85% 391% 9,580 n/m n/m n/m 223% 816 24% 39% -6% 7%
AbitibiBowater / ABH 15.49 -12% 97% 1,566 1,818 262% 64% 217% 453 25% 5% -3% 54%
Marriott Vacations / VAC 22.79 -31% 2% 768 1,576 102% 86% 215% 162 84% 9% n/m 52%
TravelCenters / TA 5.37 -82% 783% 155 119 >999% 848% 199% 496 13% 0% -1% 31%
MedCath / MDTH 7.88 -28% 339% 160 53 610% 474% 193% 194 78% 0% -1% 77%
WPX Energy / WPX 18.87 -25% 24% 3,707 3,657 108% 87% 187% 3,687 80% 48% n/m 68%
Popular / BPOP 1.68 -40% 1607% 1,722 n/m n/m n/m 183% 234 n/m 26% 19% 9%
Am. Independence / AMIC 4.51 -55% 230% 38 n/m n/m n/m 183% 1,685 45% 4% 3% 64%
Cemex / CX 8.52 -73% 317% 8,630 7,830 182% 51% 176% 311 28% 6% 8% 35%
GeoMet / GMET 0.74 -28% 1507% 30 138 23% 11% 170% 442 48% 10% n/m 29%
Cowen / COWN 2.78 -17% 685% 321 n/m n/m n/m 169% 462 68% -40% -32% 32%
AIG / AIG 27.23 -80% 4420% 51,716 n/m n/m n/m 166% 1,088 14% 16% n/m 16%
Republic / RJET 5.72 -57% 317% 276 2,461 114% 31% 164% 286 27% 3% 15% 11%
Aspen Insurance / AHL 27.79 -51% 17% 1,964 n/m n/m n/m 161% 3,066 8% 12% 14% 33%
Ashford Hospitality / AHT 8.95 -90% 60% 609 2,819 31% 9% 160% 13,099 29% 9% 8% 27%
Capital Southwest / CSWC 92.33 -42% 106% 347 n/m n/m n/m 159% 836 n/m 34% 51% 99%
American Capital / ACAS 8.89 -95% 322% 2,926 n/m n/m n/m 156% 2,383 85% 51% 41% 77%
Bank of America / BAC 8.02 -68% 587% 81,290 n/m n/m n/m 155% 233 n/m 28% 25% 6%
CFS Bancorp / CITZ 6.29 -73% 141% 68 n/m n/m n/m 151% 144 n/m -19% 44% 9%
CNA Financial / CNA 28.73 -78% 81% 7,736 n/m n/m n/m 151% 1,118 23% 39% 7% 21%
Assured Guaranty / AGO 17.52 -85% 83% 3,193 n/m n/m n/m 149% 4,856 74% 76% n/m 26%
Citigroup / C 32.92 -71% 1631% 96,255 n/m n/m n/m 149% 273 n/m 45% 29% 8%
Dover Downs Gaming / DDE 2.39 -16% 762% 77 128 188% 36% 145% 222 19% 5% 11% 52%
Bank of Ireland / IRE 7.56 -47% >9999% 5,543 n/m n/m n/m 145% 464 n/m -12% 36% 4%
XL Group / XL 19.94 -87% 330% 6,295 n/m n/m n/m 145% 1,873 19% 37% 2% 20%
Coca-Cola FEMSA / KOF 99.97 -78% 3% 4,101 4,385 199% 91% 144% 128 46% 15% 15% 60%
MVC Capital / MVC 12.53 -51% 60% 300 n/m n/m n/m 140% n/m n/m 5% 9% 84%
Endurance Specialty / ENH 40.22 -52% 26% 1,733 n/m n/m n/m 139% 2,434 -13% 9% 15% 30%
Old Republic / ORI 10.64 -36% 123% 2,759 n/m n/m n/m 137% 581 8% -4% -6% 24%
Mercantile Bank / MBWM 12.73 -78% 244% 110 n/m n/m n/m 132% 300 n/m 16% 27% 10%
Skechers / SKX 13.04 -60% 244% 651 437 368% 143% 130% 638 39% -6% 4% 66%
Northeast Bancorp / NBN 14.29 -58% 71% 47 n/m n/m n/m 129% 112 n/m 11% 47% 10%
Flagstone Re / FSR 9.24 -31% 59% 647 n/m n/m n/m 128% 1,932 -12% -4% 20% 29%
China Yuchai / CYD 16.55 -85% 102% 617 640 384% 92% 128% 220 24% 11% 8% 27%
MGIC Investment / MTG 4.74 -85% 1434% 954 n/m n/m n/m 126% 1,489 -25% -25% -69% 17%
SI Financial / SIFI 10.12 -67% 53% 107 n/m n/m n/m 121% 160 n/m 41% 53% 14%
Loews Corp. / L 38.30 -55% 40% 15,190 n/m n/m n/m 119% 768 54% 61% 15% 24%
Synovus Financial / SNV 1.99 -53% 844% 1,563 n/m n/m n/m 118% 216 n/m 10% 9% 7%
Westell Technologies / WSTL 2.42 -99% 225% 160 18 590% 187% 118% 296 32% 5% -1% 93%

Value-oriented Equity Investment Ideas for Sophisticated Investors

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Trading Data Public Market Valuation Operating Performance Tang.
(Click data to visit Stock ∆ to Reach Market Enter. TTM TTM Tang. Rev./ % TTM Revenue 5-Yr.
Equity/
relevant websites) Price 7-Year Value Value Rev./ GP/ Book/ Empl. Gross Adj. Op. Tang.
($) Low High ($mn) ($mn) EV EV MV ($000) Profit EBIT Margin Assets
Valero Energy / VLO 24.99 -44% 215% 13,988 18,807 670% 55% 117% 6,299 8% 3% 3% 40%
Nam Tai Electronics / NTE 5.92 -53% 379% 265 112 535% 42% 117% 103 8% 1% 1% 70%
BioFuel Energy / BIOF 0.64 -77% 1770% 78 251 251% 2% 115% 4,232 1% -1% n/m 30%
Banner Corp. / BANR 20.43 -47% 1500% 352 n/m n/m n/m 115% 195 n/m 6% 40% 10%
Transatlantic / TRH 57.89 -55% 32% 3,569 n/m n/m n/m 114% 6,819 0% 0% 8% 26%
Axis Capital / AXS 32.66 -47% 33% 4,265 n/m n/m n/m 114% 3,801 14% 18% 19% 27%
White Mountains / WTM 481.00 -70% 48% 3,645 n/m n/m n/m 112% 530 -11% 24% 0% 29%
Taylor Capital / TAYC 13.57 -81% 218% 277 n/m n/m n/m 111% 308 n/m 23% 13% 7%
NewStar Financial / NEWS 10.33 -94% 102% 509 n/m n/m n/m 111% 1,315 n/m 51% 27% 29%
Suffolk Bancorp / SUBK 12.72 -41% 285% 124 n/m n/m n/m 110% 210 n/m -5% 67% 9%
Howard Hughes / HHC 54.91 -44% 40% 2,083 2,498 10% 5% 109% 1,559 51% n/m n/m 66%
Quicksilver Resource / KWK 6.02 -38% 647% 1,032 3,105 31% 27% 108% 2,125 88% 79% 23% 30%
Katy Industries / KT 14.33 -31% 111% 7,494 13,851 126% 102% 108% 560 81% 9% 9% 36%
NRG Energy / NRG 17.50 -18% 170% 4,024 12,434 70% 20% 108% 1,765 29% 11% 25% 20%
Goldman Sachs / GS 115.91 -59% 116% 57,064 n/m n/m n/m 108% 1,060 67% 17% -4% 7%
Millipore / MIL 8.12 -52% 240% 508 251 179% 37% 108% 663 21% 10% 8% 64%
PennyMac Mortgage / PMT 17.95 -68% 11% 510 n/m n/m n/m 107% 554 95% 70% n/m 39%
Ingram Micro / IM 19.52 -56% 15% 2,994 2,495 >999% 76% 107% 2,321 5% 1% 1% 35%
Validus / VR 31.54 -60% 11% 3,124 n/m n/m n/m 106% 4,145 18% 23% 23% 44%
Crexus Investment / CXS 11.31 -29% 30% 867 n/m n/m n/m 106% n/m 95% 80% n/m 97%
MBIA / MBI 11.41 -81% 566% 2,204 n/m n/m n/m 105% 1,209 24% 34% n/m 8%
Alleghany / Y 301.00 -42% 37% 2,578 2,787 33% 0% 105% 1,287 n/m 66% 27% 43%
Gastar Exploration / GST 3.08 -87% 871% 199 202 18% 0% 104% 997 n/m -7% n/m 69%
UTStarcom / UTSI 1.48 -57% 1434% 231 -75 n/m n/m 104% 165 30% -3% -22% 39%
Sun Bancorp NJ / SNBC 2.96 -29% 565% 253 n/m n/m n/m 104% 203 n/m -50% 31% 8%
Hallmark / HALL 6.99 -28% 152% 135 n/m n/m n/m 103% 909 25% -5% 9% 21%
Sonde Resources / SOQ 2.59 -71% 856% 161 147 24% 13% 103% 1,017 53% -35% n/m 70%
Investors Title / ITIC 47.60 -64% 17% 101 n/m n/m n/m 103% 498 42% 12% 10% 67%
Cedar Shopping / CDR 4.97 -70% 271% 338 1,390 10% 7% 103% 1,378 67% 28% 33% 22%
SunTrust Banks / STI 22.69 -74% 315% 12,185 n/m n/m n/m 103% 212 n/m 24% 33% 7%
CIT Group / CIT 41.33 -40% 20% 8,293 n/m n/m n/m 102% 644 n/m 129% -34% 19%
E.W. Scripps / SSP 9.17 -93% 34% 502 354 212% 138% 102% 163 65% 2% -18% 71%
Alliance One / AOI 3.20 -38% 281% 280 1,433 132% 18% 102% 573 14% 7% 7% 14%
E*Trade Financial / ETFC 9.35 -37% 2869% 2,667 n/m n/m n/m 102% 757 48% 16% -30% 6%
Everest Re / RE 90.00 -39% 29% 5,981 n/m n/m n/m 102% 4,824 -36% -4% 10% 32%
Regions Financial / RF 6.00 -61% 553% 7,553 n/m n/m n/m 101% 159 n/m 12% 25% 6%
Richardson Electron. / RELL 12.34 -80% 25% 209 48 336% 99% 101% 546 29% 3% -4% 84%
Redwood Trust / RWT 12.18 -26% 447% 958 5,385 4% 2% 100% 3,230 58% 29% -26% 17%
State Auto Financial / STFC 15.03 -33% 166% 605 n/m n/m n/m 99% 626 n/m -7% 0% 21%
Capitol Federal / CFFN 11.73 -13% 94% 1,965 n/m n/m n/m 98% 513 n/m 63% 38% 20%
RadioShack / RSH 7.88 -18% 344% 787 785 548% 238% 97% 123 43% 5% 7% 35%
White River Capital / RVR 21.00 -81% 32% 74 n/m n/m n/m 97% 284 n/m 47% 75% 46%
Annaly / NLY 16.66 -40% 27% 16,163 100,821 4% 2% 96% 31,400 62% 55% 32% 14%
First Indust. Realty / FR 12.10 -85% 318% 1,048 2,514 10% 7% 94% 1,416 68% 23% -29% 37%
Baldwin & Lyons / BWINB 21.99 -36% 35% 330 n/m n/m n/m 94% 802 14% 14% 18% 37%
Bancorp / TBBK 8.43 -75% 262% 280 n/m n/m n/m 94% 229 n/m 16% 57% 9%
Constellation Energy / CEG 36.40 -64% 197% 7,337 11,622 115% 13% 92% 1,764 11% 5% -1% 35%
EXCO Resources / XCO 7.64 -47% 436% 1,641 3,297 22% 18% 92% 766 85% 3% -25% 41%
Louisiana-Pacific / LPX 8.07 -87% 269% 1,100 1,489 91% 8% 92% 357 8% -10% -20% 47%
Am. Capital Agency / AGNC 30.37 -60% 3% 6,807 54,029 2% 2% 91% n/m 74% 68% n/m 11%
MV = market value, EV = enterprise value, Rev. = revenue, GP = gross profit, NI = net income, TTM = trailing twelve months, Cap. Empl. = capital employed.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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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 19.89 -31% 107% 862 507 .1x 64% infinite 31% n/m 1% 21 / 11
2 * Daily Journal DJCO 73.75 -15% 8% 102 23 .7x 44% infinite 34% 1.4x <1% - / -
3 PDL BioPharma PDLI 6.29 -26% 7% 880 1,140 3.1x 30% infinite 35% n/m <1% 4 / -
4 ITT Educational ESI 75.52 -34% 26% 2,014 1,786 1.2x 28% infinite 39% >9.9x <1% 10 / 9
5 Bridgepoint Edu. BPI 26.37 -40% 16% 1,361 1,112 1.2x 25% infinite 38% 4.3x <1% 6 / 6
6 Career Education CECO 11.62 -46% 138% 881 434 .2x 71% 493% 34% 1.9x <1% - / 5
7 Vonage VG 2.45 -17% 120% 553 582 .7x 20% infinite n/m 2.3x 13% 9 / 2
8 Global Sources GSOL 4.93 -2% 159% 167 78 .4x 39% 271% 5% 1.6x <1% - / -
9 Apollo Group APOL 52.75 -30% 11% 6,667 5,580 1.2x 19% 1214% 45% 6.6x 3% 8 / 13
10 ePlus PLUS 33.03 -32% 3% 264 233 .2x 17% infinite 41% 1.4x 9% 6 / 6
11 Dell DELL 18.16 -27% 1% 32,625 27,048 .4x 17% infinite 18% >9.9x <1% 4 / 6
12 DepoMed DEPO 6.68 -37% 53% 370 261 1.8x 17% infinite n/m 3.1x <1% 3 / -
13 Veeco Instruments VECO 29.42 -31% 96% 1,139 650 .7x 43% 171% 30% 1.6x <1% 3 / 4
14 General Motors GM 27.34 -31% 34% 42,775 34,851 .2x 20% 313% n/m n/m <1% 18 / 17
15 USA Mobility USMO 14.79 -17% 20% 327 315 1.3x 19% 381% n/m 4.9x 1% 6 / -
16 United Online UNTD 5.60 -14% 30% 499 648 .7x 16% infinite 32% n/m 1% - / 4
17 * Astex Pharma ASTX 2.01 -25% 67% 187 61 1.0x 16% infinite n/m 2.2x <1% 1 / -
18 Exelis XLS 10.41 -21% 30% 1,922 2,507 .4x 25% 194% 35% n/m <1% 20 / 1
19 Forest Labs FRX 32.03 -11% 27% 8,505 6,060 1.3x 24% 202% 23% 2.8x 1% 18 / 11
20 CTC Media CTCM 10.24 -21% 136% 1,611 1,479 2.0x 18% 289% 33% 7.7x <1% 2 / 1
21 * Travelzoo TZOO 24.99 -17% 315% 399 360 2.4x 15% infinite 78% >9.9x <1% - / -
22 Capella Education CPLA 41.93 -38% 40% 582 455 1.1x 18% 257% 37% 4.2x <1% 2 / -
23 Nova Measuring NVMI 8.68 -41% 36% 228 141 1.4x 17% 229% n/m 2.3x <1% - / -
24 * AmerisourceBergen ABC 36.68 -6% 19% 9,457 9,016 .1x 14% infinite 38% n/m <1% 5 / 2
25 Spirit Airlines SAVE 19.83 -49% 1% 1,438 1,087 1.0x 14% infinite 38% 3.2x 1% 2 / 10
26 Argan AGX 15.55 -47% 13% 212 74 .6x 14% infinite 43% 2.8x <1% - / -
27 C&J Energy CJES 20.99 -40% 57% 1,089 1,042 1.4x 25% 123% 35% 3.6x <1% - / 1
28 DeVry DV 37.67 -13% 77% 2,500 2,212 1.0x 19% 163% 32% 4.8x 2% 20 / 12
29 Nevsun Resources NSU 3.91 -5% 87% 778 551 1.5x 50% 110% 38% 1.7x <1% - / -
30 * Raytheon RTN 49.86 -23% 7% 17,257 17,862 .7x 16% 237% 29% n/m <1% 1 / 5
31 GameStop GME 23.18 -21% 24% 3,162 2,844 .3x 23% 120% 35% 5.0x 2% 16 / 3
32 * Terra Nitrogen TNH 206.75 -51% 16% 3,825 3,670 4.6x 14% 684% n/m >9.9x <1% 3 / 3
33 Cray CRAY 7.92 -37% 2% 287 199 .5x 20% 133% 5% 2.2x 4% 7 / 1
34 Vista Gold Corp. VGZ 3.48 -28% 32% 249 221 n/m 26% 113% 39% 1.7x 2% 7 / 6
35 * Korn/Ferry KFY 16.52 -32% 45% 789 571 .7x 17% 170% 35% 1.9x <1% 7 / -
36 Almost Family AFAM 20.22 -38% 95% 189 162 .5x 23% 118% 40% 3.8x 3% - / 5
37 AmSurg AMSG 26.18 -27% 7% 821 1,212 1.6x 20% 121% 16% n/m 2% 6 / 7
38 * SanDisk SNDK 47.79 -33% 12% 11,484 10,240 1.8x 15% 245% 33% 1.7x <1% 9 / 9
39 Deluxe DLX 25.29 -31% 16% 1,285 1,998 1.4x 14% 430% 33% n/m <1% 6 / 4
40 Metropolitan Health MDF 8.63 -56% 3% 378 315 .8x 14% 405% 39% 4.6x 3% 6 / 5
41 * Northrop Grumman NOC 60.08 -18% 18% 15,178 16,124 .6x 20% 118% 32% n/m <1% 14 / 3
42 STR Holdings STRI 8.20 -13% 142% 341 212 .7x 32% 97% 30% 3.2x 1% 7 / -
43 * Activision Blizzard ATVI 12.23 -15% 18% 13,994 10,469 2.2x 13% infinite 18% 5.0x <1% 5 / 9
44 * H&R Block HRB 16.20 -23% 11% 4,745 5,277 1.5x 13% infinite 37% >9.9x <1% 12 / 5
45 * IntegraMed America INMD 10.44 -36% 6% 124 77 .3x 13% infinite 39% 4.0x 4% 7 / 2
 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


Value-oriented Equity Investment Ideas for Sophisticated Investors

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“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 6.68 -37% 53% 370 261 1.8x 18% infinite n/m 3.1x <1% 3 / -
2 * Vonage VG 2.45 -17% 120% 553 582 .7x 16% infinite n/m 2.3x 13% 9 / 2
3 GT Solar GTAT 9.56 -33% 83% 1,145 938 1.1x 16% infinite 34% >9.9x <1% 7 / 7
4 Career Education CECO 11.62 -46% 138% 881 434 .2x 19% 493% 34% 1.9x <1% - / 5
5 Global Sources GSOL 4.93 -2% 159% 167 78 .4x 17% 271% 5% 1.6x <1% - / -
6 Dell DELL 18.16 -27% 1% 32,625 27,048 .4x 12% infinite 18% >9.9x <1% 4 / 6
7 Medley Capital MCC 11.08 -22% 11% 192 191 8.4x 11% infinite n/m .9x <1% 3 / -
8 Bridgepoint Edu. BPI 26.37 -40% 16% 1,361 1,112 1.2x 11% infinite 38% 4.3x <1% 6 / 6
9 ITT Educational ESI 75.52 -34% 26% 2,014 1,786 1.2x 11% infinite 39% >9.9x <1% 10 / 9
10 * Majesco COOL 2.69 -53% 68% 111 98 .8x 13% 169% 5% 4.8x 3% 5 / 6
11 C&J Energy CJES 20.99 -40% 57% 1,089 1,042 1.4x 20% 123% 35% 3.6x <1% - / 1
12 Forest Labs FRX 32.03 -11% 27% 8,505 6,060 1.3x 12% 202% 23% 2.8x 1% 18 / 11
13 Portfolio Recovery PRAA 69.64 -18% 31% 1,192 1,387 3.0x 10% infinite 40% 2.3x 2% 6 / 6
14 * Nevsun Resources NSU 3.91 -5% 87% 778 551 1.5x 19% 110% 38% 1.7x <1% - / -
15 GameStop GME 23.18 -21% 24% 3,162 2,844 .3x 12% 120% 35% 5.0x 2% 16 / 3
16 Spirit Airlines SAVE 19.83 -49% 1% 1,438 1,087 1.0x 10% infinite 38% 3.2x 1% 2 / 10
17 * Vista Gold VGZ 3.48 -28% 32% 249 221 n/m 13% 113% 39% 1.7x 2% 7 / 6
18 CTC Media CTCM 10.24 -21% 136% 1,611 1,479 2.0x 10% 289% 33% 7.7x <1% 2 / 1
19 Medicines MDCO 21.00 -41% 7% 1,138 831 1.8x 10% 544% n/m 3.0x <1% 3 / 4
20 Delphi Automotive DLPH 31.29 -39% 1% 10,271 11,011 .7x 12% 125% 20% 9.4x <1% - / -
21 H&R Block HRB 16.20 -23% 11% 4,745 5,277 1.5x 9% infinite 37% >9.9x <1% 12 / 5
22 SanDisk SNDK 47.79 -33% 12% 11,484 10,240 1.8x 10% 245% 33% 1.7x <1% 9 / 9
23 Almost Family AFAM 20.22 -38% 95% 189 162 .5x 11% 118% 40% 3.8x 3% - / 5
24 Cisco Systems CSCO 20.29 -34% 1% 109,076 79,238 1.8x 9% infinite 19% 3.6x <1% 20 / 12
25 Datalink Corp. DTLK 9.10 -37% 26% 162 127 .3x 10% 155% 42% 3.4x 2% 3 / 3
26 DeVry DV 37.67 -13% 77% 2,500 2,212 1.0x 10% 163% 32% 4.8x 2% 20 / 12
27 CF Industries CF 178.84 -36% 8% 11,694 11,886 1.9x 13% 84% 35% 5.5x <1% 4 / 7
28 Microsoft MSFT 31.25 -24% 1% 262,212 222,408 3.1x 9% 1015% 16% 6.3x 6% 15 / 12
29 Apple AAPL 502.12 -38% 5% 468,162 438,006 3.4x 9% infinite 25% 5.5x <1% 15 / 8
30 TRW Automotive TRW 48.56 -41% 25% 6,010 6,301 .4x 13% 74% n/m 6.8x <1% 2 / 2
31 Power-One PWER 5.14 -28% 81% 536 367 .4x 11% 91% 31% 1.4x 2% 3 / 5
32 j2 Global Comms JCOM 30.21 -17% 8% 1,433 1,255 3.8x 8% infinite 16% 8.1x 4% 2 / 4
33 * Osiris Therapeutics OSIR 4.91 -16% 71% 161 109 2.6x 8% infinite n/m 4.0x 29% - / 1
34 * JDA Software JDAS 26.82 -18% 31% 1,141 1,129 1.7x 9% 191% 15% 3.4x 4% 1 / 9
35 USANA Health USNA 38.02 -39% 2% 569 518 .9x 9% 141% 34% 5.0x 54% 7 / 8
36 * Vertex Pharma VRTX 39.24 -32% 50% 8,184 7,615 5.4x 8% infinite 32% >9.9x <1% 12 / 9
37 * STR Holdings STRI 8.20 -13% 142% 341 212 .7x 10% 97% 30% 3.2x 1% 7 / -
38 Oracle ORCL 28.79 -14% 27% 144,694 128,460 3.5x 8% infinite 25% >9.9x 22% 6 / 4
39 * United Therapeutics UTHR 47.27 -23% 50% 2,758 2,380 3.2x 10% 104% 27% 2.6x <1% 4 / 3
40 Kulicke and Soffa KLIC 11.46 -41% 11% 845 548 .7x 10% 95% 21% 2.0x 2% 12 / 8
41 Amdocs DOX 30.68 -17% 4% 5,251 4,326 1.3x 9% 169% 12% 4.9x <1% - / -
42 Lear LEA 46.13 -23% 22% 4,720 3,662 .3x 11% 70% 11% 2.4x <1% 8 / 8
43 Darling DAR 15.84 -29% 24% 1,854 2,136 1.3x 10% 93% 37% >9.9x 1% 6 / 6
44 * Medidata MDSO 18.93 -26% 43% 469 367 2.0x 8% infinite n/m 7.9x 9% 4 / 5
45 * Actuate BIRT 6.37 -28% 6% 310 243 1.8x 8% infinite 39% 5.2x 5% 6 / 5
 Company website SEC Y! Price Charts Proxy Y!


* New additions are highlighted. Criteria: ► MV > $100 million ► ADRs, banks excluded ► EV to MV < 1.5 ► China RTOs excluded


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 160 of 169
“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 * Vonage VG 2.45 -17% 120% 553 582 .7x 19% infinite n/m 2.3x 13% 9 / 2
2 GT Solar GTAT 9.56 -33% 83% 1,145 938 1.1x 17% infinite 34% >9.9x <1% 7 / 7
3 Global Sources GSOL 4.93 -2% 159% 167 78 .4x 18% 271% 5% 1.6x <1% - / -
4 Medley Capital MCC 11.08 -22% 11% 192 191 8.4x 12% infinite n/m .9x <1% 3 / -
5 Portfolio Recovery PRAA 69.64 -18% 31% 1,192 1,387 3.0x 12% infinite 40% 2.3x 2% 6 / 6
6 Spirit Airlines SAVE 19.83 -49% 1% 1,438 1,087 1.0x 12% infinite 38% 3.2x 1% 2 / 10
7 C&J Energy CJES 20.99 -40% 57% 1,089 1,042 1.4x 22% 123% 35% 3.6x <1% - / 1
8 * Majesco COOL 2.69 -53% 68% 111 98 .8x 13% 169% 5% 4.8x 3% 5 / 6
9 Dell DELL 18.16 -27% 1% 32,625 27,048 .4x 11% infinite 18% >9.9x <1% 4 / 6
10 GameStop GME 23.18 -21% 24% 3,162 2,844 .3x 14% 120% 35% 5.0x 2% 16 / 3
11 Delphi Automotive DLPH 31.29 -39% 1% 10,271 11,011 .7x 13% 125% 20% 9.4x <1% - / -
12 SanDisk SNDK 47.79 -33% 12% 11,484 10,240 1.8x 12% 245% 33% 1.7x <1% 9 / 9
13 Bridgepoint Edu. BPI 26.37 -40% 16% 1,361 1,112 1.2x 11% infinite 38% 4.3x <1% 6 / 6
14 Kulicke and Soffa KLIC 11.46 -41% 11% 845 548 .7x 14% 95% 21% 2.0x 2% 12 / 8
15 H&R Block HRB 16.20 -23% 11% 4,745 5,277 1.5x 10% infinite 37% >9.9x <1% 12 / 5
16 CTC Media CTCM 10.24 -21% 136% 1,611 1,479 2.0x 11% 289% 33% 7.7x <1% 2 / 1
17 * InfoSpace INSP 12.37 -37% 5% 488 194 .8x 10% infinite n/m 1.6x 1% 5 / 6
18 ITT Educational ESI 75.52 -34% 26% 2,014 1,786 1.2x 10% infinite 39% >9.9x <1% 10 / 9
19 Power-One PWER 5.14 -28% 81% 536 367 .4x 13% 91% 31% 1.4x 2% 3 / 5
20 TRW Automotive TRW 48.56 -41% 25% 6,010 6,301 .4x 14% 74% n/m 6.8x <1% 2 / 2
21 Metropolitan Health MDF 8.63 -56% 3% 378 315 .8x 10% 405% 39% 4.6x 3% 6 / 5
22 Cisco Systems CSCO 20.29 -34% 1% 109,076 79,238 1.8x 10% infinite 19% 3.6x <1% 20 / 12
23 * United Therapeutics UTHR 47.27 -23% 50% 2,758 2,380 3.2x 11% 104% 27% 2.6x <1% 4 / 3
24 Apple AAPL 502.12 -38% 5% 468,162 438,006 3.4x 9% infinite 25% 5.5x <1% 15 / 8
25 Microsoft MSFT 31.25 -24% 1% 262,212 222,408 3.1x 10% 1015% 16% 6.3x 6% 15 / 12
26 * Actuate BIRT 6.37 -28% 6% 310 243 1.8x 9% infinite 39% 5.2x 5% 6 / 5
27 USANA Health USNA 38.02 -39% 2% 569 518 .9x 10% 141% 34% 5.0x 54% 7 / 8
28 * JDA Software JDAS 26.82 -18% 31% 1,141 1,129 1.7x 10% 191% 15% 3.4x 4% 1 / 9
29 Lear LEA 46.13 -23% 22% 4,720 3,662 .3x 12% 70% 11% 2.4x <1% 8 / 8
30 TransGlobe Energy TGA 10.71 -37% 48% 784 737 3.2x 16% 58% 52% 2.8x <1% - / -
31 * Gilead Sciences GILD 47.00 -27% 20% 35,304 25,340 3.0x 9% 189% 24% 7.4x <1% 8 / 7
32 CF Industries CF 178.84 -36% 8% 11,694 11,886 1.9x 11% 84% 35% 5.5x <1% 4 / 7
33 Amdocs DOX 30.68 -17% 4% 5,251 4,326 1.3x 9% 169% 12% 4.9x <1% - / -
34 * Teradyne TER 17.01 -39% 13% 3,131 2,623 1.8x 10% 95% n/m 4.2x <1% 9 / 9
35 Oracle ORCL 28.79 -14% 27% 144,694 128,460 3.5x 9% infinite 25% >9.9x 22% 6 / 4
36 ePlus PLUS 33.03 -32% 3% 264 233 .2x 9% infinite 41% 1.4x 9% 6 / 6
37 Lexmark LXK 37.91 -32% 3% 2,851 2,351 .6x 12% 62% 22% 2.8x 1% 19 / 6
38 Jazz Pharma JAZZ 47.21 -53% 9% 2,653 2,540 10.5x 9% infinite n/m >9.9x 3% 18 / 16
39 Kronos Worldwide KRO 22.83 -38% 51% 2,646 2,892 1.5x 13% 56% 37% 3.0x <1% 4 / -
40 DeVry DV 37.67 -13% 77% 2,500 2,212 1.0x 9% 163% 32% 4.8x 2% 20 / 12
41 j2 Global Comms JCOM 30.21 -17% 8% 1,433 1,255 3.8x 9% infinite 16% 8.1x 4% 2 / 4
42 SAIC SAI 12.97 -15% 36% 4,426 4,815 .4x 11% 70% 48% >9.9x <1% 5 / 1
43 HollyFrontier HFC 33.21 -36% 17% 6,949 6,457 .5x 13% 55% 36% 2.7x 1% 20 / 11
44 * Life Technologies LIFE 45.92 -23% 23% 8,183 10,050 2.7x 9% 109% 23% 1.8x <1% 9 / 5
45 * Vertex Pharma VRTX 39.24 -32% 50% 8,184 7,615 5.4x 9% infinite 32% >9.9x <1% 12 / 9
 Company website SEC Y! Price Charts Proxy Y!


* New additions are highlighted. Criteria: ► MV > $100 million ► ADRs, banks excluded ► EV to MV < 1.5 ► China RTOs excluded


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 161 of 169
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) 2005 2010 2011 Revenue Book P/E Own. Sells
1 Build-A-Bear BBW 5.96 104 58 -80% -22% -30% .1x 1.1x 10x 5% 8 / 2
2 * Nevsun Resources NSU 3.91 778 551 116% -48% -29% 1.5x 1.7x 16x <1% - / -
3 WebMD Health WBMD 27.45 1,564 1,263 -6% -46% -27% 2.2x 3.6x 60x 2% 12 / 4
4 * CARBO Ceramics CRR 90.92 2,101 2,061 61% -12% -26% 3.3x 3.7x 11x 3% 6 / 6
5 IPC The Hospitalist IPCM 35.05 576 544 n/m -10% -23% 1.2x 16.0x 18x 2% 6 / 3
6 Marchex MCHX 4.80 179 142 -79% -50% -23% 1.0x 2.7x 15x 9% 4 / 6
7 * True Religion TRLG 26.88 685 485 75% 21% -22% 1.2x 2.3x 12x 3% - / 6
8 * ArthroCare ARTC 25.00 690 547 -41% -20% -21% 1.5x 3.8x 14x <1% 2 / 2
9 Questcor Pharma QCOR 33.53 2,103 1,938 3124% 128% -19% 11.3x 12.4x 17x <1% 5 / 7
10 * OPNET Technologies OPNT 29.71 670 573 223% 11% -19% 3.4x 6.8x 25x 34% 5 / 3
11 * RadioShack RSH 7.88 787 785 -63% -57% -19% .2x 1.0x 10x <1% 1 / -
12 Higher One ONE 15.10 858 811 n/m -25% -18% 4.6x 9.4x 13x 6% 3 / 6
13 * RealPage RP 20.71 1,487 1,486 n/m -33% -18% 5.8x n/m 31x 36% 4 / 10
14 JDA Software JDAS 26.82 1,141 1,129 58% -4% -17% 1.7x 3.4x 10x 4% 1 / 9
15 Electronic Arts EA 17.47 5,789 4,532 -67% 7% -15% 1.2x 39.4x 15x <1% 10 / 7
16 * Silicon Graphics SGI 9.75 309 216 -66% 8% -15% .3x 2.7x 17x 1% 10 / 6
17 * Barrett Business BBSI 17.19 170 104 -31% 11% -14% .3x 3.2x 13x 26% 1 / 2
18 CEVA CEVA 26.27 618 479 320% 28% -13% 8.0x 3.8x 21x <1% 5 / 5
19 * PMFG PMFG 16.98 344 343 288% 4% -13% 2.5x 10.2x 51x 2% - / 11
20 * Medidata MDSO 18.93 469 367 n/m -21% -13% 2.0x 7.9x 15x 9% 4 / 5
21 * iRobot IRBT 26.00 703 519 -22% 5% -13% 1.1x 2.9x 22x 4% 9 / 11
22 * TASER International TASR 4.49 250 219 -35% -4% -12% 2.4x 2.7x 50x 3% 5 / -
23 * Monster Worldwide MWW 6.99 860 799 -83% -70% -12% .8x n/m 16x 3% 4 / 2
24 * NutriSystem NTRI 11.42 321 279 -68% -46% -12% .7x 4.1x 12x 3% - / 2
25 * ShoreTel SHOR 5.64 272 156 n/m -28% -12% .7x 2.5x 27x 2% 9 / 3
26 CoStar Group CSGP 59.45 1,506 952 38% 3% -11% 3.9x 2.7x 54x 4% 7 / 2
27 * First Opportunity Fund FF 11.07 457 298 n/m 11% -11% 1.1x 1.6x 12x 13% 5 / 1
28 * Balchem Corp. BCPC 36.15 1,047 946 309% 7% -11% 3.2x 6.1x 24x 1% 9 / 8
29 Konami KNM 26.79 3,833 3,523 22% 26% -11% 1.1x 2.0x 12x <1% - / -
30 Children’s Place PLCE 47.59 1,184 1,031 -4% -4% -10% .6x 2.0x 13x 2% 11 / 8
31 * Gentex Corp. GNTX 26.55 3,809 3,390 36% -10% -10% 3.3x 3.7x 17x <1% 4 / 7
32 * InterDigital IDCC 39.12 1,780 1,280 114% -6% -10% 4.0x 5.7x 23x 1% 17 / 10
33 * RF Micro Devices RFMD 4.91 1,356 1,218 -9% -33% -9% 1.4x 2.6x 18x 2% 3 / 8
34 AngioDynamics ANGO 13.48 339 209 -47% -12% -9% .9x 1.7x 29x <1% 6 / 1
35 * AeroVironment AVAV 28.70 634 457 n/m 7% -9% 1.4x 2.3x 19x <1% 2 / 3
36 * RTI Biologics RTIX 4.06 226 180 -43% 52% -9% 1.1x 1.4x 18x 1% 12 / -
37 Harvest Natural HNR 6.84 235 169 -23% -44% -7% 62.5x .6x 5x <1% - / -
38 * American Software AMSWA 8.78 231 186 34% 30% -7% 2.0x 4.2x 16x 2% 7 / 6
39 * Spectrum Pharma SPPI 13.60 781 632 222% 98% -7% 3.6x 6.0x 13x 5% 3 / 3
40 * Yahoo! YHOO 15.01 18,617 16,696 -62% -10% -7% 3.3x 2.2x 16x <1% 12 / 4
41 * Rollins ROL 20.70 3,028 2,982 136% 5% -7% 2.5x n/m 25x 3% 7 / 6
42 Boston Beer SAM 101.14 1,288 1,240 305% 6% -7% 2.5x 7.5x 24x 5% 8 / 7
43 Google GOOG 604.64 196,590 156,168 46% 2% -6% 4.1x 4.0x 12x <1% 10 / 9
44 Bristol Myers Squibb BMY 33.12 56,123 53,549 44% 25% -6% 2.5x 7.2x 17x <1% 3 / 3
45 * HealthStream HSTM 17.38 441 411 646% 116% -6% 5.3x 13.6x 56x 24% 5 / 5
 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-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 162 of 169
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 * Alcatel-Lucent ALU 2.45 5,696 5,889 -19.2% .3x 7x n/m -3% <1% - / -
2 * Grupo Aero. Centro OMAB 16.00 686 761 -14.0% 3.6x 18x 1.5x -11% <1% - / -
3 Oritani Financial ORIT 12.99 591 n/m -13.2% n/m 17x 1.2x n/m 6% 10 / 1
4 Ingersoll-Rand IR 40.92 12,774 15,012 -12.5% 1.0x 11x n/m -18% <1% - / -
5 Fox Chase Bancorp FXCB 12.61 164 n/m -11.4% n/m 26x .9x n/m 3% 14 / 2
6 * United Capital UCAP 25.95 193 195 -11.1% 2.2x - 1.2x -1% <1% - / -
7 * Chemed Corp. CHE 62.60 1,245 1,388 -6.9% 1.0x 11x n/m -12% 2% 3 / 3
8 China Cord Blood CO 2.83 208 115 -6.7% 1.9x 10x 1.4x 45% <1% - / -
9 * United Therapeutics UTHR 47.27 2,758 2,380 -6.7% 3.2x 9x 2.6x 14% <1% 4 / 3
10 Xyratex XRTX 17.05 483 350 -6.6% .2x 10x 1.4x 27% <1% - / -
11 * Transatlantic TRH 57.89 3,569 n/m -6.5% n/m 10x .9x n/m <1% 8 / 1
12 Northrop Grumman NOC 60.08 15,178 16,124 -6.2% .6x 9x n/m -6% <1% 14 / 3
13 Domtar UFS 93.99 3,981 4,385 -6.1% .8x 10x 1.5x -10% <1% 2 / 1
14 Devon Energy DVN 74.95 30,280 33,002 -6.0% 2.9x 10x 2.0x -9% <1% 4 / 9
15 Banco Argentaria BBVA 9.13 44,452 n/m -5.9% n/m 8x 1.2x n/m <1% - / -
16 * Amgen AMGN 67.78 53,953 54,740 -5.8% 3.5x 10x 11.5x -1% <1% 14 / 14
17 * Torchmark TMK 48.72 4,967 n/m -5.6% n/m 9x 1.3x n/m 1% 26 / 16
18 * Capella Education CPLA 41.93 582 455 -5.3% 1.1x 12x 4.2x 22% <1% 2 / -
19 * Zimmer Holdings ZMH 61.53 11,025 11,520 -4.8% 2.6x 11x 5.3x -4% <1% 6 / 5
20 FXCM FXCM 10.13 198 n/m -4.3% n/m 11x 6.2x n/m <1% 7 / 1
21 * 1st United Bancorp FUBC 5.98 183 n/m -4.3% n/m 20x 1.1x n/m 1% 2 / -
22 Navigators Group NAVG 47.88 684 n/m -4.1% n/m 16x .9x n/m <1% - / -
23 * ePlus PLUS 33.03 264 233 -4.0% .2x 11x 1.4x 12% 9% 6 / 6
24 HCC Insurance HCC 29.81 3,175 n/m -4.0% n/m 10x 1.3x n/m <1% 3 / -
25 A. Schulman SHLM 26.75 787 883 -4.0% .4x 11x 2.3x -12% 2% 20 / 9
26 Fred’s FRED 14.67 543 531 -3.9% .3x 15x 1.4x 2% 6% 3 / 2
27 * News Corp. NWSA 19.60 49,011 55,033 -3.8% 1.6x 12x 11.8x -12% <1% 13 / 13
28 * White Mountains WTM 481.00 3,645 n/m -3.8% n/m 30x .9x n/m <1% - / -
29 * Cytec Industries CYT 57.60 2,856 3,080 -3.7% 1.0x 12x 4.0x -8% <1% 9 / 5
30 * EnerSys ENS 34.73 1,658 1,811 -3.6% .8x 11x 3.2x -9% 1% 5 / 1
31 RadioShack RSH 7.88 787 785 -3.4% .2x 10x 1.0x 0% <1% 1 / -
32 ConocoPhillips COP 73.36 97,403 114,527 -3.4% .5x 8x 1.6x -18% <1% 4 / 6
33 * BMC Software BMC 39.27 6,449 5,418 -3.4% 2.5x 11x n/m 16% <1% 10 / 10
34 Northwest Bancorp NWBI 12.66 1,234 n/m -3.3% n/m 17x 1.3x n/m 1% 8 / 7
35 Best Buy BBY 25.71 9,007 8,892 -3.3% .2x 7x 3.0x 1% <1% 11 / 2
36 People’s United PBCT 12.78 4,609 n/m -3.2% n/m 13x 1.5x n/m <1% 3 / 13
37 * Expedia EXPE 33.07 4,420 4,331 -3.2% 1.3x 10x n/m 2% <1% 3 / 3
38 * Spansion CODE 13.00 774 961 -3.2% .9x 9x 4.4x -24% <1% 4 / 2
39 Assurant AIZ 44.03 4,056 n/m -3.1% n/m 7x .9x n/m 1% 7 / 10
40 * AstraZeneca AZN 45.18 57,638 55,147 -3.1% 1.6x 7x 24.0x 4% <1% - / -
41 Amdocs DOX 30.68 5,251 4,326 -3.1% 1.3x 11x 4.9x 18% <1% - / -
42 * Cabot CBT 41.00 2,585 3,083 -3.1% 1.0x 11x 1.8x -19% 1% 17 / 3
43 * Qlogic QLGC 17.48 1,725 1,329 -3.0% 2.2x 12x 3.5x 23% <1% 9 / 3
44 * AmerisourceBergen ABC 36.68 9,457 9,016 -3.0% .1x 12x n/m 5% <1% 5 / 2
45 American Greetings AM 14.93 531 680 -3.0% .4x 7x .7x -28% <1% 2 / 2
 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


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 163 of 169
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 16.18 -22% 49% 1,867 1,810 23% 21% 5x 6x 1.0x <1% 6 / -
2 BBVA Banco Frances BFR 6.31 -25% 91% 1,221 n/m 16% 17% 6x 5x 1.6x <1% - / -
3 Am. Capital Mortgage MTGE 21.75 -31% 1% 218 160 5% 15% 6x 6x 1.0x 2% 6 / -
4 Cypress Sharpridge CYS 13.60 -23% 3% 1,519 1,508 17% 15% 7x 7x 1.4x <1% 10 / 2
5 Crexus Investment CXS 11.31 -29% 19% 867 n/m 9% 12% 8x 9x .9x <1% 2 / -
6 PennyMac Mortgage PMT 17.95 -21% 8% 510 n/m 8% 12% 6x 6x .9x <1% 2 / -
7 Medley Capital MCC 11.08 -22% 11% 192 n/m 6% 10% 9x 8x .9x <1% 3 / -
8 BGC Partners BGCP 6.74 -20% 49% 918 n/m 9% 10% 9x 9x 3.1x 11% 7 / 4
9 IDT Corp. IDT 9.27 -8% 85% 211 112 12% 10% 62x 12x 4.0x 11% 5 / 5
10 NGP Capital NGPC 7.79 -26% 30% 169 n/m 9% 9% 10x 11x .8x <1% - / -
11 THL Credit TCRD 12.90 -19% 15% 261 n/m 8% 9% 13x 10x 1.0x <1% 6 / -
12 Diana Containerships DCIX 6.97 -34% 94% 161 112 3% 9% 24x 10x .8x <1% - / -
13 CTC Media CTCM 10.24 -21% 136% 1,611 1,479 9% 9% 10x 9x 7.7x <1% 2 / 1
14 Mesabi Trust MSB 29.87 -37% 41% 392 n/m 8% 8% 11x 11x >9.9x <1% - / -
15 Ellington Financial EFC 19.44 -19% 29% 320 257 8% 8% 7x 7x .9x <1% 4 / -
16 Telecom Argentina TEO 20.00 -16% 35% 2,106 1,639 5% 8% 7x 6x 1.4x <1% - / -
17 * NY Community Banc. NYB 12.95 -14% 46% 5,664 n/m 8% 8% 12x 12x 1.8x 1% 10 / 2
18 * Himax Tech HIMX 1.58 -39% 70% 280 257 15% 8% 10x 8x .8x <1% - / -
19 Westpac Banking WBK 108.60 -18% 28% 66,193 n/m 8% 7% 10x 10x 2.1x <1% - / -
20 Nat’l Australia Bank NABZY 24.48 -19% 24% 54,711 n/m 8% 7% 10x 9x 1.5x <1% - / -
21 First Financial Banc FFBC 17.39 -26% 6% 1,013 n/m 4% 7% 14x 13x 1.7x <1% 15 / 8
22 * Mizuho Financial MFG 3.23 -25% 31% 38,998 n/m 11% 7% 6x 9x .9x <1% - / -
23 Solar Senior SUNS 16.93 -20% 17% 161 125 2% 7% 28x 12x .9x 1% 1 / -
24 Sun Life Financial SLF 20.83 -16% 61% 12,249 n/m 7% 7% 8x 7x 1.5x <1% - / -
25 Banco Argentaria BBVA 9.13 -23% 42% 44,452 n/m 5% 7% 8x 8x 1.2x <1% - / -
26 * RadioShack RSH 7.88 -9% 112% 787 785 3% 6% 8x 10x 1.0x <1% 1 / -
27 AXA AXAHY 16.21 -34% 43% 38,112 n/m 6% 6% 5x 8x 1.2x <1% - / -
28 AstraZeneca AZN 45.18 -9% 16% 57,638 55,147 6% 6% 7x 7x >9.9x <1% - / -
29 Australia and NZ ANZBY 23.24 -24% 15% 62,100 n/m 6% 6% 10x 10x 1.9x <1% - / -
30 NutriSystem NTRI 11.42 -8% 98% 321 279 6% 6% 25x 12x 4.1x 3% - / 2
31 Intersections INTX 13.12 -28% 75% 226 221 5% 6% 14x 14x 4.5x 45% 13 / 9
32 City Telecom CTEL 12.76 -29% 25% 481 428 6% 6% 11x 9x 2.1x <1% - / -
33 Chunghwa Telecom CHT 31.90 -9% 17% 24,854 23,141 6% 6% 17x 17x 2.1x <1% - / -
34 STMicroelectronics STM 6.95 -23% 95% 6,413 5,654 6% 6% 25x 10x 1.1x <1% - / -
35 Telular WRLS 7.89 -32% 12% 128 115 5% 6% 19x 16x 2.6x 3% 5 / 6
36 Rimage RIMG 12.25 -16% 34% 126 11 2% 6% 21x 23x 1.0x 2% 6 / -
37 Mercury General MCY 43.98 -23% 6% 2,414 n/m 5% 6% 16x 16x 1.4x <1% 1 / 3
38 Credit Suisse CS 26.90 -21% 77% 32,154 n/m 3% 6% 11x 8x 1.2x <1% - / -
39 * Federated Investors FII 18.83 -24% 50% 1,954 n/m 5% 5% 12x 11x n/m 4% 7 / 7
40 United Overseas Bank UOVEY 28.05 -20% 24% 22,273 n/m 3% 5% 13x 14x 1.5x <1% - / -
41 * PetMed Express PETS 12.00 -29% 35% 244 192 4% 5% 15x 15x 3.1x <1% - / -
42 World Wrestling Ent. WWE 9.69 -11% 46% 721 560 7% 5% 17x 14x 2.3x <1% 6 / 3
43 Artio Global Invest. ART 4.85 -14% 255% 287 n/m 5% 5% 11x 12x 1.9x 5% 6 / 2
44 * People’s United PBCT 12.78 -18% 9% 4,609 n/m 5% 5% 16x 13x 1.5x <1% 3 / 13
45 * Siliconware SPIL 5.76 -32% 23% 3,652 3,545 8% 5% 36x 24x 1.8x <1% - / -
 Company website SEC Y! Price Charts Proxy Y!



* New additions are highlighted. Criteria: ► Positive net cash ► Positive EPS for this/next FY ► MV > $100 million ► China RTOs excl.


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 164 of 169
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 Winn-Dixie Stores WINN 9.47 -46% 6% 533 425 .06x n/m n/m - .8x 2% 20 / 14
2 Ingram Micro IM 19.52 -21% 11% 2,994 2,495 .07x 10x 8x - .9x <1% 13 / 11
3 Tech Data TECD 55.51 -31% 2% 2,291 1,864 .07x 11x 10x - 1.1x <1% 2 / 6
4 Kelly Services KELYA 16.15 -33% 41% 597 612 .11x 12x 10x 1.2% 1.0x 3% - / 8
5 AmerisourceBergen ABC 36.68 -6% 19% 9,457 9,016 .11x 13x 12x 1.4% n/m <1% 5 / 2
6 World Fuel Services INT 47.16 -37% 2% 3,355 3,496 .11x 17x 16x .3% 4.0x <1% 4 / 7
7 * Sunoco SUN 39.94 -43% 2% 4,266 5,746 .12x 28x 25x 2.0% 4.8x <1% 7 / 4
8 Office Depot ODP 3.26 -46% 83% 914 1,501 .13x n/m 41x - 1.4x <1% 2 / -
9 Unisys UIS 19.89 -31% 107% 862 507 .13x 7x 6x - n/m 1% 21 / 11
10 Cardinal Health CAH 41.52 -10% 13% 14,353 15,108 .14x 13x 12x 2.1% 8.5x <1% 11 / 9
11 Tesoro TSO 27.82 -37% 6% 3,878 4,347 .14x 8x 8x - 1.1x <1% 2 / 1
12 Valero Energy VLO 24.99 -34% 25% 13,988 18,807 .15x 7x 6x 2.4% .9x <1% 7 / 7
13 Delek US Holdings DK 13.34 -29% 31% 774 979 .16x 5x 7x 1.1% 1.4x 2% 5 / 3
14 Celestica CLS 9.17 -26% 36% 1,814 1,155 .16x - - - 1.3x <1% - / -
15 McKesson MCK 82.57 -19% 6% 20,321 20,117 .17x 13x 12x 1.0% >9.9x <1% 6 / 5
16 Systemax SYX 20.45 -47% 2% 744 626 .17x 15x 12x - 1.9x 2% 3 / 1
17 SYNNEX SNX 40.20 -44% 1% 1,490 1,789 .17x 9x 9x - 1.6x 29% 7 / 9
18 Brightpoint CELL 10.16 -27% 29% 693 905 .17x 9x 8x - 6.1x 2% 17 / 12
19 Manpower MAN 45.13 -30% 54% 3,682 3,802 .17x 15x 12x 1.8% 3.2x <1% 10 / 2
20 Best Buy BBY 25.71 -15% 31% 9,007 8,892 .18x 8x 7x 2.5% 3.0x <1% 11 / 2
21 Barnes & Noble BKS 13.11 -36% 61% 789 1,232 .18x n/m n/m - n/m 3% 8 / 11
22 Flextronics FLEX 6.93 -27% 22% 4,761 5,414 .18x 8x 7x - 2.3x <1% - / -
23 RadioShack RSH 7.88 -9% 112% 787 785 .18x 8x 10x 6.3% 1.0x <1% 1 / -
24 * Susser Holdings SUSS 26.67 -52% 0% 555 928 .19x 10x 19x - n/m 3% 7 / -
25 Insight Enterprises NSIT 21.98 -41% 2% 964 1,023 .19x 10x 9x - 2.0x <1% 2 / 7
26 Marathon Petroleum MPC 43.44 -39% 9% 15,487 15,829 .20x 8x 8x 2.3% 1.7x <1% 21 / 2
27 Sony SNE 20.60 -22% 79% 20,679 16,539 .20x n/m 20x 1.6% 1.2x <1% - / -
28 Career Education CECO 11.62 -46% 138% 881 434 .22x 5x 12x - 1.9x <1% - / 5
29 Supervalu SVU 7.06 -11% 67% 1,499 7,902 .22x 6x 6x 5.0% n/m <1% 10 / -
30 ITT Corp. ITT 22.72 -42% 0% 2,107 2,594 .22x 15x 13x 1.6% n/m <1% 22 / 4
31 Bunge BG 66.56 -19% 14% 9,687 12,933 .22x 10x 9x 1.5% .9x <1% - / -
32 Sears Holdings SHLD 54.53 -47% 71% 5,828 9,756 .23x n/m n/m - 1.8x 26% 7 / 4
33 Alon USA Energy ALJ 11.10 -52% 40% 622 1,540 .23x 10x 10x 1.4% 2.4x 2% 1 / -
34 General Motors GM 27.34 -31% 34% 42,775 34,851 .23x 7x 6x - n/m <1% 18 / 17
35 Avnet AVT 35.77 -34% 6% 5,189 6,205 .23x 9x 8x - 1.9x <1% 12 / 13
36 Andersons ANDE 41.92 -28% 22% 776 1,066 .23x 9x 9x 1.4% 1.4x 4% 12 / 8
37 Owens & Minor OMI 30.68 -16% 16% 1,946 2,023 .23x 15x 14x 2.9% 3.0x 1% 6 / 10
38 Nokia NOK 5.49 -19% 72% 20,076 12,091 .24x 29x 14x 4.7% 2.7x <1% - / -
39 Kroger KR 23.92 -12% 8% 13,749 21,223 .24x 12x 11x 1.9% 3.6x <1% 5 / 10
40 NACCO Industries NC 102.06 -45% 30% 694 813 .25x 8x 8x 2.1% 1.4x 2% 19 / 5
41 * Tyson Foods TSN 18.99 -18% 11% 7,007 8,365 .25x 9x 8x .8% 1.9x <1% 16 / 6
42 Sanmina-SCI SANM 12.37 -51% 40% 1,003 1,642 .25x 9x 7x - 1.3x <1% - / 3
43 Lear LEA 46.13 -23% 22% 4,720 3,662 .26x 9x 8x 1.2% 2.4x <1% 8 / 8
44 China Yuchai CYD 16.55 -24% 102% 617 640 .26x - - 3.0% .8x <1% - / -
45 Western Refining WNR 18.29 -39% 19% 1,661 2,321 .27x 6x 6x .9% 2.0x 28% - / 4
 Company website SEC Y! Price Charts Proxy Y!


* New additions are highlighted. Criteria: ► EV to TTM revenue < 0.5x ► MV < revenue ► MV > $500 million ► China RTOs excluded


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 165 of 169
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 6.42 -16% 86% 245 22 .0x .1x n/m n/m - .7x 2% 6 / 1
2 Stewart Information STC 13.89 -42% 1% 268 203 .1x .1x .2x 18x 9x 1.2x <1% - / -
3 Winn-Dixie Stores WINN 9.47 -46% 6% 533 425 .1x .2x n/m n/m n/m .8x 2% 20 / 14
4 Career Education CECO 11.62 -46% 138% 881 434 .2x .3x 1.9x 5x 12x 1.9x <1% - / 5
5 Investment Tech ITG 10.68 -16% 85% 427 169 .3x .4x n/m 15x 11x 1.4x 2% 7 / 6
6 IDT Corp. IDT 9.27 -8% 85% 211 112 .1x .4x 17.3x 62x 12x 4.0x 11% 5 / 5
7 RadioShack RSH 7.88 -9% 112% 787 785 .2x .4x 3.5x 8x 10x 1.0x <1% 1 / -
8 Kindred Healthcare KND 11.78 -35% 146% 614 2,015 .4x .4x 17.4x 6x 7x n/m <1% 2 / 2
9 Office Depot ODP 3.26 -46% 83% 914 1,501 .1x .4x n/m n/m 41x 1.4x <1% 2 / -
10 Unisys UIS 19.89 -31% 107% 862 507 .1x .5x 1.6x 7x 6x n/m 1% 21 / 11
11 Telecom Argentina TEO 20.00 -16% 35% 2,106 1,639 .4x .5x 1.9x 7x 6x 1.4x <1% - / -
12 First American FAF 14.96 -30% 16% 1,578 1,225 .3x .5x 1.3x 22x 13x 1.4x <1% 2 / 2
13 Charming Shoppes CHRS 5.46 -58% 2% 636 622 .3x .6x n/m 78x 25x 2.9x <1% - / -
14 ArcelorMittal MT 21.42 -31% 76% 33,522 56,035 .6x .6x 11.4x 10x 6x .8x <1% - / -
15 Amedisys AMED 11.29 -19% 244% 332 456 .3x .6x n/m 6x 12x 2.7x 2% 5 / 2
16 * Lincoln Educational LINC 9.23 -29% 115% 209 219 .4x .7x 3.4x 9x 18x 1.5x 4% 1 / 6
17 Barnes & Noble BKS 13.11 -36% 61% 789 1,232 .2x .7x n/m n/m n/m n/m 3% 8 / 11
18 Vanguard Health VHS 10.33 -17% 80% 794 2,960 .5x .7x 16.6x 13x 11x n/m 11% 22 / 3
19 Kelly Services KELYA 16.15 -33% 41% 597 612 .1x .7x 10.6x 12x 10x 1.0x 3% - / 8
20 Nature’s Sunshine NATR 16.16 -52% 31% 252 203 .6x .7x 14.4x 11x 11x 3.2x <1% 2 / 1
21 Skechers SKX 13.04 -14% 70% 651 437 .3x .7x n/m n/m 23x .8x 2% 1 / 7
22 Best Buy BBY 25.71 -15% 31% 9,007 8,892 .2x .7x 5.1x 8x 7x 3.0x <1% 11 / 2
23 Haverty Furniture HVT 12.86 -26% 7% 282 225 .4x .7x 86.3x >99x 37x 1.1x 2% 1 / 5
24 American Equity AEL 12.30 -35% 13% 733 770 .6x .7x .6x 6x 6x .5x 3% 3 / 2
25 E.W. Scripps SSP 9.17 -31% 11% 502 354 .5x .7x n/m n/m 16x 1.0x <1% 2 / 5
26 hhgregg HGG 12.93 -31% 31% 482 504 .2x .7x 7.0x 12x 10x 1.5x 10% 6 / 5
27 American Greetings AM 14.93 -16% 66% 531 680 .4x .7x 4.3x 7x 7x .7x <1% 2 / 2
28 Cbeyond CBEY 8.00 -28% 85% 243 234 .5x .7x n/m n/m >99x 1.8x 3% 9 / 9
29 Stein Mart SMRT 7.34 -23% 49% 319 224 .2x .7x 5.7x 16x 12x 1.2x 4% 15 / 6
30 Destination Maternity DEST 16.74 -27% 51% 223 220 .4x .7x 6.6x 12x 10x 2.4x 1% 9 / -
31 ITT Corp. ITT 22.72 -42% 0% 2,107 2,594 .2x .8x 2.7x 15x 13x n/m <1% 22 / 4
32 Sierra Wireless SWIR 7.64 -21% 64% 239 128 .2x .8x n/m - - 1.7x <1% - / -
33 Corinthian Colleges COCO 4.94 -75% 14% 419 516 .3x .8x 18.1x 15x 9x 2.2x <1% 9 / 7
34 * ReachLocal RLOC 7.86 -23% 231% 231 146 .4x .8x n/m n/m 41x 8.4x 1% 8 / 2
35 Alcatel-Lucent ALU 2.45 -43% 171% 5,696 5,889 .3x .8x 21.5x 9x 7x n/m <1% - / -
36 * TeleNav TNAV 7.84 -7% 182% 326 138 .6x .8x 2.4x 12x 25x 1.6x 7% 6 / 5
37 * Blyth BTH 61.71 -51% 15% 507 427 .5x .8x 13.8x - - 2.8x <1% - / -
38 US Airways LCC 8.90 -56% 16% 1,443 4,062 .3x .8x 9.5x 4x 4x n/m <1% - / -
39 * Nokia NOK 5.49 -19% 72% 20,076 12,091 .2x .8x n/m 29x 14x 2.7x <1% - / -
40 Intersections INTX 13.12 -28% 75% 226 221 .6x .8x 6.5x 14x 14x 4.5x 45% 13 / 9
41 Brown Shoe BWS 10.71 -45% 47% 450 828 .3x .8x 17.1x 14x 10x 1.6x 1% 3 / 3
42 Sun Healthcare SUNH 4.52 -54% 232% 544 603 .3x .8x n/m 5x 10x 3.6x 2% 8 / 1
43 Sears Holdings SHLD 54.53 -47% 71% 5,828 9,756 .2x .9x n/m n/m n/m 1.8x 26% 7 / 4
44 * Research In Motion RIMM 15.07 -17% 368% 7,907 6,600 .3x .9x 2.3x - - 1.1x <1% - / -
45 * Community Health CYH 20.73 -30% 105% 1,898 10,461 .8x .9x 9.2x 6x 6x n/m 2% 7 / 2
 Company website SEC Y! Price Charts Proxy Y!


* New additions are highlighted. Criteria: ► EV < TTM gross profit ► MV < 2x gross profit ► MV > $200 million ► China RTOs excluded


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 166 of 169
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 K-Swiss KSWS 3.35 -26% 273% 119 91 .7x 24% 125% .3x n/m 27% 4 / 2
2 * Tuesday Morning TUES 3.59 -15% 46% 151 93 .6x 38% 125% .1x 16x 2% 5 / 4
3 Imation IMN 6.42 -16% 86% 245 22 .7x 91% 119% .0x - 2% 6 / 1
4 Opnext OPXT 1.18 -34% 277% 107 68 .6x 36% 117% .2x n/m <1% 1 / -
5 FormFactor FORM 5.25 -11% 110% 265 (32) .8x 112% 113% n/m n/m <1% 2 / 3
6 PennyMac Mortgage PMT 17.95 -21% 8% 510 (571) .9x 212% 107% n/m 6x <1% 2 / -
7 Crexus Investment CXS 11.31 -29% 19% 867 (54) .9x 106% 106% n/m 9x <1% 2 / -
8 Maxygen MAXY 5.51 -28% 13% 155 (8) .9x 105% 105% n/m - <1% - / -
9 Westell Technologies WSTL 2.42 -20% 62% 160 18 .8x 89% 100% .2x - 2% 2 / 1
10 Ingram Micro IM 19.52 -21% 11% 2,994 2,495 .9x 17% 92% .1x 8x <1% 13 / 11
11 Endocyte ECYT 3.77 -20% 293% 135 8 1.1x 94% 90% n/m n/m 3% 9 / -
12 Richardson Electron. RELL 12.34 -6% 25% 209 48 1.0x 77% 90% .3x 26x <1% 2 / 1
13 Rimage RIMG 12.25 -16% 34% 126 11 1.0x 91% 90% .1x 23x 2% 6 / -
14 MedCath MDTH 7.88 -15% 90% 160 53 .5x 67% 88% .2x - 2% - / 6
15 Kimball KBALB 6.59 -30% 20% 181 150 .5x 17% 86% .1x - 2% 6 / 3
16 Parlux Fragrances PARL 5.16 -56% 28% 107 84 1.1x 21% 86% .6x - <1% - / -
17 * Flexsteel Industries FLXS 16.77 -22% 1% 113 98 .9x 14% 84% .3x - 16% 11 / 5
18 Axcelis Technologies ACLS 1.79 -44% 67% 191 144 .9x 25% 83% .4x 6x <1% 1 / 4
19 Sprott Physical Gold PHYS 14.92 -18% 13% 2,481 482 1.2x 81% 81% 1.2x - <1% - / -
20 Benchmark Electron. BHE 17.69 -32% 13% 1,022 749 .9x 27% 80% .3x 13x 1% 2 / 1
21 * CSS Industries CSS 20.87 -28% 7% 203 193 1.0x 5% 79% .5x 9x <1% - / -
22 JAKKS Pacific JAKK 15.06 -12% 41% 391 250 1.0x 36% 78% .3x 15x 2% 7 / 2
23 Aviat Networks AVNW 2.82 -43% 129% 173 103 1.1x 40% 77% .2x 15x 2% 14 / 5
24 Orbotech ORBK 11.29 -21% 32% 489 288 1.2x 41% 76% .5x 8x <1% - / -
25 Tellabs TLAB 4.07 -10% 38% 1,485 509 1.0x 66% 74% .4x 58x <1% - / 3
26 * CE Franklin CFK 10.00 -25% 5% 181 166 1.3x 9% 73% .3x - <1% - / -
27 NeoPhotonics NPTN 5.47 -34% 274% 135 91 .9x 33% 72% .5x >99x <1% 5 / -
28 Enstar Group ESGR 98.70 -18% 16% 1,428 (2,520) 1.4x 277% 71% n/m 8x <1% 1 / 1
29 Insmed INSM 4.59 -42% 194% 114 31 1.4x 73% 70% 7.2x n/m 1% 5 / -
30 Skechers SKX 13.04 -14% 70% 651 437 .8x 33% 70% .3x 23x 2% 1 / 7
31 Tech Data TECD 55.51 -31% 2% 2,291 1,864 1.1x 19% 70% .1x 10x <1% 2 / 6
32 * Novatel Wireless NVTL 3.62 -31% 93% 116 61 1.1x 48% 68% .1x n/m <1% 1 / 1
33 ModusLink MLNK 5.65 -42% 27% 248 136 1.1x 45% 68% .2x - 2% 9 / 6
34 Pacific Biosciences PACB 4.66 -52% 241% 255 84 1.3x 67% 68% 2.5x n/m <1% 1 / 1
35 Sycamore Networks SCMR 19.01 -18% 35% 547 182 1.2x 67% 67% 3.4x n/m 6% 2 / 1
36 Cutera CUTR 9.35 -28% 7% 130 42 1.4x 68% 66% .7x n/m <1% 1 / 1
37 West Marine WMAR 13.31 -48% 1% 304 260 1.1x 15% 65% .4x 16x <1% 3 / 2
38 * Bel Fuse BELFA 20.99 -27% 17% 234 234 1.1x 0% 65% .8x - 8% - / -
39 Hurco HURC 25.09 -30% 40% 162 118 1.3x 27% 64% .7x 12x 2% 7 / -
40 Supertex SUPX 19.12 -14% 21% 231 101 1.3x 56% 64% 1.5x 62x 1% 7 / 7
41 * Electro Scientific ESIO 15.05 -28% 39% 435 243 1.2x 44% 64% .9x 37x 1% - / 1
42 Movado MOV 20.44 -47% 0% 509 371 1.3x 27% 64% .8x 19x <1% 5 / 5
43 * China N.E. Petroleum NEP 3.01 -39% 83% 107 22 .6x 79% 63% .2x - <1% - / -
44 QLT QLTI 8.01 -33% 11% 393 189 1.2x 52% 63% 4.6x - <1% 3 / -
45 * AVX Corp. AVX 13.72 -21% 21% 2,329 1,467 1.2x 37% 63% .9x 14x <1% 9 / 2
 Company website SEC Y! Price Charts Proxy Y!


* New additions are highlighted. Criteria: ► TBV > 50% of MV ► ST assets - liabilities > 50% of MV ► MV > $100mn ► China RTOs excl.


Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 167 of 169


This Month’s Top 10 Web Links
A Selection of Our Favorite Internet Resources


O
Walter Schloss “Sixty-five Years on Wall Street”

http://bit.ly/AqioAR
O
Warren Buffett “Why Stocks Beat Gold and Bonds”

http://bit.ly/wAECeS
O
Chuck Royce Interview with Consuelo Mack

http://bit.ly/AAcPcD
O
Bruce Berkowitz Fairholme Annual Letter and Report

http://bit.ly/ykCw9x
O
Prem Watsa Interview in The Fairfax Newsletter

http://bit.ly/yTjjOz
O
George Soros “How to Save the Euro”

http://bit.ly/wGkIgB
O
Steven Romick FPA Annual Letter and Report

http://bit.ly/xfOJTr
O
Robert Rodriguez Speech to Institute for Private Investors

http://bit.ly/z4HEhV
O
Jeremy Grantham Q4 Letter: “The Longest Quarterly Letter Ever”

http://bit.ly/AmAxbw
G
Jonah Lehrer The New Yorker, “Groupthink”

http://nyr.kr/zYbuou



Buffett’s annual letter is not
referenced below. To read it, visit
http://www.berkshirehathaway.com

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2012 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 2012 – Page 168 of 169

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Table of Contents
EDITORIAL COMMENTARY ..........................................................................4 GUEST WRITE-UP: LISA RAPUANO ON AMBASSADORS GROUP..........6 EXCLUSIVE INTERVIEW WITH JOHN LAMBERT........................................7 ONLINE ONLY: THREE EXCLUSIVE INTERVIEWS .................................. 10 50+ PORTFOLIOS WITH SIGNAL VALUE™ .............................................. 12
AKRE CAPITAL (CHUCK AKRE) ................................................................................................ 13 ALTAI CAPITAL (TOBY SYMONDS) ........................................................................................... 14 ANCIENT ART / TETON (QUINCY LEE) ...................................................................................... 15 APPALOOSA (DAVID TEPPER) ................................................................................................. 16 ATLANTIC INVESTMENT (ALEXANDER ROEPERS) ...................................................................... 17 BARES CAPITAL (BRIAN BARES).............................................................................................. 18 BAUPOST (SETH KLARMAN) .................................................................................................... 19 BERKSHIRE HATHAWAY (W ARREN BUFFETT) ........................................................................... 20 BP CAPITAL (BOONE PICKENS)............................................................................................... 21 BRAVE WARRIOR (GLENN GREENBERG) .................................................................................. 22 BREEDEN CAPITAL (RICHARD BREEDEN) ................................................................................. 23 CENTAUR VALUE (ZEKE ASHTON) ........................................................................................... 24 CENTERBRIDGE (JEFFREY ARONSON AND MARK GALLOGLY) .................................................... 25 CHILDREN’S INVESTMENT (CHRIS HOHN) ................................................................................. 26 CHOU ASSOCIATES (FRANCIS CHOU) ...................................................................................... 27 EAGLE CAPITAL (BOYKIN CURRY) ........................................................................................... 28 EAGLE VALUE (MERYL W ITMER) ............................................................................................. 29 EDINBURGH PARTNERS (SANDY NAIRN) .................................................................................. 30 ESL INVESTMENTS (EDDIE LAMPERT) ..................................................................................... 31 FAIRFAX (PREM W ATSA) ........................................................................................................ 32 FAIRHOLME (BRUCE BERKOWITZ) ........................................................................................... 33 FORCE CAPITAL (ROBERT JAFFE) ........................................................................................... 34 GATES CAPITAL (JEFF GATES) ............................................................................................... 35 GLENVIEW (LARRY ROBBINS) ................................................................................................. 36 GOLDENTREE (STEVE TANANBAUM) ....................................................................................... 37 GREENHAVEN (ED W ACHENHEIM) ........................................................................................... 38 GREENLIGHT (DAVID EINHORN) .............................................................................................. 39 H PARTNERS (REHAN JAFFER) ............................................................................................... 40 HARBINGER (PHIL FALCONE) .................................................................................................. 41 HAWKSHAW (KIAN GHAZI) ...................................................................................................... 42 HOUND PARTNERS (JONATHAN AUERBACH) ............................................................................ 43 ICAHN ENTITIES (CARL ICAHN) ................................................................................................ 44 INTERNATIONAL VALUE ADVISERS (CHARLES DE VAULX) .......................................................... 45 JOHO CAPITAL (ROBERT KARR) .............................................................................................. 46 LANE FIVE (LISA RAPUANO).................................................................................................... 47 LEUCADIA (IAN CUMMING AND JOE STEINBERG) ....................................................................... 48 LONE PINE (STEVE MANDEL) .................................................................................................. 49 MARKEL GAYNER (TOM GAYNER) ........................................................................................... 50 MHR (MARK RACHESKY) ....................................................................................................... 51 MSD CAPITAL (GLENN FUHRMAN AND JOHN PHELAN) .............................................................. 52 PABRAI FUNDS (MOHNISH PABRAI) ......................................................................................... 53 PAULSON & CO. (JOHN PAULSON) .......................................................................................... 54 PENNANT (ALAN FOURNIER) ................................................................................................... 55

Value-oriented Equity Investment Ideas for Sophisticated Investors

PERSHING SQUARE (BILL ACKMAN) ........................................................................................ 56 SAGEVIEW (ED GILHULY AND SCOTT STUART) ......................................................................... 57 SCOUT (JAMES CRICHTON) .................................................................................................... 58 SECOND CURVE (TOM BROWN) .............................................................................................. 59 SOUTHEASTERN (MASON HAWKINS) ....................................................................................... 60 THIRD POINT (DAN LOEB)....................................................................................................... 61 TIGER GLOBAL (CHASE COLEMAN) ......................................................................................... 62 VALUEACT (JEFFREY UBBEN) ................................................................................................. 63 WEITZ FUNDS (WALLY WEITZ) ................................................................................................ 64 WEST COAST (LANCE HELFERT AND PAUL ORFALEA) ............................................................... 65 WINTERGREEN (DAVID W INTERS) ........................................................................................... 66 WL ROSS & CO. (WILBUR ROSS) ........................................................................................... 67

PROFILING 20 SUPERINVESTOR HOLDINGS ......................................... 68
AMBASSADORS GROUP (EPAX) – LANE FIVE  ...................................................................... 68 BAKER HUGHES (BHI) – GREENHAVEN  ............................................................................... 72 BOSTON SCIENTIFIC (BSX) – APPALOOSA  ........................................................................ 76 CANADIAN NATURAL (CNQ) – BP CAPITAL , PERSHING SQUARE , WINTERGREEN  .......... 80 CORNING (GLW) – CENTURY , DODGE & COX , SEQUOIA  ....................................... 84 COVIDIEN (COV) – FPA CRESCENT , HEARTLAND  ............................................................. 88 CVR ENERGY (CVI) – APPALOOSA , ICAHN  .................................................................... 92 DELL (DELL) – ANCIENT ART , FAIRFAX , GREENLIGHT , IVA , WEITZ  ................... 96 DEVRY (DV) – ARIEL , FPA , LANE FIVE  ................................................................... 100 FLIR SYSTEMS (FLIR) – W EITZ  ........................................................................................ 104 GOOGLE (GOOG) – BRAVE W ARRIOR , LONE PINE , PENNANT , SCOUT , TIGER  .... 108 MEMC ELECTRONIC M ATERIALS (WFR) – ALTAI , THIRD POINT .................................... 112 NEWFIELD EXPLORATION (NFX) – EAGLE CAPITAL , FPA , OAKMARK  ............................ 116 ORACLE (ORCL) – APPALOOSA , EAGLE , GLENVIEW , MARKEL , WEITZ  ....... 120 SPECTRUM BRANDS (SPB) – HARBINGER  ......................................................................... 124 STAPLES (SPLS) – FORCE , IVA , OLSTEIN , PZENA  ............................................ 128 TAKE-TWO INTERACTIVE (TTWO) – GLENVIEW , ICAHN  .................................................. 132 TRIPADVISOR (TRIP) – PENNANT , SCOUT  ................................................................ 136 VIRGIN MEDIA (VMED) – EDINBURGH  ............................................................................ 140 XEROX (XRX) – CENTAUR , GLENVIEW , GREENLIGHT , OLSTEIN  ............................. 144

SCREENING ~850 HOLDINGS OF 50+ SUPERINVESTORS .................. 148
TOP 100, BY MARKET VALUE ................................................................................................ 148 TOP 100, BY THIS FY EPS YIELD (CONSENSUS ESTIMATES) ................................................... 150 TOP 100, BY NEXT FY EPS YIELD (CONSENSUS ESTIMATES) .................................................. 152 TOP 100, BY TRAILING GROSS PROFIT TO ENTERPRISE VALUE ............................................... 154 TOP 100, BY TANGIBLE BOOK VALUE TO MARKET VALUE........................................................ 156

FAVORITE SCREENS FOR VALUE INVESTORS.................................... 158
“MAGIC FORMULA,” BASED ON TRAILING OPERATING INCOME ................................................. 158 “MAGIC FORMULA,” BASED ON THIS YEAR’S EPS ESTIMATES ................................................. 159 “MAGIC FORMULA,” BASED ON NEXT YEAR’S EPS ESTIMATES ................................................ 160 CONTRARIAN: BIGGEST YTD LOSERS (DELEVERAGED & PROFITABLE) ..................................... 161 VALUE WITH CATALYST: CHEAP REPURCHASERS OF STOCK ................................................... 162 PROFITABLE DIVIDEND PAYORS WITH DECENT BALANCE SHEETS............................................ 163 DEEP VALUE: LOTS OF REVENUE, LOW ENTERPRISE VALUE ................................................... 164 DEEP VALUE: NEGLECTED GROSS PROFITEERS .................................................................... 165 ACTIVIST TARGETS: POTENTIAL SALES, LIQUIDATIONS OR RECAPS ......................................... 166

THIS MONTH’S TOP 10 WEB LINKS ....................................................... 167

© 2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 – Page 3 of 169

Display accounts for 40% of revenue. we are pleased to bring you a new Superinvestor Issue of The Manual of Ideas. MV $97 million) $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Ambassadors has a long-term record of impressive growth and returns on capital.39 and $1. a large shareholder of Ambassadors. The company has a strong balance sheet and should benefit from a recovery. Corning (NYSE: GLW. Lisa Rapuano of Lane Five. analyzed twenty of them. We’ve screened hundreds of superinvestor companies.com March 2012 – Page 4 of 169 . $13. assuming enrollment eventually returns to the 40. rendering the shares quite attractive. kindly agreed to write up her investment thesis for the benefit of our members (see page 6). MV $20 billion) $35 $30 $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Corning. Improving economic conditions in 2012 will not be fully reflected in travel bookings until 2013. Recent profitability has been pressured by revenue declines and high opex. SUBSCRIBE TODAY! www. especially in light of Corning’s very strong balance sheet. has been hurt by steeper-than-expected price declines in the display and solar panel markets.50 per share. “price declines will reset the profitability of both Display Technologies and Dow Corning to lower levels. while the 50%-owned equity affiliate Dow Corning sells into the solar panel market. and found three ideas that deserve closer consideration: Ambassadors Group (Nasdaq: EPAX.50 per share.Value-oriented Equity Investment Ideas for Sophisticated Investors Editorial Commentary With the February 15th institutional investor holdings SEC filing deadline behind us. $5. respectively.000 level that prevailed prior to the recession. Similar dynamics may be at work currently due to the long lead time required to generate travel bookings.manualofideas.52 per share in 2012 and 2013.” Still. © 2008-2012 by BeyondProxy LLC. All rights reserved. According to management.000-50. analysts expect Corning to earn $1. which makes specialty glass for LCD displays and other products. The current valuation appears to give little credit to recovery potential over the next two to three years. It is worth noting that Ambassadors was slow to bounce back after the 2001 recession.

so please email Oliver Mihaljevic today at oliver@manualofideas. I take this opportunity to thank my friend and co-organizer Guy Spier for making the event a great experience for all participants. I hope you’ll consider applying to attend next year’s event (check back at www.com/manualofideas before March 15 to get $1.  VALUEx Zurich/Klosters took place from February 1-3 and was once again a huge success. Visit www.ch in a few months). As a result. MV $11 billion) $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Xerox is one of the cheapest large IT services companies. VALUEx Zurich/Klosters simply couldn’t exist without Guy’s charisma and hospitality.ValueInvestingCongress. and a “magic formula” portfolio. $8.valuex. Sincerely.30 per share. All rights reserved.Value-oriented Equity Investment Ideas for Sophisticated Investors Xerox (NYSE: XRX. To view the portfolio’s mark-to-market performance and latest activity. to be held on May 6-7. John Mihaljevic. spending an expected ~$1 billion on repurchases this year. The portfolio consists of three sub-portfolios: a downside protection portfolio. and we invite you to join us for drinks and conversation.com if you plan on traveling to Omaha. The company has been allocating capital in a shareholder-friendly way. It was wonderful to see many of our members there and to meet some new value investors from around the world.300 off (we earn no commission but are simply passing the best deal on to you). We wish Xerox had a stronger balance sheet but acknowledge that buying back shares is most likely a better use of capital than deleveraging the balance sheet. Xerox also appears to have cost-cutting opportunities in the legacy ACS business. © 2008-2012 by BeyondProxy LLC.manualofideas.manualofideas. Space at our private gathering is very limited. EPS growth is likely to outpace low to mid single digit revenue growth over the next few years. which was acquired for $6 billion in 2010. SUBSCRIBE TODAY! www.com.  We’ll be in Omaha for the Berkshire Hathaway annual meeting this May. a deep value portfolio. trading at under 8x estimated EPS of $1. CFA and The Manual of Ideas research team Access The Manual of Ideas Model Portfolio in the online members area at members. click on the above-referenced link or type it into your web browser.com March 2012 – Page 5 of 169 . We look forward to seeing you there! While in town.12 in 2012. we also look forward to attending John Schwartz and Whitney Tilson’s star-studded Value Investing Congress.

and we intend to continue this conversation. high 20%-range revenue growth and triple digit returns on invested capital from the early 2000s through its peak in 2007.Value-oriented Equity Investment Ideas for Sophisticated Investors Guest Write-up: Lisa Rapuano on Ambassadors Group Ambassadors Group runs high-end student travel under the People to People and Discovery brand names. but we think that with the right strategy free cash flow can return to previous levels. However. the company should end the year with travelers down ~10%. Unlike most other travel and education related companies. We are not advocating a particular approach at this time.com March 2012 – Page 6 of 169 . however. For 2011. we think the business could be revived to at least some level of its former level of performance. the fundamentals have declined precipitously since then.7% The company is trading at 5.manualofideas. puts the enterprise value at ~$70 million. plus student deposits or $27. when the company saw a dramatic downturn in the number of students travelled during the financial crisis and recession. showing high teens enrollment growth.4 million. the market is pricing the stock as if these cash flow numbers will never be repeated. Since the students put down significant deposits ahead of their travel dates. but we see multiple ways that costs can be cut. This company has historically generated outsized free cash flow due to high margins and low capital expenditure needs. Working capital can be very volatile.50 today. the company has a market capitalization of ~$98 million. the company has increased its selling and marketing expenses related to the travel business by about 5% and general and administrative spending related to the travel business is down only 13% from the peak. asset optimized manner that returns capital to shareholders and possibly as much as $20 if the business can be reinvigorated and repositioned to begin growing again. money-losing programs can be closed. In December we asked the Board to consider these issues and come back to us with proposals. it trades at a ridiculously compelling valuation. there has been no rebound in sales. overcapacity of real estate that can be optimized and possibly sellable assets that are not core to the student travel operation. and marketing and sales can be made more efficient. Cash at year end was ~$58. which we treat as debt. In addition. © 2008-2012 by BeyondProxy LLC. At today’s price of ~$5. So let’s leave working capital aside for this exercise.9% 2010: 25.1x the amount of cash it generated just a year ago. This decline began in 2009. and the number of enrolled travelers continues to contract. the company holds a large amount of “float”.and down over 54% from the 2007 peak. working capital was positive. we think there are costs that are redundant.6 million. The core People to People Student Ambassadors program is less awful than the aggregate business appears to be.7% 2009: 66. We rarely see these sorts of free cash flow multiples for any type of business. and at $5. and we think there are opportunities to isolate that value while lowering or eliminating losses in the non-core programs. program itineraries and possibly pricing can be revamped to meet customer needs more appropriately. Clearly. All rights reserved. The company’s pre-working capital free cash flow yield to EV is as follows: 2011: 9. In 2010. Despite the disappointing results for the last four enrollment years. In most years it is a benefit to cash but in 2011 we expect working capital to use cash because of lower student deposits and the company’s choice to prepay a lot of future travel expenses. marketing approaches that are outdated and expensive. This is obviously very poor performance when what was a triple-digit return business is likely to earn only about 3% on equity and capital in the year we just completed.62. This business used to be terrific. SUBSCRIBE TODAY! www. During this time. Overall we think EPAX is worth at least $10 if it is run in a low growth. assets can be sold or optimized. however.

which was in commodities at the time. meaning they are to a greater-than-normal extent in control of their own destiny. MOI: How do you assess the quality and incentives of management? Lambert: When considering management. The principal attraction of this. we find humility and conservatism to be important qualities. As a result they are often perceived as low-quality businesses. we feel it is significantly undervalued at the current price. was the opportunity to expand my investment horizons substantially and blend company-specific work with a much broader understanding of how markets and economies work and interact. what are the key criteria you look for in potential investments? Lambert: In general.Value-oriented Equity Investment Ideas for Sophisticated Investors Exclusive Interview with John Lambert We recently had the pleasure of interviewing John Lambert. obvious examples of which would be the divisional structure of the company. at the time and still today. the balance sheet and senior management. he worked as a UK equity analyst at M&G and a commodity trader at Cargill. we also like stocks with a particularly strong internal dynamic. before moving to GAM. Prior to that. and lose. He lives in London. John spent six years as a pan-European investment analyst at Gartmore. This usually leads us to recovery or turnaround situations where the company is undertaking a number of different actions to rehabilitate itself following a period of often dramatic underperformance. having worked for several years just as a European sector analyst in industrial goods and services. money. so I decided to make a slight change of direction to my career. The Manual of Ideas: How did you get interested in investing? Describe your path as an investor and what attracted you to your current role at GAM. John holds a First Class BA (Hons) in Economics with Russian from Exeter University and is a CFA Charterholder. A strong track record of achievement in directly comparable areas is obviously also nice to have. Our time horizon is multi-year. More often than not. which I feel much more comfortable with than the daily pressure of the hedge fund world. so the learning curve was necessarily very steep. these situations can offer considerable upside should the company execute the turnaround successfully. It has taken a long time to really find a coherent investment style that I feel comfortable with.” . All rights reserved. Unsurprisingly. Within this framework. we look for investments in areas that for one reason or other are seeing particularly depressed sentiment or are simply out of favor. In the simplest terms you could say we look to exploit mean reversion. MOI: When it comes to stock selection. helping to manage long-only UK and global funds with a distinct contrarian and deep value approach. we like to see a strong sense of change within the business. Moreover. I certainly didn’t take it very seriously to start with. Before joining GAM in 2007. It represented a huge step up. we are © 2008-2012 by BeyondProxy LLC.com March 2012 – Page 7 of 169 “In light of the underlying cash generation potential and asset value of [BP]. Here the brief is far broader. John Lambert: I first got interested in investing on a personal level during the late 1990s when market gyrations were providing the retail investor with plenty of opportunities to make. This was followed for a while by running a small pot of hedge fund assets investing in that same sector. but the more I learned about investing the more I felt it was the ideal job for me. an investment manager at London-based GAM. SUBSCRIBE TODAY! www. given the relatively narrow area of expertise and experience as a sector analyst.manualofideas.

Hence we find opportunities in a wide range of industries and geographies at any one time. which help to identify areas of currently depressed sentiment and hence probable low valuations. There are no hard and fast rules. We still attempt to find companies that are either significantly below their intrinsic value. At BP. All rights reserved. and if anything our investment style is even more weighted to a bottom-up approach. Essentially the company has been mismanaged for a decade. and hence assessing the abilities and direction of the new team becomes a critical task. The company’s assets appear materially undervalued at the current highly depressed © 2008-2012 by BeyondProxy LLC. and operational performance.” . MOI: How do you generate investment ideas? Lambert: The principal method of idea generation is through the use of very long-term performance charts. Nevertheless. MOI: Would you outline the summary thesis behind one or two of your best ideas at this time? Lambert: Two such ideas at present would be BP (London/NYSE: BP) and Cable & Wireless Worldwide (London: CWC). which has led to new management and hopefully in time a new culture as well. their subsea network internationally. in particular their UK network. This has had the benefit of allowing new management a much freer hand in terms of the strategic direction of the group. we feel it is significantly undervalued at the current price. this is a classic example of what we look for. subscription to quality newsletters like the MOI and general reading. Ideas also come through more quantitative screening. Valuations have descended to levels comparable with or below Western markets. if so. to name just a few.Value-oriented Equity Investment Ideas for Sophisticated Investors seeing new management teams in companies where the previous incumbents have failed operationally or strategically. and with old management finally cleared out. and there are no hard criteria for qualification as a potential idea or inclusion in the portfolio. MOI: What are your favorite hunting grounds for investments in the current environment? Do you see value in Japan and. We don’t approach the market differently to any other. that offer value. but we would be wary of those appearing overly confident or those for whom the share price appears to be more important than the business. since ideas are much more often than not generated at a stock-specific level. We believe a much sharper focus on cash flow. and see high quality companies that are very cheaply priced in comparison with Western equivalents. We do see value in Japan at the moment. will reveal the value of these assets in time. Western investors remain largely apathetic to this and hence the region appears to us to offer significant value. and there will always be companies that are experiencing a period of underperformance that has the potential to be reversed. For Cable & Wireless Worldwide.com March 2012 – Page 8 of 169 “[Cable & Wireless’] assets appear materially undervalued at the current highly depressed share price.manualofideas. their high-growth hosting business and substantial tax assets. In light of the underlying cash generation potential and asset value of the company. we feel a new start is in the cards. how do you approach that market? Lambert: One of the attractions of our approach is that there will always be areas that are out of favor. both in the UK. It is best described as eclectic. SUBSCRIBE TODAY! www. we feel the company has clearly had a cathartic shock following the Gulf of Mexico incident. balance sheets are strong and corporates are being forced to undertake restructuring and business reorganizations more actively than ever before. have strong turnaround potential or ideally both together.

What are the biggest challenges you face as a portfolio manager? How do you manage risk? Lambert: One of the biggest challenges in our style is to manage the position size appropriately. and consequently it is often put to one side and forgotten. in particular their UK network. Knowing where and how to make small improvements across the range of skills required to deliver better returns is difficult to do. their subsea network internationally. This would be a mistake. This essentially means we have blended our instinctive restructuring and recovery bias with higher quality and more naturally resilient businesses. the depressed share price means the company could clearly be of interest to larger acquirers. We believe a much sharper focus on cash flow. In this regard we tend to start with small positions and grow them when we get greater confidence in the trajectory of the recovery. with reported expressions of interest in both individual assets and the entire company in recent months. will reveal the value of these assets in time. we have learned that value can be found right across the quality spectrum. In so doing. © 2008-2012 by BeyondProxy LLC. thanks very much for sharing your ideas and insights. Recovery and restructuring situations can be long. and have you tweaked your approach in any way as a result? “Knowing where and how to make small improvements across the range of skills required to deliver better returns is difficult to do. MOI: What is the single biggest mistake investors make? Lambert: Compared to most professions. ultimately. and consequently it is often put to one side and forgotten. and that few assets are so bad they can’t be a good investment if bought cheaply enough. what we found particularly resonant was the idea that a quality company is not synonymous with a good investment. All rights reserved. Practically every page contains a nugget of thoughtful and indispensable advice. MOI: How has market volatility over the past few years affected your investment process. MOI: In investing. so it has necessarily become somewhat more pragmatic. Process analytics and improvement should be a core part of any investment process! MOI: What books have stood out to you in recent years? Lambert: There is a clear winner in this category.Value-oriented Equity Investment Ideas for Sophisticated Investors share price. and not just in the most beaten-down and unloved names. so timing the entry and when to raise the holding to a meaningful exposure become critical success factors. their high-growth hosting business and substantial tax assets. since this is a key means both of controlling stock-specific risks and capturing performance from the best ideas within the portfolio. is something the thoughtful individual should constantly be striving for. and operational performance. good ideas are only one piece of the success equation. SUBSCRIBE TODAY! www. A greater effort to understand one’s strengths and weaknesses as an investor. investors suffer a distinct lack of useful information and feedback that would enable them to improve their processes and.” Lambert: Market conditions have generally not favored our style of investing over recent years.manualofideas. This would be a mistake. by deconstructing and measuring your process as thoroughly as possible. drawn out processes that rarely develop in a straight line. Moreover. In the meantime. Howard Marks’ The Most Important Thing was for me the most concise and insightful reference guide to value investing that I have yet found. MOI: John. to name just a few. results.com March 2012 – Page 9 of 169 . Skilled portfolio management is indispensable.

We had the pleasure of learning from some of the most thoughtful investors in the business.com or click on the links below. SUBSCRIBE TODAY! www.be/Kp0-QIqfqWI Watch our interview with value investment manager Massimo Fuggetta at http://youtu. Simon Denison-Smith. and Ciccio Azzollini. Watch our interview with Ciccio Azzollini.valuex.com March 2012 – Page 10 of 169 . http://youtu. to name a few. including Guy Spier. Bryan Lawrence. Massimo Fuggetta. All rights reserved.manualofideas. Colin Moran. CEO of Cattolica Partecipazioni at http://youtu. visit The Manual of Ideas Members Area at http://members.com/ ?xgi=4HCgDaXOxu6DMn The second annual VALUEx Zurich/Klosters gathering of value investors took place in early February in Switzerland (www. We are pleased to share with you exclusive video interviews with the latter three fund managers.manualofideas. click here to set up your member profile or type the following into your browser: http://members.Value-oriented Equity Investment Ideas for Sophisticated Investors Online Only: Three Exclusive Interviews If you have never before logged into the online Members Area. Whitney Tilson. To watch the video interviews.ch).manualofideas. investment managers of the Londonbased Metropolis Valuefund.be/Kc93t3N48oc Watch our interview with Jonathan Mills and Simon Denison-Smith.be/RCfxtmxlfco © 2008-2012 by BeyondProxy LLC.

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com March 2012 – Page 12 of 169 . Tiger Global James Crichton. Baupost Eddie Lampert. Weitz Funds David Winters. Brave Warrior Mason Hawkins. Centaur Capital Jonathan Auerbach. For example. Children’s Investment Fund Carl Icahn. the size of a position relative to the market value of the corresponding company. Wintergreen Meryl Witmer. Markel Gayner Kian Ghazi. Lane Five Larry Robbins. Altai Capital David Tepper. All rights reserved. Second Curve Warren Buffett. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Bill Ackman. as judged by the MOI. including the size of a position in an investor’s portfolio. such a holding might represent 19. Glenview Alexander Roepers. The following analysis is based on Schedules 13F-HR (institutional holdings report) filed with the SEC for the most recent quarter. Scout Ian Cumming and Joe Steinberg. Fairfax Wally Weitz. Gates Capital Tom Gayner. Pabrai Funds John Paulson. 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. Chou Associates Chase Coleman. and the change in the stock price of a position since the most recent quarterly filing date. Southeastern Lance Helfert and Paul Orfalea. Deephaven Prem Watsa.manualofideas. resulting in a holding that is simply too small to rank highly based on size alone. We choose these investors carefully to avoid the noise inherent in most 13F-HR filings. Icahn Robert Jaffe. 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. ValueAct Ed Wachenheim. Berkshire Hathaway Francis Chou. Pennant Glenn Fuhrman and John Phelan. Atlantic Investment Wilbur Ross. We look for investors who have amassed impressive track records over long periods of time.Value-oriented Equity Investment Ideas for Sophisticated Investors 50+ Portfolios With Signal Value™ Revealing the Top Ideas of Top Investors “Signal value” as opposed to “noise. Teton Capital Dan Loeb. West Coast Chris Hohn. Paulson & Co.9% of the shares outstanding of the subject company. Our proprietary methodology takes into account a number of variables. Boone Pickens. H Partners Robert Karr. BP Capital Mark Rachesky. Breeden Capital Tom Brown. SUBSCRIBE TODAY! www.” We present the holdings of some of the world’s top investors. Lone Pine Sandy Nairn. Sageview Glenn Greenberg. Akre Capital Zeke Ashton. Int’l Value Advisors David Einhorn. Greenlight Phil Falcone. Force Capital Rehan Jaffer. Third Point Steve Mandel. thereby suggesting that the investor has bought as much of the subject company as is practically feasible. ESL Investments Quincy Lee. On the other hand. GoldenTree Jeffrey Ubben. “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. Hawkshaw Ed Gilhuly and Scott Stuart. Harbinger Alan Fournier. This might be the case if an investor invests in a small company. Hound Partners Brian Bares. Eagle Value © 2008-2012 by BeyondProxy LLC. Bares Capital Bruce Berkowitz. MSD Capital Jeffrey Gates. Pershing Square Chuck Akre. suggesting a high level of conviction. Eagle Charles de Vaulx. MHR Lisa Rapuano. Fairholme Richard Breeden. the most recent quarterly change in the number of shares owned. WL Ross Toby Symonds. Our estimate of the conviction level would rise further if the subject company has a 20% poison-pill threshold. Edinburgh Partners Mohnish Pabrai. Leucadia Boykin Curry. an investor might have the most conviction in a position that is only the tenth-largest position in such investor’s portfolio. Appaloosa Steve Tananbaum. Joho Capital Seth Klarman.

management quality and cash flow-oriented valuation analysis. All rights reserved.501 135 734 1.3x 1.878 50.709 Price Recent ($) 51.284 10.956 194.29 396.) This FY 18x 26x 22x 77x 18x 17x 9x n/m 17x 19x Next FY 16x 25x 18x 41x 15x 15x 8x 11x 16x 16x Price/ Tang.7x Financial 40% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Other 2% Technology 2% Services 56% Based on equity holdings disclosed in 13F-HR filings with the SEC.91 29.6x 1.403 69 6. <1% 1% <1% <1% <1% <1% 3% 2% <1% <1% Fund* 12% 8% 10% 13% 12% 4% 7% 0% 4% 7% P/E (Est.2x >9.91 83.1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Ross Stores / ROST Markel / MKL Dollar Tree / DLTR American Tower / AMT MasterCard / MA Berkshire Hathaway / BRK.14 86.9x 2.01 83.91 ∆ from Dec.875 50.A CarMax / KMX New Positions Exxon Mobil / XOM Sold Out Positions Middleburg Financial / MBRG Portfolio Metrics Portfolio size * Sector Weightings $654 million 83% $9.875 11.284 194.6x 5.com March 2012 – Page 13 of 169 .4x 2. holdings. SUBSCRIBE TODAY! www.501 192 734 135 492 550 1.903 1.96 86. © 2008-2012 by BeyondProxy LLC.83 407.3 billion $46 billion 18x 15x 2.777 Price Recent ($) 63. While sometimes viewed as a small cap growth manager.9x 8.14 117. 30 5% 9% 6% 4% -2% -1% 4% 16% 3% -2% Shares Owned Recent (‘000) 1. Book n/m 8.1x n/m >9.0x 2. leverage.83 63.S.Value-oriented Equity Investment Ideas for Sophisticated Investors Akre Capital (Chuck Akre) Chuck Akre has been in the investment business since 1968. Excludes portfolio cash.A Enstar Group / ESGR Primo Water / PRMW CarMax / KMX O’Reilly Automotive / ORLY Top Holdings of Akre Capital – By Dollar Value Market Value ($mn) 24.3x 5.878 3.980 97. <1% <1% <1% <1% 1% 3% <1% 1% <1% <1% Fund* 13% 12% 12% 10% 8% 7% 7% 6% 4% 4% P/E (Est.387 1. 30 9% -2% 4% 5% 6% 3% -1% -4% -2% 4% Shares Owned Recent (‘000) 1.) This FY 77x 18x 18x 22x 26x 9x 19x >99x 17x 17x Next FY 41x 16x 15x 18x 25x 8x 16x >99x 15x 16x Price/ Tang.80 117.95 396. 30 >100% 2% 2% 1% 2% >100% 5% >100% 0% 2% Holdings as % of Co.335 3.335 24.403 10.01 2.96 97. Book 8.manualofideas.95 407.925 1.1x 1. 30 1% >100% 2% 2% 2% 5% 2% -11% >100% 0% Holdings as % of Co.980 29.777 10.45 31.387 192 0 492 477 806 550 ∆ from Sep.903 6.2x 1.6x 1 2 3 4 5 6 7 8 9 10 Company / Ticker American Tower / AMT Ross Stores / ROST MasterCard / MA Dollar Tree / DLTR Markel / MKL Enstar Group / ESGR O’Reilly Automotive / ORLY Lamar Advertising / LAMR Berkshire Hathaway / BRK. MOI Signal Rank™ – Top Current Ideas of Akre Capital Market Value ($mn) 11.1x n/m 2.709 2.6x 8.282 0 806 ∆ from Sep.0x 1. certain non-U. Akre follows a value strategy that focuses on returns on equity.925 10. and non-equity securities.45 ∆ from Dec.29 51.

3x .189 2.242 2.566 6.com March 2012 – Page 14 of 169 . 30 -29% 51% 10% 50% -20% -34% 40% 63% -90% -90% Holdings as % of Co. Book n/m 1. formerly of Stamford-based SAC Capital.075 418 68 ∆ from Sep.6x Energy 33% Technology 16% * Other 2% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 49% Based on equity holdings disclosed in 13F-HR filings with the SEC.566 1. Excludes portfolio cash.51 10. formerly of New York-based Anchorage Capital.3x 2.57 5.S.Value-oriented Equity Investment Ideas for Sophisticated Investors Altai Capital (Toby Symonds) Altai Capital was founded in 2009 by Rishi Bajaj.manualofideas.7x n/m n/m n/m 1 2 3 4 5 6 7 8 Company / Ticker McMoRan Exploration / MMR MEMC Electronic / WFR Energy XXI / EXXI Dynegy / DYN ReachLocal / RLOC IntraLinks / IL Leap Wireless / LEAP Six Flags / SIX Top Holdings of Altai Capital – By Dollar Value Market Value ($mn) 2.52 9.420 3.180 6.666 1.7x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Six Flags / SIX McMoRan Exploration / MMR Energy XXI / EXXI MEMC Electronic / WFR IntraLinks / IL Leap Wireless / LEAP Dynegy / DYN ReachLocal / RLOC iSoftStone / ISS RealD / RLD New Positions None Sold Out Positions Blue Coat Systems / BCSI Eastman Kodak / EK Portfolio Metrics Portfolio size * Sector Weightings $284 million 100% $715 million $1.08 13.075 1. 30 14% -7% 18% 37% 4% -2% -40% 38% 15% 50% Shares Owned Recent (‘000) 2.65 8.39 37.8x 3.10 11.7x 2.4x .877 203 250 354 715 2.134 6. MOI Signal Rank™ – Top Current Ideas of Altai Capital Market Value ($mn) 2.57 37.138 1.420 ∆ from Sep. and non-equity securities.90 ∆ from Dec.7x n/m n/m .09 47. value-oriented equity investment ideas.1x 7.51 6.4x . © 2008-2012 by BeyondProxy LLC.65 8.313 1.2 billion 18x 19x 2.7x 2.) This FY 84x n/m 10x 18x 15x n/m n/m n/m 18x 25x Next FY 64x n/m 8x 19x 14x n/m n/m n/m 13x 28x Price/ Tang. SUBSCRIBE TODAY! www. formerly of Greenwich-based Silver Point Capital. leverage.134 6. 2% 3% 1% 5% 4% 3% 2% 4% Fund* 17% 12% 15% 4% 3% 4% 4% 40% P/E (Est.189 1. 4% 2% 1% 3% 3% 2% 5% 4% <1% <1% Fund* 40% 17% 15% 12% 4% 4% 4% 3% 1% 0% P/E (Est.591 Price Recent ($) 13. 30 51% 50% 10% 40% 63% -20% -34% -29% Holdings as % of Co. holdings.180 2.09 1.52 9.138 1.591 2. 30 -7% 37% 18% -40% 38% 4% -2% 14% Shares Owned Recent (‘000) 3. The firm manages a highly concentrated portfolio of high-conviction. All rights reserved.39 6. Book 1.666 1. certain non-U.242 354 715 203 250 561 648 Price Recent ($) 47.60 5.313 1.877 1.) This FY n/m 18x 10x n/m n/m 15x n/m 84x Next FY n/m 19x 8x n/m n/m 14x n/m 64x Price/ Tang.60 1. and Steve Tesoriere.08 ∆ from Dec. Toby Symonds.1x 7.

91 30.1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Apple / AAPL Google / GOOG Microsoft / MSFT Valeant Pharma / VRX Penn National Gaming / PENN Credit Acceptance / CACC CBS / CBS Dell / DELL Liberty Global / LBTYA BofI Holding / BOFI New Positions Apple / AAPL Bank of America / BAC Charter Comms / CHTR Chemtura / CHMT Dell / DELL Level 3 Comms / LVLT Penn National Gaming / PENN Sold Out Positions Aon / AON Bancorp / TBBK Clear Channel / CCO NXP Semiconductors / NXPI Portfolio Metrics Portfolio size * Sector Weightings $213 million 74% $4. Book 5. net of fees. <1% <1% <1% <1% <1% <1% 5% <1% <1% <1% Fund* 7% 11% 11% 9% 5% 2% 4% 4% 3% 6% P/E (Est.4x 5. Book 8. holdings.8x Financial 15% * Other 19% Technology 37% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Based on equity holdings disclosed in 13F-HR filings with the SEC.47 493. 30 9% 22% -6% 3% 21% 3% 3% -1% 24% 13% Shares Owned Recent (‘000) 342 50 40 406 641 79 569 334 295 130 ∆ from Sep. Excludes portfolio cash.4x 4.306 190 1. 30 new new 23% 7% new new 0% 49% new 0% Holdings as % of Co.55 16.42 605.66 ∆ from Dec.4 billion $46 billion 14x 12x 1.244 2.8x n/m 4.392 2.172 190 Price Recent ($) 493.4x 4. 30 new 23% -22% 7% new 0% -20% new 0% 0% Holdings as % of Co.90 17. 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%.1x 1.888 13.67 ∆ from Dec.0x 6.75 58.) This FY 12x 14x 11x n/a 19x 11x 16x 8x n/m 8x Next FY 10x 12x 10x n/a 15x 10x 13x 9x 32x 8x Price/ Tang.91 47.9x n/m 1.) This FY 19x 12x 14x n/a 8x n/m 8x n/m n/m 11x Next FY 15x 10x 12x n/a 9x >99x 8x n/m n/m 10x Price/ Tang.9x n/m 1.888 6.379 Price Recent ($) 41.877 14.Value-oriented Equity Investment Ideas for Sophisticated Investors Ancient Art / Teton (Quincy Lee) Quincy Lee is an Austin.003 255.050 197.4x 4.050 197.597 31.310 3.75 48.0x n/m >9. <1% <1% <1% <1% <1% <1% <1% <1% <1% 5% Fund* 11% 11% 9% 9% 7% 6% 5% 5% 5% 4% P/E (Est.003 14.42 605. / TK Level 3 Comms / LVLT Credit Acceptance / CACC Top Holdings of Teton Capital / Ancient Art – By Dollar Value Market Value ($mn) 460.manualofideas. All rights reserved.59 16.15 92. MOI Signal Rank™ – Top Current Ideas of Teton Capital / Ancient Art Market Value ($mn) 3.809 4. SUBSCRIBE TODAY! www. 30 22% -6% 17% 3% 9% 13% 10% 21% 18% 3% Shares Owned Recent (‘000) 50 40 645 406 342 130 384 641 214 569 ∆ from Sep.67 29. and non-equity securities.47 92.91 17.4x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Penn National Gaming / PENN Apple / AAPL Google / GOOG Valeant Pharma / VRX Dell / DELL Charter Comms / CHTR BofI Holding / BOFI Teekay Corp. certain non-U.S.91 41.66 26.379 19.33 21.1x n/m 8.50 47. Services 28% © 2008-2012 by BeyondProxy LLC.244 460.310 31.4x n/m >9. leverage.com March 2012 – Page 15 of 169 .

10 45% 8. SUBSCRIBE TODAY! www.42 22% 5.manualofideas.392 1.798 new 1. 30 5.211 1. 30 182 >100% 7. (AMR) Applied Materials / AMAT BP / BP Citigroup / C Dana Holding / DAN Delta Air Lines / DAL E*Trade Financial / ETFC Google / GOOG HollyFrontier / HFC KB Home / KBH KLA-Tencor / KLAC Lam Research / LRCX Micron Technology / MU Mosaic Company / MOS Navistar / NAV Owens Corning / OC Pulte Homes / PHM Ryland Group / RYL SuperMedia / SPMD Temple-Inland / TIN Teradyne / TER Tesoro / TSO Western Refining / WNR Portfolio Metrics Portfolio size * Sector Weightings $864 million 74% $6.4x n/m >9.5x >9. 30 27. where he had been the head trader on Goldman’s high-yield desk.964 8. Book 5.3x Other 44% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Energy 22% Financial 17% Based on equity holdings disclosed in 13F-HR filings with the SEC.057 -45% 1.5x n/m n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker CVR Energy / CVI Royal Bank Scotland / RBS Apple / AAPL Goodyear Tire / GT Dean Foods / DF Boston Scientific / BSX Oracle / ORCL Calumet Specialty / CLMT US Airways / LCC Mueller Water / MWA New Positions Boston Scientific / BSX Delphi Automotive / DLPH Oracle / ORCL Sold Out Positions AMR Corp.69 -5% 22.179 -22% 1. 30 493.145 460.99 23% Shares Owned Recent ∆ from (‘000) Sep.88 -2% 19.211 26.com March 2012 – Page 16 of 169 .435 468 Price Recent ∆ from ($) Dec.964 1.238 -65% 9.50 11% 8. MOI Signal Rank™ – Top Current Ideas of Appaloosa Market Value ($mn) 460.119 0% 182 >100% 6.050 8.50 11% 22.346 26.) This Next FY FY 7x 8x n/a n/a 12x 10x 7x 6x 15x 12x 14x 12x 12x 11x 19x 11x 4x 4x n/m 43x Price/ Tang.4x 9. leverage.275 -5% 229 new Holdings as % of Co.3x . Technology 17% © 2008-2012 by BeyondProxy LLC.93 11% 28. Tepper’s specialty is in distressed investments and special situations.4x .798 new 1.145 1.4x >9.69 -5% 5. Excludes portfolio cash.3x n/m 2.119 0% 6.806 8.0x 1 2 3 4 5 6 7 8 8 10 Company / Ticker Apple / AAPL Boston Scientific / BSX Oracle / ORCL Royal Bank Scotland / RBS Dean Foods / DF Calumet Specialty / CLMT Goodyear Tire / GT Hartford Financial / HIG Hartford Financial / HIG Delphi Automotive / DLPH Top Holdings of Appaloosa – By Dollar Value Market Value ($mn) 2.861 Price Recent ∆ from ($) Dec. Fund* <1% 10% <1% 5% <1% 4% <1% 11% 3% 8% 3% 3% 2% 10% <1% 3% <1% 3% <1% 1% P/E (Est.42 22% 13. and non-equity securities. Fund* 6% 16% <1% 11% <1% 10% 2% 10% 3% 8% <1% 5% <1% 4% 3% 3% 2% 3% 6% 3% P/E (Est. which he founded in 1993 after leaving Goldman Sachs. certain non-U.289 -3% 6.90 22% 19. holdings.26 10% 13.179 -22% 7.88 -2% 10.275 -5% 1.785 143.Value-oriented Equity Investment Ideas for Sophisticated Investors Appaloosa (David Tepper) Tepper heads Appaloosa Management.219 new 11.9x .219 new 1.442 -11% Holdings as % of Co.9x 2.85 75% 2.9x .057 -45% 6.005 -21% 11.785 143.77 38% 10.806 9. All rights reserved.392 8.147 1. Book 2.S.77 38% 493.050 3.93 11% 28.147 3.90 22% 30.9x n/m n/m >9.289 -3% 3.) This Next FY FY 12x 10x 14x 12x 12x 11x n/a n/a 15x 12x 19x 11x 7x 6x 6x 5x 6x 5x 8x 7x Price/ Tang.04 39% Shares Owned Recent ∆ from (‘000) Sep.3x 5.1 billion $35 billion 11x 10x 2.26 10% 8.

120 Price Recent ($) 83. 2% 3% 3% 4% 5% <1% <1% <1% <1% <1% Fund* 15% 14% 15% 12% 17% 2% 3% 2% 1% 1% P/E (Est.021 5.7x n/m 2.6x Technology 14% * Other 5% Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Capital Goods 43% Based on equity holdings disclosed in 13F-HR filings with the SEC.614 2.248 1.13 64.155 3.7x n/m 2.98 54.9x n/m 5.230 1. disciplined. / JAH McKesson / MCK Nalco Holding / NLC Newell Rubbermaid / NWL Stanley Black Decker / SWK Timken / TKR Portfolio Metrics Portfolio size * Sector Weightings $1.97 ∆ from Dec.35 76.13 115.38 ∆ from Dec.35 43.98 24. 30 3% new 33% 23% -16% new new new 4% 1% Holdings as % of Co.5 billion 12x 11x 5.manualofideas.50 48.409 3.68 41.75 115.508 4.02 37.2 billion 96% $5.499 5.28 83.669 2. optimistic and trying hard to not take himself (or life’s travail) too seriously.248 2. certain non-U. In an interview with hedgefundnews.300 8. Book 7.) This FY 11x 12x 15x 11x 9x 17x 14x 12x 13x 6x Next FY 10x 11x 13x 10x 8x 13x 13x 11x 11x 7x Price/ Tang.669 3.970 6.614 3. 30 25% 12% 16% -2% 12% 20% 37% 31% 12% 62% Shares Owned Recent (‘000) 8.75 76. Book n/m 7.240 590 600 748 369 300 ∆ from Sep.28 49.409 5.9x 5.9x 9.Value-oriented Equity Investment Ideas for Sophisticated Investors Atlantic Investment (Alexander Roepers) Alexander Roepers founded Atlantic in 1988. leverage.50 27. persistent. and non-equity securities. holdings. Excludes portfolio cash.” MOI Signal Rank™ – Top Current Ideas of Atlantic Investment Management Market Value ($mn) 8.0 billion $6.7x n/m n/m >9.02 49.com Roepers described himself as “family-oriented.7x n/m n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Owens Illinois / OI Joy Global / JOY Flowserve / FLS Energizer Holdings / ENR Ashland / ASH Kennametal / KMT Rockwood Holdings / ROC Harman International / HAR Crown Holdings / CCK Solutia / SOA New Positions Harman International / HAR Joy Global / JOY Kennametal / KMT Rockwood Holdings / ROC Sold Out Positions Curtiss-Wright Corp.021 6.508 3. 30 new 23% 33% new 3% new new 4% 30% 71% Holdings as % of Co.499 4.019 3.10 43. All rights reserved.S.155 5. 30 12% -2% 16% 20% 25% 31% 37% 12% 4% 27% Shares Owned Recent (‘000) 2. SUBSCRIBE TODAY! www. 5% 2% 3% 3% 3% 4% <1% <1% <1% <1% Fund* 17% 15% 15% 14% 13% 12% 3% 2% 2% 2% P/E (Est.535 3.com March 2012 – Page 17 of 169 .85 54.230 2.6x 3.831 5.970 5.) This FY 9x 11x 15x 12x 11x 11x 14x 17x 12x 13x Next FY 8x 10x 13x 11x 9x 10x 13x 13x 11x 11x Price/ Tang. Basic Materials 38% © 2008-2012 by BeyondProxy LLC.240 2.2x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Joy Global / JOY Energizer Holdings / ENR Flowserve / FLS Kennametal / KMT Owens Illinois / OI Harman International / HAR Rockwood Holdings / ROC Crown Holdings / CCK Crane Co. / CW Jarden Corp.419 Price Recent ($) 24.992 3.300 600 590 748 760 ∆ from Sep.992 8.85 37. / CR TRW Automotive / TRW Top Holdings of Atlantic Investment Management – By Dollar Value Market Value ($mn) 3.6x n/m n/m 3.

manualofideas.53 40.com to request a free copy of Brian’s book.29 6.58 5.com / BIDZ Level 3 Comms / LVLT OneBeacon Insurance / OB Winthrop Realty / FUR Portfolio Metrics Portfolio size ** Sector Weightings $418 million 73% $964 million $18 billion 18x 15x 2.647 849 2.013 1.57 6.S.28 27.Value-oriented Equity Investment Ideas for Sophisticated Investors Bares Capital (Brian Bares) Brian Bares started his investment firm. Bares Capital Management is quite unique in the institutional asset management world. / ININ American Public Ed.140 3.53 61.com March 2012 – Page 18 of 169 .* MOI Signal Rank™ – Top Current Ideas of Bares Capital Management Market Value ($mn) 427 109 147 324 52 305 520 725 2.51 27. leverage. SUBSCRIBE TODAY! www. certain non-U.28 10.10 61. 30 -4% 20% 7% 24% 16% -6% 19% 18% 16% -2% Shares Owned Recent (‘000) 2. and non-equity securities.65 33.84 ∆ from Dec.843 132 Price Recent ($) 22. / APEI Colfax / CFX Hallmark Financial / HALL Top Holdings of Bares Capital Management – By Dollar Value Market Value ($mn) 427 520 305 324 147 725 766 2. All rights reserved.25 40. 30 1% 1% 0% 15% 3% 12% 16% 15% -42% 0% Holdings as % of Co.57 30.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker INTL FCStone / INTL Utah Medical / UTMD Female Health / FHCO Dolan Media / DM Tandy Leather / TLF Winmark / WINA Interactive Intell.95 5.907 ∆ from Sep. Bares Capital Management. Based on equity holdings disclosed in 13F-HR filings with the SEC. Bares is author of The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns.9x .0x 5.9x . 30 1% 1% 3% 15% 0% 0% 1% 12% 15% 0% Holdings as % of Co.6x >9.240 849 3.84 ∆ from Dec.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker INTL FCStone / INTL Interactive Intell.8x >9.9x 5.6x 6. focusing initially on micro-cap public companies.907 ∆ from Sep.15 33. The firm launched a small-cap institutional strategy in 2001 and now manages assets in two value-oriented strategies.com / STMP Hallmark Financial / HALL New Positions Kinder Morgan Mgmt / KMR Travelzoo / TZOO Sold Out Positions American Dental / ADPI BIDZ. Excludes portfolio cash.0x >9.140 413 460 482 457 1.240 413 482 1.) This FY 9x 15x n/a 26x n/a n/a 32x 20x 21x n/m Next FY n/a 13x n/a 18x n/a n/a 25x 17x 16x >99x Price/ Tang. Technology 24% © 2008-2012 by BeyondProxy LLC. / ININ Winmark / WINA Dolan Media / DM Female Health / FHCO American Public Ed. Book 1.25 10.6x >9.9x 4.783 413 4. 15% 12% 17% 10% 15% 2% 2% <1% 3% 10% Fund* 15% 15% 12% 8% 5% 4% 4% 4% 3% 3% P/E (Est. holdings.) This FY 9x 32x n/a 26x n/a 20x 30x 21x 23x n/m Next FY n/a 25x n/a 18x n/a 17x 26x 16x 18x >99x Price/ Tang.8x n/m 8.6x n/m 1.65 36.843 455 132 Price Recent ($) 22. in 2000.013 4.8x 5.3x Services 22% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * ** Other 23% Financial 32% Email support@manualofideas.783 2. Book 1. as it has adhered to a disciplined business strategy.6x 6.9x n/m 8. 15% 11% 15% 10% 16% 17% 12% 2% <1% 10% Fund* 15% 3% 5% 8% 2% 12% 15% 4% 4% 3% P/E (Est. / APEI Stratasys / SSYS Colfax / CFX Stamps. limiting the growth of assets under management to benefit investment performance. 30 -4% 11% 16% 24% 5% 7% 20% -6% 18% -2% Shares Owned Recent (‘000) 2.58 5.51 29.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 203 590 1,407 47,979 368 1,937 359 266 255,877 1,153 Price Recent ($) 6.07 13.65 16.53 19.18 10.56 45.22 7.43 3.04 30.50 10.92 ∆ from Dec. 30 9% -21% -25% 8% -5% -2% 11% 12% 17% 47% Shares Owned Recent (‘000) 6,000 5,085 14,226 25,700 4,000 10,500 9,001 8,787 12,000 5,665 ∆ from Sep. 30 new 2% 0% 1% 0% 0% 0% 0% 0% >100% Holdings as % of Co. 18% 12% 17% 1% 11% 25% 19% 10% <1% 5% Fund* 1% 2% 7% 14% 1% 14% 2% 1% 11% 2% P/E (Est.) This FY n/m 20x n/m 14x 30x 52x n/a 8x 11x n/m Next FY n/m n/m n/m 11x 19x 48x n/a n/a 10x n/m Price/ Tang. Book 1.1x 2.4x n/m >9.9x 2.0x 2.6x 1.8x .9x 6.1x n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Targacept / TRGT AVEO Pharma / AVEO Theravance / THRX News Corp. / NWSA Syneron Medical / ELOS ViaSat / VSAT Enzon Pharma / ENZN Alliance One / AOI Microsoft / MSFT Idenix Pharma / IDIX

Top Holdings of Baupost – By Dollar Value
Market Value ($mn) 147,159 56,721 47,979 1,937 255,877 1,407 3,044 4,288 590 359 Price Recent ($) 46.35 28.70 19.18 45.22 30.50 16.53 34.07 8.74 13.65 7.43 ∆ from Dec. 30 8% 11% 8% -2% 17% -25% 13% 33% -21% 11% Shares Owned Recent (‘000) 12,000 18,750 25,700 10,500 12,000 14,226 4,013 10,000 5,085 9,001 ∆ from Sep. 30 -13% -10% 1% 0% 0% 0% 15% 0% 2% 0% Holdings as % of Co. <1% <1% 1% 25% <1% 17% 4% 2% 12% 19% Fund* 16% 16% 14% 14% 11% 7% 4% 3% 2% 2% P/E (Est.) This FY 7x 7x 14x 52x 11x n/m 92x 7x 20x n/a Next FY 7x 6x 11x 48x 10x n/m 20x 5x n/m n/a Price/ Tang. Book 1.9x n/m >9.9x 2.6x 6.1x n/m 5.6x .3x 2.4x 1.8x

1 2 3 4 5 6 7 8 9 10

Company / Ticker BP / BP Hewlett-Packard / HPQ News Corp. / NWSA ViaSat / VSAT Microsoft / MSFT Theravance / THRX Allied Nevada Gold / ANV Genworth Financial / GNW AVEO Pharma / AVEO Enzon Pharma / ENZN

New Positions
Targacept / TRGT

Sold Out Positions
BreitBurn Energy / BBEP
*

Portfolio Metrics
Portfolio size

Sector Weightings
$3.4 billion 88% $1.2 billion $24 billion 11x 11x 1.9x
Energy 16%

*, **

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Other 26% Technology 40%

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.

Health Care 18%

**

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.

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March 2012 – Page 19 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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. Berkshire has hired Todd Combs and Ted Weschler to help Buffett manage the portfolio and succeed him eventually. MOI Signal Rank™ – Top Current Ideas of Berkshire Hathaway
Market Value ($mn) 226,790 159,577 175,951 154,308 3,003 60,176 8,534 1,473 32,111 95,929 Price Recent ($) 192.42 30.26 63.88 67.94 389.02 51.81 38.44 13.99 45.51 72.25 ∆ from Dec. 30 5% 10% -4% -3% 3% 10% 14% 38% 6% -1% Shares Owned Recent (‘000) 63,906 383,704 76,766 200,000 1,728 151,611 28,415 17,072 20,348 29,101 ∆ from Sep. 30 11% 6% 0% 0% 0% 0% 0% 0% >100% 0% Holdings as % of Co. 5% 7% 3% 9% 22% 13% 13% 16% 3% 2% Fund* 18% 17% 7% 20% 1% 11% 2% 0% 1% 3% P/E (Est.) This FY 13x 9x 16x 17x 18x 12x 15x n/m 13x 9x Next FY 12x 8x 15x 15x 23x 11x 13x n/m 10x 8x Price/ Tang. Book n/m 1.8x n/m >9.9x 5.0x 3.2x n/m 9.4x n/m 1.6x

1 2 3 4 5 6 7 8 9 10

Company / Ticker IBM / IBM Wells Fargo / WFC Procter & Gamble / PG Coca-Cola / KO Washington Post / WPO American Express / AXP Moody’s / MCO USG / USG DIRECTV / DTV ConocoPhillips / COP

Top Holdings of Berkshire Hathaway – By Dollar Value
Market Value ($mn) 154,308 226,790 159,577 60,176 175,951 68,161 211,989 95,929 55,363 176,413 Price Recent ($) 67.94 192.42 30.26 51.81 63.88 38.58 61.90 72.25 29.01 64.60 ∆ from Dec. 30 -3% 5% 10% 10% -4% 3% 4% -1% 7% -1% Shares Owned Recent (‘000) 200,000 63,906 383,704 151,611 76,766 87,035 39,037 29,101 69,039 29,018 ∆ from Sep. 30 0% 11% 6% 0% 0% -3% 0% 0% 0% -23% Holdings as % of Co. 9% 5% 7% 13% 3% 5% 1% 2% 4% 1% Fund* 20% 18% 17% 11% 7% 5% 4% 3% 3% 3% P/E (Est.) This FY 17x 13x 9x 12x 16x 17x 14x 9x 11x 13x Next FY 15x 12x 8x 11x 15x 15x 13x 8x 10x 12x Price/ Tang. Book >9.9x n/m 1.8x 3.2x n/m n/m 4.5x 1.6x 2.8x 6.5x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Coca-Cola / KO IBM / IBM Wells Fargo / WFC American Express / AXP Procter & Gamble / PG Kraft Foods / KFT Wal-Mart / WMT ConocoPhillips / COP U.S. Bancorp / USB Johnson & Johnson / JNJ

New Positions
DaVita / DVA Liberty Media / LMCA

Sold Out Positions
Exxon Mobil / XOM

Portfolio Metrics
Portfolio size

*

Sector Weightings
$69 billion 90% $56 billion $83 billion 13x 12x 2.9x
Technology 18%

*, **

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Other 17% Financial 33%

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.

**

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 32%

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March 2012 – Page 20 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 2,189 14,590 147,159 16,462 13,610 35,035 3,527 3,107 293 401,671 Price Recent ($) 13.57 22.13 46.35 50.21 17.79 82.66 43.95 7.46 36.94 83.80 ∆ from Dec. 30 -7% -1% 8% 31% 22% 22% -1% -9% -7% -1% Shares Owned Recent (‘000) 1,096 570 402 163 515 179 49 1,181 245 94 ∆ from Sep. 30 0% 0% 0% new 0% 0% new 0% 0% 0% Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% 3% <1% Fund* 10% 9% 13% 6% 6% 10% 1% 6% 6% 5% P/E (Est.) This FY n/m 8x 7x 34x 21x 14x 46x n/m 18x 10x Next FY n/m 11x 7x 17x 12x 12x 22x >99x 12x 9x Price/ Tang. Book 1.3x 1.1x 1.9x 1.3x 2.8x 4.7x 6.0x 1.8x 1.5x 2.6x

1 2 3 4 5 6 7 8 9 10

Company / Ticker McMoRan Exploration / MMR Chesapeake Energy / CHK BP / BP Transocean / RIG Weatherford / WFT Nat.-Oilwell Varco / NOV Golar LNG / GLNG SandRidge Energy / SD Dawson Geophysical / DWSN Exxon Mobil / XOM

Top Holdings of BP Capital – By Dollar Value
Market Value ($mn) 147,159 2,189 35,035 14,590 13,610 293 26,112 3,107 16,462 401,671 Price Recent ($) 46.35 13.57 82.66 22.13 17.79 36.94 64.65 7.46 50.21 83.80 ∆ from Dec. 30 8% -7% 22% -1% 22% -7% 4% -9% 31% -1% Shares Owned Recent (‘000) 402 1,096 179 570 515 245 140 1,181 163 94 ∆ from Sep. 30 0% 0% 0% 0% 0% 0% 0% 0% new 0% Holdings as % of Co. <1% <1% <1% <1% <1% 3% <1% <1% <1% <1% Fund* 13% 10% 10% 9% 6% 6% 6% 6% 6% 5% P/E (Est.) This FY 7x n/m 14x 8x 21x 18x 11x n/m 34x 10x Next FY 7x n/m 12x 11x 12x 12x 10x >99x 17x 9x Price/ Tang. Book 1.9x 1.3x 4.7x 1.1x 2.8x 1.5x 1.7x 1.8x 1.3x 2.6x

1 2 3 4 5 6 7 8 9 10

Company / Ticker BP / BP McMoRan Exploration / MMR Nat.-Oilwell Varco / NOV Chesapeake Energy / CHK Weatherford / WFT Dawson Geophysical / DWSN Devon Energy / DVN SandRidge Energy / SD Transocean / RIG Exxon Mobil / XOM

New Positions
Golar LNG / GLNG Transocean / RIG

Sold Out Positions
EOG Resources / EOG

Portfolio Metrics
Portfolio size

*

Sector Weightings
$148 million 77% $28 billion $56 billion 14x 11x 1.9x

*, **

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Transportation 1%

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.

Energy 99%

**

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.

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March 2012 – Page 21 of 169

362 1.047 73.0x n/m n/m 4.028 1. MOI Signal Rank™ – Top Current Ideas of Brave Warrior Market Value ($mn) 197.508 784 164 ∆ from Sep.56 90.0x n/m n/m >9.363 143. was founded in 1984 by Glenn Greenberg and John Shapiro. formerly called Chieftain Capital Management.211 15.448 55.430 55. Book 4.9x 2. 1% <1% 2% <1% <1% <1% 6% <1% <1% <1% Fund* 16% 14% 12% 10% 8% 7% 6% 6% 5% 5% P/E (Est. Brave Warrior’s long-term performance record is believed to feature mid teens annualized investment returns.S.91 47.) This FY 14x n/a 18x 22x 11x 12x 13x 9x 19x 16x Next FY 12x n/a 15x 19x 10x 11x 12x 9x 16x 14x Price/ Tang. 30 3% 13% 4% new 3% new new 23% 7% -10% Holdings as % of Co.922 50. The firm runs a concentrated portfolio focused on companies with high returns on capital and sustainable competitive advantage.448 15.01 39.284 Price Recent ($) 47.360 299 2.23 29.manualofideas.9x 1. 30 -6% 3% 15% 28% 7% 11% 14% 6% 12% 2% Shares Owned Recent (‘000) 299 4.40 ∆ from Dec.91 64.086 2. SUBSCRIBE TODAY! www.905 1.03 396.68 113.18 47. Excludes portfolio cash.086 1. Book n/m 4.23 48.422 1.699 8.362 15.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Valeant Pharma / VRX Google / GOOG Fiserv / FISV Comcast / CMCSA Motorola Solutions / MSI U.923 2.635 15.8x >9.157 ∆ from Sep.9x 4.310 197.430 Price Recent ($) 605.601 92. holdings.14 ∆ from Dec. <1% 1% <1% 6% <1% <1% <1% 3% <1% <1% Fund* 14% 16% 10% 6% 7% 2% 4% 3% 2% 8% P/E (Est.375 4. of America / LH MasterCard / MA New Positions Adobe Systems / ADBE Globe Specialty / GSM Oracle / ORCL VistaPrint / VPRT Sold Out Positions Wells Fargo / WFC Portfolio Metrics Portfolio size * Sector Weightings $1.50 32.S.9x >9.310 73.90 47.8x >9.1x 2.360 4.Value-oriented Equity Investment Ideas for Sophisticated Investors Brave Warrior (Glenn Greenberg) Brave Warrior.157 2. 30 13% 3% -7% 4% -10% 3% new -41% -6% -40% Holdings as % of Co.) This FY n/a 14x 13x 18x 16x 11x 22x 14x 14x 18x Next FY n/a 12x 11x 15x 14x 10x 19x 12x 13x 15x Price/ Tang.003 9.18 39. Financial 23% © 2008-2012 by BeyondProxy LLC.91 27. Bancorp / USB VistaPrint / VPRT Aon / AON Lab Corp.959 1.40 29.91 605. and non-equity securities.1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Google / GOOG Valeant Pharma / VRX Comcast / CMCSA VistaPrint / VPRT U. leverage.923 2.23 27.9x n/m n/m >9.S.959 2. All rights reserved.2x >9.3 billion 88% $16 billion $53 billion 14x 12x 2.21 24.003 14. 30 3% -6% 9% 15% 2% 7% 28% 4% 5% 6% Shares Owned Recent (‘000) 4.363 1.01 28. certain non-U.684 274 2.6x Health Care 21% * Other 25% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 31% Based on equity holdings disclosed in 13F-HR filings with the SEC. Bancorp / USB Oracle / ORCL Adobe Systems / ADBE Primerica / PRI Visa / V Motorola Solutions / MSI Top Holdings of Brave Warrior – By Dollar Value Market Value ($mn) 14.com March 2012 – Page 22 of 169 .

008 Price Recent ($) 2.27 30. 30 0% 16% 6% 0% >100% new 0% -13% -8% -27% Holdings as % of Co. and non-equity securities.) This FY 11x 15x 12x 13x 19x 14x 25x 12x 26x 7x Next FY 10x 13x 10x 11x 17x 14x 23x 11x 24x 8x Price/ Tang.656 4.935 807 1.27 75.921 6.80 115.02 58.manualofideas. The fund applies a concentrated. Excludes portfolio cash. 30 -8% 6% 0% 16% -27% -65% -13% -40% >100% 0% Holdings as % of Co.68 ∆ from Dec.008 1.656 3.6x 1.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Zale / ZLC Stanley Black Decker / SWK Flowserve / FLS Helmerich & Payne / HP American Science / ASEI Ashland / ASH Alliant Techsystems / ATK Iron Mountain / IRM H&R Block / HRB Airgas / ARG Top Holdings of Breeden Capital – By Dollar Value Market Value ($mn) 4.77 77.026 1. leverage.S.9x 4.924 5.924 Price Recent ($) 16.08 78.90 75.35 59.633 7.829 687 1. 18% <1% 2% 1% 4% <1% 1% <1% 2% <1% Fund* 2% 9% 17% 13% 4% 3% 3% 7% 17% 8% P/E (Est.771 1. activist investment approach.6x 1. 30 3% 16% 2% 11% 1% 5% -1% 5% 13% 2% Shares Owned Recent (‘000) 7.019 1.3x n/m 5.80 78. 2% 2% 1% <1% <1% 3% <1% 1% 4% 1% Fund* 17% 17% 13% 9% 8% 8% 7% 7% 4% 3% P/E (Est.Value-oriented Equity Investment Ideas for Sophisticated Investors Breeden Capital (Richard Breeden) Richard C.807 5. Securities and Exchange Commission.562 807 733 1.3x Other 39% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 27% Based on equity holdings disclosed in 13F-HR filings with the SEC.681 6.365 687 5.166 733 ∆ from Sep. Book 1.47 16.35 59.921 6. All rights reserved. Breeden founded Breeden Capital Management in 2006.com March 2012 – Page 23 of 169 . Breeden. Energy 13% Capital Goods 20% © 2008-2012 by BeyondProxy LLC.27 ∆ from Dec.) This FY n/m 13x 15x 12x 26x 11x 7x 25x 11x 19x Next FY n/m 11x 13x 10x 24x 9x 8x 23x 10x 17x Price/ Tang. Book >9.365 12.02 64. MOI Signal Rank™ – Top Current Ideas of Breeden Capital Market Value ($mn) 93 12.633 594 388 397 ∆ from Sep.35 30.6x n/m n/m n/m >9.026 1. certain non-U. is a former Chairman of the U.0 billion $5.47 78.9x >9.166 1.409 6.681 6. holdings.08 115.8x 2.2 billion 14x 12x 3.27 77. SUBSCRIBE TODAY! www.9x 5.68 31.10 58.S. born in 1949.8x n/m >9. 30 -24% 11% 16% 2% 13% 12% 2% -1% 3% 1% Shares Owned Recent (‘000) 5.6x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker H&R Block / HRB Flowserve / FLS Helmerich & Payne / HP Stanley Black Decker / SWK Airgas / ARG Steris / STE Iron Mountain / IRM Dun & Bradstreet / DNB American Science / ASEI Alliant Techsystems / ATK New Positions Ashland / ASH Sold Out Positions Aon / AON EMCOR Group / EME Portfolio Metrics Portfolio size * Sector Weightings $694 million 94% $5.562 388 354 397 1.409 6.0x n/m n/m 2.

Centaur Capital serves as advisor to the Centaur family of private partnerships using a value-oriented long/short equity strategy.929 8.74 493. certain non-U.manualofideas.75 30.725 460. Excludes portfolio cash. Includes shares underlying LEAPs and other option positions.725 199 460. which is also managed by Zeke Ashton.8x 5.33 8. Chang’s / PFCB Transatlantic Petro / TAT Western Digital / WDC * Portfolio Metrics Portfolio size Sector Weightings $80 million 64% $1. SUBSCRIBE TODAY! www.06 19. 1. All rights reserved. New Positions Genie Energy / GNE (spun off from IDT) Medtronic / MDT Millipore / MIL Sold Out Positions Alleghany / Y Big Lots / BIG Biglari Holdings / BH Gap / GPS * Himax Tech / HIMX P.73 62.73 Shares Owned ∆ from Dec.103 504 106.364 1. Book >9. / IDT Apple / AAPL Aspen Insurance / AHL Activision Blizzard / ATVI Xerox / XRX Price/ Tang. 2 Shares Owned Recent (‘000) 550 235 120 90 60 150 7 125 420 450 ∆ from Sep.4x >9.002 14.96 56.1x >9.050 41.76 493. a mutual fund utilizing an income-oriented value investing strategy.06 30. Top Holdings of Centaur Value Fund – By Dollar Value Market Value ($mn) 31.986 Price Recent ($) 8. 2 Includes shares underlying LEAPs and other option positions.33 12.9x n/m 6.364 1.42 39.0x 5.) This FY n/a 25x 14x 12x 15x 58x 12x 10x 13x 7x Next FY n/a 20x 12x 11x 12x 11x 10x 9x 11x 6x 1 2 3 4 5 6 7 8 9 10 1 Company / Ticker Millipore / MIL Ancestry.4x .9x Excludes holdings of Tilson Dividend Fund. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 6% 9% 9% 4% 5% 2% 4% 4% 7% 4% P/E (Est.1x .8x >9.42 28.8x 5.com / ACOM Coinstar / CSTR Activision Blizzard / ATVI Millipore / MIL Cisco Systems / CSCO Interactive Brokers / IBKR Diamond Offshore / DO Apple / AAPL Medtronic / MDT Recent (‘000) 460 235 120 420 550 215 248 60 7 90 ∆ from Sep. Book .7 billion $25 billion 14x 12x 1. 30 21% 35% 24% 0% 15% 10% 4% 14% 22% 4% 2 1 2 3 4 5 6 7 8 9 10 1 Company / Ticker Dell / DELL Ancestry.9x Excludes holdings of Tilson Dividend Fund. © 2008-2012 by BeyondProxy LLC.40 12.40 39.888 1.) This FY 8x 25x 14x 13x n/a 11x 12x 15x 12x 12x Next FY 9x 20x 12x 11x n/a 10x 10x 12x 10x 11x Price/ Tang. a Dallas-based investment firm.6x 5.92 ∆ from Dec.745 41. 30 -8% 42% 0% -14% >100% -54% -10% 50% 21% >100% Holdings as % of Co.90 15.9x n/m 6.103 10.F.76 8.33 7. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 10% 9% 9% 7% 6% 5% 5% 5% 4% 4% P/E (Est.8x Financial 18% Health Care 12% Other 7% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 63% Based on equity holdings disclosed in 13F-HR filings with the SEC.9x 2.745 14. which is also managed by Zeke Ashton.2x 2.953 711 8.9x 3. holdings.com / ACOM Coinstar / CSTR Medtronic / MDT Diamond Offshore / DO IDT Corp.5x 1. and non-equity securities.929 Price Recent ($) 17.Value-oriented Equity Investment Ideas for Sophisticated Investors Centaur Value (Zeke Ashton) Zeke Ashton is founder and managing partner of Centaur Capital.com March 2012 – Page 24 of 169 .61 62. 30 >100% 42% 0% >100% 50% 88% 21% 0% -14% -18% Holdings as % of Co. MOI Signal Rank™ – Top Current Ideas of Centaur Value Fund Market Value ($mn) 504 1.0x 3.96 56.S. 30 15% 35% 24% 4% 14% -7% 22% 7% 0% -1% 2 1.050 2. Centaur is also the sub-advisor to the Tilson Dividend Fund.

896 659 3.96 41. certain non-U.3x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker CIT Group / CIT Delphi Automotive / DLPH BankUnited / BKU Visteon Corp. / VC Starwood Hotels / HOT BankUnited / BKU CIT Group / CIT Quad Graphics / QUAD General Motors / GM iStar Financial / SFI Penn National Gaming / PENN Top Holdings of Centerbridge Partners – By Dollar Value Market Value ($mn) 8.S. 30 19% 39% 4% 3% 16% 3% 26% 32% 38% 5% Shares Owned Recent (‘000) 9. / VC Starwood Hotels / HOT Quad Graphics / QUAD General Motors / GM iStar Financial / SFI Royal Bank Scotland / RBS Walter Investment / WAC New Positions Delphi Automotive / DLPH Sold Out Positions None Portfolio Metrics Portfolio size * Sector Weightings $1. For additional background.) This FY 8x 13x 24x 13x 30x 6x 7x n/m 19x Next FY 7x 12x 21x 14x 18x 7x 7x n/m 15x Price/ Tang.116 10.0x 1.956 1. SUBSCRIBE TODAY! www.650 10. Book 9.107 1.145 599 Price Recent ($) 41. and non-equity securities. © 2008-2012 by BeyondProxy LLC. Excludes portfolio cash. All rights reserved.2 billion $9. Prior to founding Centerbridge. Jeffrey Aronson headed distressed debt investing at Angelo.ly/qpJ26Z MOI Signal Rank™ – Top Current Ideas of Centerbridge Partners Market Value ($mn) 9.50 6.221 2.44 55.244 Price Recent ($) 30. holdings.Value-oriented Equity Investment Ideas for Sophisticated Investors Centerbridge (Jeffrey Aronson and Mark Gallogly) Centerbridge.6 billion 13x 12x 1.550 10.9x 2. 30 0% new 0% >100% >100% 0% 6% 0% -41% -91% Holdings as % of Co.4x . leverage.2x n/m . see http://bit. while Mark Gallogly ran a telecom and media buyout fund at Blackstone Group.04 51.3 billion 100% $3.4x 1 2 3 4 5 6 7 8 9 Company / Ticker Delphi Automotive / DLPH Visteon Corp.861 2.83 25.861 2.83 25.manualofideas.0x 2.650 10.229 1.65 14.) This FY 30x 8x 13x 13x 24x 6x 7x n/m n/a n/m Next FY 18x 7x 14x 12x 21x 7x 7x n/m n/a 10x Price/ Tang.107 1.874 2. Book 1.397 12.67 14. founded in 2006. engages in private and public equity as well as distressed debt investing.83 51.83 41. 30 new >100% >100% 0% 0% 0% 6% 0% 0% Holdings as % of Co.242 3.550 2.0x 2.47 ∆ from Dec.96 8.508 162 ∆ from Sep.768 9.397 2.2x n/m .874 695 39.ly/pSlbTF and http://bit.9x Consumer Cyclical 33% * Services 12% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 55% Based on equity holdings disclosed in 13F-HR filings with the SEC.4x 8.116 2. 5% 4% 11% 4% <1% 5% <1% 4% <1% <1% Fund* 30% 28% 19% 8% 7% 3% 2% 2% 1% 0% P/E (Est.65 30.6x >9.768 2.229 1.357 695 39.357 9.242 3.77 21.896 659 26. Gordon & Co. 4% 4% <1% 11% 5% 5% <1% 4% <1% Fund* 28% 8% 7% 19% 30% 3% 2% 2% 0% P/E (Est.956 45 ∆ from Sep.67 22.04 22.221 8.5x 1..44 55.5x 2.0x 9.9x 1.50 6. 30 39% 3% 16% 4% 19% 3% 26% 32% 9% Shares Owned Recent (‘000) 12.6x >9.50 ∆ from Dec.com March 2012 – Page 25 of 169 .

557 4. All rights reserved. 30 8% 11% 2% 5% 11% -3% 38% Shares Owned Recent (‘000) 51.) This FY 14x 14x n/a 14x 12x 8x n/a Next FY 11x 12x n/a 12x 11x 8x n/a Price/ Tang.18 41.330 53. TCI runs a concentrated portfolio that has historically been heavily weighted in industrials. / NWSA Walt Disney / DIS Viacom / VIA Union Pacific / UNP Oracle / ORCL WellPoint / WLP Royal Bank Scotland / RBS New Positions None Sold Out Positions Kansas City Southern / KSU Portfolio Metrics Portfolio size * Sector Weightings $2.590 Price Recent ($) 8.211 22.com March 2012 – Page 26 of 169 .S.9x * Financial Other 3% 2% Transportation 5% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Based on equity holdings disclosed in 13F-HR filings with the SEC.9x >9.18 54.979 74. SUBSCRIBE TODAY! www.77 ∆ from Dec.17 28. 30 0% -4% -25% -12% -48% -39% -74% Holdings as % of Co.Value-oriented Equity Investment Ideas for Sophisticated Investors Children’s Investment (Chris Hohn) Chris Hohn is the founder of London-based The Children’s Investment Fund Management.50 111.293 29. holdings. 2% <1% <1% <1% <1% <1% <1% Fund* 47% 33% 11% 5% 2% 2% 1% P/E (Est.9x >9.293 22.9x n/m 2. Book >9. Services 90% © 2008-2012 by BeyondProxy LLC.25 111.) This FY n/a 14x n/a 14x 8x 12x 14x Next FY n/a 11x n/a 12x 8x 11x 12x Price/ Tang. most notably forcing the resignation of the CEO of Deutsche Boerse after he refused to abandon a proposed takeover of the London Stock Exchange. / NWSA Viacom / VIA Walt Disney / DIS WellPoint / WLP Oracle / ORCL Union Pacific / UNP Top Holdings of Children’s Investment Fund – By Dollar Value Market Value ($mn) 47.322 26.9x n/m >9. <1% 2% <1% <1% <1% <1% <1% Fund* 1% 47% 11% 33% 2% 2% 5% P/E (Est.557 16.77 19.145 Price Recent ($) 19. 30 38% 8% 2% 11% -3% 11% 5% Shares Owned Recent (‘000) 1.330 74. certain non-U.25 41.641 673 1.3x >9.17 8.9x >9.manualofideas.797 673 1.979 29.9x >9. 30 -4% -12% -25% -74% -39% -48% 0% Holdings as % of Co.3x 1 2 3 4 5 6 7 Company / Ticker News Corp.283 926 1.797 4.211 53. ultimately pushing it into the hands of RBS.9x . Excludes portfolio cash. Hohn has acquired a reputation as an aggressive shareholder activist.45 64.9x >9.9x 1 2 3 4 5 6 7 Company / Ticker Royal Bank Scotland / RBS News Corp.301 51. Book . Hohn also agitated for a sale of ABN Amro.63 28. MOI Signal Rank™ – Top Current Ideas of Children’s Investment Fund Market Value ($mn) 26.145 47.9x 2.45 54.1 billion 100% $39 billion $51 billion 14x 12x 2.283 16.641 926 ∆ from Sep.63 ∆ from Dec.322 143. leverage.50 64.590 143. and non-equity securities.301 ∆ from Sep.

<1% <1% <1% <1% 10% 3% 1% <1% <1% 3% Fund* 8% 8% 17% 11% 4% 1% 2% 3% 7% 0% P/E (Est.96 37.) This FY 11x 8x 10x 12x 17x 9x n/m 10x n/m 8x Next FY 7x 7x 6x 10x 15x 8x n/m 9x n/m 6x Price/ Tang.com / OSTK Primus Telecom / PTGI RadioShack / RSH Sanofi-Aventis / SNY Wells Fargo / WFC Qiao Xing Mobile / QXM Top Holdings of Chou Associates – By Dollar Value Market Value ($mn) 81.980 30.com / OSTK Sanofi-Aventis / SNY New Positions Primus Telecom / PTGI Sold Out Positions CryptoLogic / CRYP Gannett / GCI MannKind / MNKD Portfolio Metrics Portfolio size * Sector Weightings $437 million 78% $7. ** Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Other 10% Financial 53% Based on equity holdings disclosed in 13F-HR filings with the SEC.545 7. holdings.279 2. Book n/m 2.3x Services 24% Health Care 13% *. 30 -4% 3% 45% 13% -11% 5% -22% 2% 10% 28% Shares Owned Recent (‘000) 635 0 8.338 159. and non-equity securities.9x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Bank of America / BAC JPMorgan Chase / JPM AbitibiBowater / ABH Watson Pharma / WPI Berkshire Hathaway / BRK. Book .99 117. Gardiner Watson.manualofideas. MOI Signal Rank™ – Top Current Ideas of Chou Associates Market Value ($mn) 7.903 159.1 billion $38 billion 10x 8x 1.584 ∆ from Sep.99 117.23 ∆ from Dec.279 2. The roots of Chou Associates date back to 1986.338 Price Recent ($) 8.0x .5x n/m 2.61 15.60 37. leverage.2x .12 6.2x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Watson Pharma / WPI Berkshire Hathaway / BRK. Excludes portfolio cash.com March 2012 – Page 27 of 169 .26 1.28 57.6x 1.25 ∆ from Dec. 30 40% 0% -1% 0% 0% 0% 21% 0% 0% 0% Holdings as % of Co. ** A large portion of assets managed by Francis Chou may be invested in Canadian and other securities.310 410 ∆ from Sep.6x . 30 45% 13% 5% -4% 3% 10% 50% 26% -11% 2% Shares Owned Recent (‘000) 8. SUBSCRIBE TODAY! www.310 451 1.24 7.A Bank of America / BAC JPMorgan Chase / JPM Overstock.797 142. 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.294 410 998 1. which are not shown in the chart or tables.903 81.07 37.909 1.26 47. 30 0% 0% 40% 0% 0% new 29% 0% 0% >100% Holdings as % of Co.S.57 114.0x 1.374 194.8x .2x >9. Today.61 6. Over the years.) This FY 12x 17x 11x 8x n/m n/a 8x 8x 9x n/a Next FY 10x 15x 7x 7x n/m n/a 10x 6x 8x n/a Price/ Tang. All rights reserved.23 30.07 37. © 2008-2012 by BeyondProxy LLC.374 194.0x n/m 1.659 635 0 998 584 165 2. certain non-U.797 142.9x >9.96 13.6x 1. and Fairfax Financial.980 8.183 162 100.577 71 Price Recent ($) 57.Value-oriented Equity Investment Ideas for Sophisticated Investors Chou Associates (Francis Chou) Francis Chou arrived in Canada from India in 1976.577 5.8x 1.9x n/m 1.909 162 181 759 100. he worked for Bell Canada.950 1. <1% <1% 3% <1% <1% <1% <1% <1% 10% <1% Fund* 17% 11% 9% 8% 8% 7% 6% 4% 4% 3% P/E (Est.084 56.950 1.A Wells Fargo / WFC Sears Holdings / SHLD Goldman Sachs / GS Overstock.

0x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Coca-Cola / KO Aon / AON Ecolab / ECL Wal-Mart / WMT Microsoft / MSFT Praxair / PX UnitedHealth / UNH 3M / MMM W.Value-oriented Equity Investment Ideas for Sophisticated Investors Eagle Capital (Boykin Curry) Ravenel Boykin Curry IV manages New York-based Eagle Capital Management. All rights reserved. Book 6. Excludes portfolio cash. SUBSCRIBE TODAY! www.621 Price Recent ($) 67. 30 4% 6% 9% 4% 4% 3% 5% 7% 4% >100% Holdings as % of Co.308 15. MOI Signal Rank™ – Top Current Ideas of Eagle Capital Management Market Value ($mn) 154.32 87.5x n/m >9.122 55.989 255.50 61.308 18.877 32.9x 2.5x Consumer NonCyclical 20% Other 33% * Financial 24% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 23% Based on equity holdings disclosed in 13F-HR filings with the SEC.9x >9.21 306.0x 8.197 8. <1% 3% 3% <1% <1% 1% <1% <1% 8% <1% Fund* 5% 5% 5% 6% 6% 4% 4% 4% 4% 0% P/E (Est.90 48.589 20.9x 2.035 11.197 8.979 Price Recent ($) 30.com March 2012 – Page 28 of 169 .384 73.980 2.) This FY 17x 14x 24x 14x 11x 18x 11x 14x 14x 33x Next FY 15x 12x 20x 13x 10x 16x 10x 13x 13x 27x Price/ Tang. leverage.881 21.18 107. which started as a family investment partnership and has grown to more than $5 billion in assets invested in equities.258 8.9x 1.9x 4.122 55.018 4. Book >9.718 61.095 ∆ from Sep.S.90 30. / APEI CNA Financial / CNA Exxon Mobil / XOM Intel / INTC Molex / MOLX Nalco Holding / NLC Portfolio Metrics Portfolio size * Sector Weightings $10 billion 49% $26 billion $67 billion 14x 13x 2.384 211.362 32.596 9.18 ∆ from Dec.manualofideas.32 87.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Microsoft / MSFT Wal-Mart / WMT Aon / AON Coca-Cola / KO Ecolab / ECL Comcast / CMCSA Praxair / PX UnitedHealth / UNH 3M / MMM News Corp.16 53.9x n/m >9. <1% <1% 3% <1% 3% <1% 1% <1% <1% <1% Fund* 6% 6% 5% 5% 5% 5% 4% 4% 4% 4% P/E (Est.0x 8.14 36.56 61.9x >9.966 9.50 107.018 4.56 67.14 19.1x 4. © 2008-2012 by BeyondProxy LLC. 30 4% 4% 6% 4% 9% -19% 3% 5% 7% -11% Holdings as % of Co.1x >9.733 7 ∆ from Sep. Curry has a long term-oriented investment approach and looks for out-of-favor companies that trade at a significant discount to intrinsic value.877 211.3x 1.035 7.20 27. certain non-U. holdings.596 4.989 15. / NWSA New Positions Charles Schwab / SCHW Oracle / ORCL Sold Out Positions American Public Ed.072 47. 30 -3% 4% 6% 4% 17% 0% 5% 7% 5% 7% Shares Owned Recent (‘000) 8.9x n/m >9.16 53.699 154.) This FY 11x 14x 14x 17x 24x 18x 18x 11x 14x 14x Next FY 10x 13x 12x 15x 20x 15x 16x 10x 13x 11x Price/ Tang.699 18.5x 6. 30 17% 4% 4% -3% 6% 15% 0% 5% 7% 8% Shares Owned Recent (‘000) 20.718 61.589 11.00 ∆ from Dec.94 48.94 61.258 7.933 4.R. Berkley / WRB Alleghany / Y Top Holdings of Eagle Capital Management – By Dollar Value Market Value ($mn) 255.20 61.072 4.881 10.966 17. and non-equity securities.

) This FY >99x 10x 15x 14x 8x 16x 13x 13x 14x 51x Next FY 89x 14x 13x 13x 7x 12x 12x 9x 9x 82x Price/ Tang. 30 0% 3% -23% 0% 0% 0% 1% 0% 0% new Holdings as % of Co.6x 6.0x 2.73 54.04 16.331 4.16 48. 30 0% 0% 0% 3% new 1% 0% 0% 0% 0% Holdings as % of Co.4x 2.591 2. © 2008-2012 by BeyondProxy LLC.888 7.5 billion $3.07 48.063 4.04 14.053 4.02 30.15 ∆ from Dec.6x 2. leverage.04 13.4x 9.331 2. / PKG Calpine / CPN Innophos / IPHS Globe Specialty / GSM Rock-Tenn / RKT Spansion / CODE Delphi Automotive / DLPH New Positions Delphi Automotive / DLPH Sold Out Positions AbitibiBowater / ABH Capital One / COF Portfolio Metrics Portfolio size * Sector Weightings $67 million 92% $1. 30 -2% 3% 15% 37% 39% 6% 0% 18% 58% 9% Shares Owned Recent (‘000) 367 373 223 194 58 375 117 48 164 64 ∆ from Sep.S. and non-equity securities.4x 6.803 779 177 Price Recent ($) 16.07 8.04 13.053 1.2x 4. Book n/m n/m n/m 3.04 ∆ from Dec. Excludes portfolio cash.02 47. All rights reserved.840 1.2x 1.063 1.803 779 9. MOI Signal Rank™ – Top Current Ideas of Eagle Value Market Value ($mn) 7.04 54. SUBSCRIBE TODAY! www.com March 2012 – Page 29 of 169 . Book 1.69 14.2x 4.861 Price Recent ($) 28.69 68.2x n/m 9.16 68. certain non-U.861 1.73 29.8x n/m 3.4x 3.840 1.155 9.155 2.0x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Macquarie Infrastr.2x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Calpine / CPN Macquarie Infrastr. / MIC Packaging Corp. holdings. / PKG Rockwood Holdings / ROC Delphi Automotive / DLPH Globe Specialty / GSM Innophos / IPHS Rock-Tenn / RKT Spansion / CODE Black Diamond / BDE Top Holdings of Eagle Value – By Dollar Value Market Value ($mn) 1.8x 3. / MIC Rockwood Holdings / ROC Six Flags / SIX Packaging Corp.8 billion 14x 12x 3.) This FY 10x 14x 84x 15x >99x 13x 16x 13x 14x 8x Next FY 14x 13x 64x 13x 89x 12x 12x 9x 9x 7x Price/ Tang.07 30.888 4. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 9% 16% 10% 16% 3% 8% 8% 5% 3% 1% P/E (Est.2x Services 20% Transportation 17% * Other 10% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Basic Materials 53% Based on equity holdings disclosed in 13F-HR filings with the SEC.08 29.07 28. She is a value-oriented equity investor and runs a concentrated portfolio. 30 3% 37% 14% 15% -2% 0% 6% 18% 58% 39% Shares Owned Recent (‘000) 373 194 221 223 367 117 375 48 164 58 ∆ from Sep. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 16% 16% 15% 10% 9% 8% 8% 5% 3% 3% P/E (Est.Value-oriented Equity Investment Ideas for Sophisticated Investors 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.manualofideas.

50 26.95 60.71 30.919 186.71 29.577 5.421 11.421 9.901 81.57 30. MOI Signal Rank™ – Top Current Ideas of Edinburgh Partners Market Value ($mn) 16.5x >9.989 Price Recent ($) 12. 30 10% 19% 19% 17% 14% 10% 21% 14% 45% 6% Shares Owned Recent (‘000) 17.33 26.R.1x 4.035 Price Recent ($) 19.111 16. and non-equity securities.498 1. certain non-U.111 19 ∆ from Sep.035 106.7x 4.5x 2.90 29.761 25.9x Energy 14% * Other 14% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 45% Based on equity holdings disclosed in 13F-HR filings with the SEC.com March 2012 – Page 30 of 169 .176 5.498 3.manualofideas.7x >9.07 70.5x 5.5x 4.626 3.3x n/m 3. 30 4% -16% -12% -12% -13% -3% -5% -9% -40% new Holdings as % of Co. 1% <1% <1% 2% 6% 1% <1% <1% <1% <1% Fund* 9% 4% 14% 8% 12% 12% 14% 12% 9% 0% P/E (Est.393 ∆ from Sep.541 26.6x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Cisco Systems / CSCO Petroleo Brasileiro / PBR Illinois Tool Works / ITW Microsoft / MSFT D.90 ∆ from Dec.931 16.50 14.4 billion 99% $26 billion $77 billion 11x 10x 2.5x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Applied Materials / AMAT General Dynamics / GD Cisco Systems / CSCO Zimmer Holdings / ZMH D.249 14.95 70.9x 6.84 8.) This FY 11x 9x 13x 11x 29x 11x 17x 12x 11x 10x Next FY 10x 8x 12x 10x 18x 10x 11x 11x 7x 9x Price/ Tang. SUBSCRIBE TODAY! www.2x .249 19. 30 21% 6% 10% 14% 14% 19% 19% 17% 10% 4% Shares Owned Recent (‘000) 16.3x 5.176 9. Horton / DHI Illinois Tool Works / ITW Petroleo Brasileiro / PBR Microsoft / MSFT Intel / INTC Wal-Mart / WMT Top Holdings of Edinburgh Partners – By Dollar Value Market Value ($mn) 106.9x 1.877 135. Book 2.90 60.R.Value-oriented Equity Investment Ideas for Sophisticated Investors Edinburgh Partners (Sandy Nairn) Sandy Nairn follows a value-oriented investment style.393 17. All rights reserved.2x 1.5x 6.57 55.84 14.901 4. He developed his approach during a ten-year “apprenticeship” under famed investor Sir John Templeton.029 26.70 61.) This FY 17x 10x 11x 12x 29x 13x 9x 11x 11x 14x Next FY 11x 9x 10x 11x 18x 12x 8x 10x 10x 13x Price/ Tang.30 ∆ from Dec.931 211.877 4.853 8.953 10. Book 3.953 186.469 1. 30 -12% -5% -3% -9% -13% -40% 4% -12% -10% -16% Holdings as % of Co.30 19.797 25.S.919 255.577 8.029 255.5x 1.1x 1.70 12. Capital Goods 28% © 2008-2012 by BeyondProxy LLC. Horton / DHI Intel / INTC Applied Materials / AMAT Zimmer Holdings / ZMH Bank of America / BAC General Dynamics / GD New Positions Virgin Media / VMED Wal-Mart / WMT Sold Out Positions SK Telecom / SKM Portfolio Metrics Portfolio size * Sector Weightings $2. holdings.761 10.626 11.541 135. leverage. <1% <1% 1% <1% 6% <1% 1% 2% <1% <1% Fund* 14% 14% 12% 12% 12% 9% 9% 8% 5% 4% P/E (Est.853 19.33 55. Excludes portfolio cash.

Sears Holdings (SHLD). is a value investor who started out working under Bob Rubin at the arbitrage desk of Goldman Sachs.4x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Sears Holdings / SHLD AutoNation / AN AutoZone / AZO Gap / GPS Capital One / COF CIT Group / CIT Seagate Technology / STX Genworth Financial / GNW Big Lots / BIG iStar Financial / SFI New Positions None Sold Out Positions Cisco Systems / CSCO Wells Fargo / WFC * Portfolio Metrics Portfolio size Sector Weightings $6. Lampert engineered the merger of Kmart and Sears in 2004. which holds a concentrated investment portfolio. His largest investment was the much-publicized taking control of Kmart during Kmart’s bankruptcy process in 2002.00 6.543 22. he received the support of Texas investor Richard Rainwater. and non-equity securities. He also still manages his investment partnership.0x .10 21.193 2.9x 4.172 5.695 ∆ from Sep.288 13. Excludes portfolio cash. certain non-U.com March 2012 – Page 31 of 169 . When he left Goldman to start ESL in 1988.65 26.135 6.2x 1.543 8.9x .74 354.5x 1.4x 1.4x 7.969 48. 30 0% -12% -67% -14% -14% -11% -28% -13% -12% 41% Holdings as % of Co.031 ∆ from Sep. leverage. holdings.135 9.28 41.59 41.653 2.172 5.Value-oriented Equity Investment Ideas for Sophisticated Investors ESL Investments (Eddie Lampert) Eddie Lampert.937 10. Book .288 2. Book 1.57 36.084 Price Recent ($) 6.9x .5x n/m 4.00 21.) This FY n/m 16x 15x 14x 8x 30x 4x 7x 15x n/m Next FY n/m 15x 13x 12x 7x 18x 3x 5x 13x n/m Price/ Tang.357 4.767 22. He is currently chairman and chief capital allocator of the combined firm.357 11.65 8.653 31.6x 1 2 3 4 5 6 7 8 9 Company / Ticker iStar Financial / SFI AutoNation / AN Capital One / COF Big Lots / BIG Gap / GPS CIT Group / CIT Genworth Financial / GNW AutoZone / AZO Sears Holdings / SHLD Top Holdings of ESL Investments – By Dollar Value Market Value ($mn) 5.3x 3. 45% 41% 8% 6% 1% 3% 2% 2% 3% 3% Fund* 34% 29% 15% 10% 4% 3% 3% 1% 1% 0% P/E (Est.410 2.754 4.2x 1. © 2008-2012 by BeyondProxy LLC. 30 41% -12% -14% -12% -14% -11% -13% -67% 0% Holdings as % of Co.6x 7.57 ∆ from Dec. SUBSCRIBE TODAY! www.094 1.59 48.410 5. 3% 41% 1% 3% 6% 3% 2% 8% 45% Fund* 0% 29% 4% 1% 10% 3% 1% 15% 34% P/E (Est.084 4.193 8.887 10.4x 3.96 ∆ from Dec.412 2.4 billion $29 billion 12x 11x 1.969 31.937 5.) This FY n/m 16x 8x 15x 14x 30x 7x 15x n/m Next FY n/m 15x 7x 13x 12x 18x 5x 13x n/m Price/ Tang.28 44.3x n/m 1.412 1.887 659 Price Recent ($) 47.74 44.8 billion 100% $9.977 9. 30 50% -2% 9% 16% 14% 19% 60% 33% 17% 32% Shares Owned Recent (‘000) 48.695 54. All rights reserved.11 48. 30 32% -2% 14% 17% 16% 19% 33% 9% 50% Shares Owned Recent (‘000) 2.S. founder and managing member of ESL Investments.031 54.767 13.10 47. Lampert compounded ESL’s capital at rates of more than 25% per annum for many years. MOI Signal Rank™ – Top Current Ideas of ESL Investments Market Value ($mn) 659 4.96 36.0x 4.manualofideas.094 5.8x * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 3% Financial 8% Services 89% Based on equity holdings disclosed in 13F-HR filings with the SEC.11 354.20 8.

512 4.5x 6. Some have called him “Warren Buffett of Canada.8x 9. leverage.577 Price Recent ($) 26.8x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Intel / INTC Johnson & Johnson / JNJ Overstock.888 159. Bancorp / USB Wells Fargo / WFC Top Holdings of Fairfax – By Dollar Value Market Value ($mn) 176.1x >9.S.2 billion $38 billion 12x 12x 1.413 135.01 13.Value-oriented Equity Investment Ideas for Sophisticated Investors Fairfax (Prem Watsa) Prem Watsa is the founder.798 17.947 3.5x n/m n/m 1. Watsa has built a reputation as an astute value investor.75 30.087 1.504 12.500 12.04 ∆ from Dec.60 6.2 billion 93% $4.com March 2012 – Page 32 of 169 .020 338 55.” MOI Signal Rank™ – Top Current Ideas of Fairfax Market Value ($mn) 135.5x 1. Excludes portfolio cash.44 17.931 176. Book 6.087 31.931 17. Bancorp / USB USG / USG Frontier Comms / FTR New Positions Intel / INTC * Sold Out Positions None *.8x Health Care 18% Other 33% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 31% Based on equity holdings disclosed in 13F-HR filings with the SEC.1x .01 30.545 4.9x 1. While managing Fairfax’s investment portfolio over the past couple of decades.504 12.8x 2.363 1.com / OSTK Research In Motion / RIMM AbitibiBowater / ABH Level 3 Comms / LVLT Frontier Comms / FTR Baldwin & Lyons / BWINB U.) This FY 13x 11x n/m 10x n/a 8x 9x 11x n/m 17x Next FY 12x 10x n/m 6x n/a 9x 8x 10x n/m 16x Price/ Tang.70 21. Services 19% ** 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.947 11.448 4.512 ∆ from Sep.5x 4.620 ∆ from Sep.04 22.931 4.363 159.26 29.389 12. 30 new 15% 0% 8% 0% 0% 0% 0% 0% 0% Holdings as % of Co.620 970 4.798 9. certain non-U.473 4. © 2008-2012 by BeyondProxy LLC.8x 1.4x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Johnson & Johnson / JNJ Intel / INTC Level 3 Comms / LVLT AbitibiBowater / ABH Research In Motion / RIMM Dell / DELL Wells Fargo / WFC U.S.545 8.) This FY 11x 13x n/m n/a 10x n/m 17x 15x 11x 9x Next FY 10x 12x n/m n/a 6x n/m 16x 18x 10x 8x Price/ Tang.1x 2. <1% <1% 15% 2% 17% 6% 2% 7% <1% <1% Fund* 14% 18% 1% 9% 12% 13% 3% 1% 6% 6% P/E (Est.152 4.44 15. holdings. 30 -1% 10% 24% 5% 6% 21% 10% 7% 38% -22% Shares Owned Recent (‘000) 5.manualofideas.96 15.9x 1. Book 4.60 26. ** Portfolio Metrics Portfolio size Sector Weightings $2. chairman and CEO of Fairfax (Toronto: FFH).70 64.5x n/m .413 162 8. All rights reserved. 30 15% new 0% 0% 8% -60% 0% 0% 0% 0% Holdings as % of Co.392 1.15 15. a Canadian property/casualty insurance and reinsurance firm. 30 10% -1% -11% 6% 5% 24% -22% 4% 7% 10% Shares Owned Recent (‘000) 11.26 ∆ from Dec.794 18.392 4.020 Price Recent ($) 64. SUBSCRIBE TODAY! www. and non-equity securities.5x >9.28 21.448 6.15 4.577 55. <1% <1% 6% 17% 2% <1% <1% <1% 6% 2% Fund* 18% 14% 13% 12% 9% 7% 6% 6% 4% 3% P/E (Est.28 15.99 4.72 29.931 18.500 5.S.

MOI Signal Rank™ – Top Current Ideas of Fairholme Market Value ($mn) 81. 30 1% 87% -4% -1% -7% -35% -4% -1% 0% Holdings as % of Co.574 6 18. © 2008-2012 by BeyondProxy LLC.137 3.6x 1. All rights reserved.0x 1. Joe / JOE Citigroup / C Wells Fargo / WFC New Positions Goldman Sachs / GS JPMorgan Chase / JPM Sold Out Positions AT&T / T Banco Santander / STD Brookfield Asset / BAM Royal Dutch Shell / RDS. highly volatile equity portfolios. 30 -7% 1% -4% -1% -35% -4% -1% -1% -92% 87% Holdings as % of Co.577 Price Recent ($) 26.6x 1.531 26.489 50.0x 1.489 96.185 116.357 5. 1% <1% 24% 28% 6% <1% 9% 7% <1% Fund* 12% 0% 7% 5% 39% 9% 10% 7% 0% P/E (Est. and non-equity securities.7x 1 2 3 4 5 6 7 8 9 Company / Ticker Bank of America / BAC Wells Fargo / WFC MBIA / MBI St. Fairholme runs concentrated.903 2. 30 15% 45% 19% 50% 3% 3% 28% 10% 25% 10% Shares Owned Recent (‘000) 116.357 7. certain non-U.263 159. 6% 1% 9% 15% <1% 24% 7% 28% <1% <1% Fund* 39% 12% 10% 10% 9% 7% 7% 5% 1% 0% P/E (Est.797 8.531 18.14 26.7x .574 112.110 850 ∆ from Sep.0x 1. manager of The Fairholme Fund.A MBIA / MBI Leucadia National / LUK St. leverage.0x 1. Book .2x 1.753 18.07 41.9 billion 99% $56 billion $72 billion 10x 9x 1.084 194.7x 1.66 8.303 7.980 41.279 52 ∆ from Sep.617 16.0x 1.14 32.980 11. Joe / JOE AIG / AIG Berkshire Hathaway / BRK.2x Services 15% * Conglomerates 7% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 78% Based on equity holdings disclosed in 13F-HR filings with the SEC.A CIT Group / CIT Leucadia National / LUK Assured Guaranty / AGO Top Holdings of Fairholme – By Dollar Value Market Value ($mn) 50.Value-oriented Equity Investment Ideas for Sophisticated Investors Fairholme (Bruce Berkowitz) Bruce Berkowitz. 30 45% 10% 3% 10% 15% 3% 19% 28% 33% Shares Owned Recent (‘000) 112. Excludes portfolio cash.185 2.26 ∆ from Dec. SUBSCRIBE TODAY! www.577 2. holdings.189 Price Recent ($) 8.7x .92 29.797 159.66 117.A Telefonica / TEF Verizon / VZ Vodafone / VOD Winthrop Realty / FUR Regions Financial / RF Portfolio Metrics Portfolio size * Sector Weightings $7.108 6 46.) This FY 35x 11x 30x n/m 17x n/m n/a n/m 8x 9x Next FY 11x 7x 18x n/m 15x 13x n/a n/m 7x 8x Price/ Tang. was one of the most successful value-oriented investors of the decade from 2000-2010.6x 2.92 16.18 16. Berkowitz is a contrarian who favors companies with strong free cash flow generation as well as companies that are deeply undervalued based on assets.S. Book .manualofideas.18 17.50 ∆ from Dec.279 26.07 30.633 194.0x 1.903 8.57 117.65 29.617 18.93 30.8x 1.2x .303 1.) This FY 11x 9x n/m n/m 35x 17x 30x n/a 6x Next FY 7x 8x 13x n/m 11x 15x 18x n/a 6x Price/ Tang.8x 1 2 3 4 5 6 7 8 9 10 Company / Ticker AIG / AIG Bank of America / BAC CIT Group / CIT Sears Holdings / SHLD Berkshire Hathaway / BRK.6x .137 1.26 11.753 850 46.6x 2.633 81.65 47.com March 2012 – Page 33 of 169 .

0x 2. leverage.025 6.57 12. / CSX Gaylord Entertain.07 47. Pacific Railway / CP CSX Corp. Realty / FR iStar Financial / SFI Copart / CPRT Charter Comms / CHTR Bank of America / BAC Alexander & Baldwin / ALEX Eagle Materials / EXP SL Green Realty / SLG CSX Corp. 30 50% 15% 32% -3% 3% 45% 15% 26% 12% 5% Shares Owned Recent (‘000) 1. SUBSCRIBE TODAY! www.S.6x 1.932 12.8x .83 22.96 47.0x 2.966 10.0x 1.96 46. holdings. Pacific Railway / CP Ashford Hospitality / AHT Top Holdings of Force Capital Management – By Dollar Value Market Value ($mn) 5.6x 1 2 3 4 5 6 7 8 9 10 Company / Ticker CSX Corp.591 1.152 Price Recent ($) 47.8x Transportation 14% Financial 8% * Other 10% Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 68% Based on equity holdings disclosed in 13F-HR filings with the SEC.790 1. Hunt / JBHT Liz Claiborne / LIZ Lowe’s / LOW News Corp.7x 1. / CSX New Positions C.com March 2012 – Page 34 of 169 .742 628 Price Recent ($) 22.966 1. Book 1.324 33.14 32.7x 4.308 3.14 14. / GET General Growth / GGP Hartford Financial / HIG J.manualofideas.308 164 188 379 377 461 156 304 ∆ from Sep.40 74. 30 new 49% 74% >100% new 25% new new new >100% Holdings as % of Co.591 514 388 2.59 8.05 ∆ from Dec. Excludes portfolio cash.C.152 659 5. Book 2. and non-equity securities.B.0x .7x 4.8x 3.7x n/m .019 659 3.76 27.) This FY n/m n/m n/m 18x n/m 11x 46x 53x >99x 12x Next FY n/m n/m n/m 16x >99x 7x 25x 26x 95x 10x Price/ Tang.23 ∆ from Dec.3 billion 17x 16x 1.7x .09 74.456 6.84 47. 1% 3% 4% <1% <1% <1% <1% 1% <1% <1% Fund* 16% 9% 7% 6% 6% 5% 5% 5% 4% 4% P/E (Est.05 6. MOI Signal Rank™ – Top Current Ideas of Force Capital Management Market Value ($mn) 23.7x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Sears Holdings / SHLD First Indust. All rights reserved.306 81.267 379 538 215 685 ∆ from Sep.2x 2.6x 1.084 1. certain non-U.76 6.H.47 58.797 1.674 23.) This FY 12x n/m n/m n/m 17x 46x 11x 17x n/a n/a Next FY 10x n/m n/m 21x 15x 25x 10x 15x n/a n/a Price/ Tang. 30 74% -5% 49% -46% -14% -10% 25% 6% -9% new Holdings as % of Co.57 11.084 499 3.0 billion $9. <1% 4% 1% <1% <1% <1% <1% <1% <1% <1% Fund* 4% 7% 16% 1% 2% 5% 1% 3% 3% 1% P/E (Est. 30 5% 32% 50% -9% -4% 15% 6% 7% 10% 15% Shares Owned Recent (‘000) 685 3.4x 1. © 2008-2012 by BeyondProxy LLC. / NWSA SodaStream / SODA Staples / SPLS Walt Disney / DIS Williams-Sonoma / WSM Sold Out Positions Asbury Automotive / ABG AutoNation / AN Barnes & Noble / BKS Equinix / EQIX Huntington Ingalls / HII Iron Mountain / IRM J. Penney / JCP Lamar Advertising / LAMR Shutterfly / SFLY TransDigm / TDG WABCO Holdings / WBC Winthrop Realty / FUR Portfolio Metrics Portfolio size * Sector Weightings $384 million 66% $2. / CSX iStar Financial / SFI Sears Holdings / SHLD State Auto Financial / STFC Williams-Sonoma / WSM Alexander & Baldwin / ALEX Staples / SPLS Lowe’s / LOW Can.38 36.6x . Robinson / CHRW Can.63 9.023 3.4x 8.Value-oriented Equity Investment Ideas for Sophisticated Investors Force Capital (Robert Jaffe) Robert Jaffe founded Force Capital Management in 2002 after eight years at Steve Cohen’s SAC Capital.

39 27.880 935 3.77 15.096 Price Recent ($) 30. holdings.S.97 54.118 882 1.3x >9.07 60.419 4.582 2.0 billion 14x 13x 1. 30 62% 19% 11% 12% 18% 19% 15% 15% 20% 14% Shares Owned Recent (‘000) 4.) This FY n/a 11x 32x 12x 10x 14x 33x 14x 19x 14x Next FY n/a 9x 20x 11x 11x 4x 26x 14x 14x 13x Price/ Tang.07 64.9 billion $3.84 15. 4% 2% <1% 1% 9% 3% 7% 12% 2% <1% Fund* 13% 8% 7% 6% 6% 6% 6% 6% 6% 5% P/E (Est.851 5.2x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Solutia / SOA W. and non-equity securities.348 1. / ITT Nortek / NTK Xylem / XYL Sold Out Positions C.996 209 2.261 3.9x n/m n/m 6.98 60. leverage.582 3. All rights reserved.83 83.378 1. 30 15% 12% 18% 14% 19% -24% 1% 5% -2% 17% Shares Owned Recent (‘000) 1.88 16.W.71 12. Book n/m >9.10 17.2x >9.261 748 3.77 30. Grace / GRA DaVita / DVA Ashland / ASH Quanex Building / NX Darling / DAR Blount International / BLT Nortek / NTK Snap-on / SNA Zimmer Holdings / ZMH New Positions E. / RELL Xylem / XYL Vishay Precision / VPG ITT Corp.60 ∆ from Dec.) This FY 13x 13x 17x 11x 32x 10x 13x n/a 13x 12x Next FY 11x 12x 14x 9x 20x 11x 11x n/a 11x 11x Price/ Tang.048 7.Value-oriented Equity Investment Ideas for Sophisticated Investors Gates Capital (Jeff Gates) Jeff Gates has 25+ years of experience identifying undervalued securities.548 10.9x .R.07 15. 30 -13% -23% -27% 6% 2% >100% -1% new -18% 89% Holdings as % of Co. 12% 1% 9% <1% 3% 6% 7% <1% 9% <1% Fund* 6% 6% 6% 5% 6% 0% 1% 3% 2% 2% P/E (Est.10 17.manualofideas.6x 1.9x n/m n/m 2. Excludes portfolio cash.77 60. He started the ECF Value Fund in 1996 after spending 10+ years in high yield bond research and sales.0x n/m 1. Book n/m n/m 2.859 28 210 4. 30 new 6% 2% 89% >100% 8% 50% new 0% new Holdings as % of Co.019 653 10. including as a director at Schroder & Co.242 1. Scripps / SSP ITT Corp.88 0.84 ∆ from Dec.com March 2012 – Page 35 of 169 . Capital Goods 27% © 2008-2012 by BeyondProxy LLC.859 818 453 3.2x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Nortek / NTK Ashland / ASH Quanex Building / NX Zimmer Holdings / ZMH Darling / DAR GeoMet / GMET Richardson Electron.97 64. certain non-U. / ITT Top Holdings of Gates Capital – By Dollar Value Market Value ($mn) 3.R. Bard / BCR Portfolio Metrics Portfolio size * Sector Weightings $924 million 70% $1. MOI Signal Rank™ – Top Current Ideas of Gates Capital Market Value ($mn) 453 5.212 898 ∆ from Sep.3x 5. SUBSCRIBE TODAY! www.267 761 935 3.880 890 748 ∆ from Sep.901 1.901 Price Recent ($) 27.63 22.5x 5.9x Services 13% * Other 28% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Basic Materials 33% Based on equity holdings disclosed in 13F-HR filings with the SEC.019 653 1.

) This FY 12x 13x 62x 8x 12x 8x 8x 14x 12x 13x Next FY 11x 11x 43x 7x 11x 7x 7x 12x 11x 11x Price/ Tang.860 10.781 4. and non-equity securities.93 55.770 2.018 14.34 49. <1% 3% 1% 6% <1% 2% 3% 1% <1% 2% Fund* 5% 6% 4% 1% 1% 4% 0% 2% 0% 3% P/E (Est.97 27.475 5.10 90.9 billion 52% $12 billion $22 billion 12x 11x 2.93 49.manualofideas. 30 -3% -22% 12% >100% 8% -11% 12% -24% -4% -8% Holdings as % of Co.com March 2012 – Page 36 of 169 .9x n/m .83 2. Book .934 8.049 25. MOI Signal Rank™ – Top Current Ideas of Glenview Capital Market Value ($mn) 96.082 11.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Citigroup / C Crown Castle / CCI Thermo Fisher / TMO Take-Two / TTWO Quest Diagnostics / DGX HCA / HCA Openwave Systems / OPWV Lab Corp.986 Price Recent ($) 32.568 1.649 36.149 22.830 20.029 21. Excludes portfolio cash.002 4.9x >9.03 2.55 81.382 ∆ from Sep.922 6.232 8.263 14.9x n/m n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Life Technologies / LIFE McKesson / MCK Crown Castle / CCI Citigroup / C Thermo Fisher / TMO Flextronics / FLEX HCA / HCA Tyco International / TYC BMC Software / BMC Fidelity National / FIS New Positions Oracle / ORCL Quest Diagnostics / DGX Sold Out Positions Agilent Technologies / A Coca-Cola Enterprise / CCE Comcast / CMCSA Corning / GLW DaVita / DVA Goldman Sachs / GS Morgan Stanley / MS Pfizer / PFE Pharma Product / PPDI Wyndham / WYN Portfolio Metrics Portfolio size * Sector Weightings $5.785 12. All rights reserved.561 4. certain non-U.561 7.232 4.31 55.7x n/m 2.25 28.002 1.029 96.649 5.415 9.S. Book 1.325 ∆ from Sep.1x n/m n/m 5.31 32. of America / LH Sprint Nextel / S Xerox / XRX Top Holdings of Glenview Capital – By Dollar Value Market Value ($mn) 8.3x Technology 19% Other 29% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Health Care 30% Based on equity holdings disclosed in 13F-HR filings with the SEC.25 39.0x n/m n/m >9.Value-oriented Equity Investment Ideas for Sophisticated Investors Glenview (Larry Robbins) Larry Robbins founded Glenview after working for buyout specialist Leon Cooperman’s Omega Advisors.263 21.29 7. 30 27% 4% 10% 25% 23% 23% 26% 5% 20% 8% Shares Owned Recent (‘000) 13. 30 >100% 12% 8% >100% new 12% >100% 41% 24% 7% Holdings as % of Co. holdings.3x n/m >9.83 49.92 ∆ from Dec.409 7. leverage. 30 25% 10% 23% 17% -1% 26% 33% 5% -2% -1% Shares Owned Recent (‘000) 8.613 7.446 8.580 Price Recent ($) 49.65 ∆ from Dec. Services 22% © 2008-2012 by BeyondProxy LLC.770 4.52 6.) This FY 8x 62x 12x n/m 13x 8x n/m 14x n/m 7x Next FY 7x 43x 11x 6x 11x 7x n/m 13x n/m 6x Price/ Tang.54 27. 8% 2% 3% <1% 1% 5% 2% <1% 3% 2% Fund* 12% 6% 6% 5% 4% 4% 4% 4% 4% 4% P/E (Est.078 12.149 181 8.80 57.046 8.619 1. Robbins’ hedge fund utilizes various value-oriented investment strategies in order to generate absolute returns. SUBSCRIBE TODAY! www.7x n/m n/m 5.52 15.703 6.

72 14. leverage.819 3.69 58.481 Price Recent ($) 29.306 3.com March 2012 – Page 37 of 169 .819 2. including as lead portfolio manager of the firm’s hedge fund area.manualofideas. / KKR * * Penn National Gaming / PENN Popular / BPOP Rowan Companies / RDC Solutia / SOA Tenneco / TEN TRW Automotive / TRW Portfolio Metrics Portfolio size Sector Weightings $116 million 100% $4.1 billion $6.) This FY 16x 13x 11x n/m 7x Next FY 13x 12x 10x >99x 7x Price/ Tang.996 6. Prior to MacKay Shields.9 billion 11x 10x 2. 30 -9% -81% new -17% -85% Holdings as % of Co. certain non-U. 30 10% 12% 29% 3% 9% Shares Owned Recent (‘000) 469 12.306 Price Recent ($) 5. Tananbaum spent more than ten years at MacKay Shields.) This FY 13x 7x 16x 11x n/m Next FY 12x 7x 13x 10x >99x Price/ Tang. Book >9.597 2.530 66 ∆ from Sep.61 29.9x n/m n/m . Peabody.90 8. 30 new -9% -17% -85% -81% Holdings as % of Co.69 58. © 2008-2012 by BeyondProxy LLC.61 ∆ from Dec. Book n/m >9. All rights reserved. and non-equity securities.9x . 30 12% 9% 10% 29% 3% Shares Owned Recent (‘000) 12. 2% <1% <1% <1% <1% Fund* 61% 13% 12% 11% 3% P/E (Est. Tananbaum worked on high yield and M&A transactions in the corporate finance department of Kidder.59 14.90 5.481 19.3x Services 28% Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 11% Health Care 61% Based on equity holdings disclosed in 13F-HR filings with the SEC.530 66 993 ∆ from Sep.S.59 ∆ from Dec.72 8.257 1.257 993 469 1.Value-oriented Equity Investment Ideas for Sophisticated Investors GoldenTree (Steve Tananbaum) Steve Tananbaum founded GoldenTree Asset Management in 2000.597 2. SUBSCRIBE TODAY! www. <1% 2% <1% <1% <1% Fund* 12% 61% 11% 3% 13% P/E (Est. Prior to starting GoldenTree. Excludes portfolio cash.7x n/m Company / Ticker 1 2 3 4 5 Tenet Healthcare / THC Gannett / GCI CBS / CBS American Capital / ACAS Charter Comms / CHTR New Positions CBS / CBS Sold Out Positions Ashland / ASH Booz Allen Hamilton / BAH Cedar Fair / FUN CIT Group / CIT CONSOL Energy / CNX Halliburton / HAL KKR & Co. MOI Signal Rank™ – Top Current Ideas of GoldenTree Asset Management Market Value ($mn) 19.996 6.7x n/m n/m Company / Ticker 1 2 3 4 5 CBS / CBS Tenet Healthcare / THC American Capital / ACAS Charter Comms / CHTR Gannett / GCI Top Holdings of GoldenTree Asset Management – By Dollar Value Market Value ($mn) 2. holdings.

005 20.261 3.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker FedEx / FDX Lowe’s / LOW 3M / MMM Air Products & Chem / APD Devon Energy / DVN UPS / UPS Baker Hughes / BHI Equitable Resources / EQT Agilent Technologies / A Rockwell Collins / COL New Positions Am. © 2008-2012 by BeyondProxy LLC.01 44.961 20.03 ∆ from Dec.3x 2. 30 1% 9% -3% 1% 17% 9% >100% -2% >100% 5% Holdings as % of Co.039 29.924 2.40 64. certain non-U.09 90.932 61.14 90.66 45.616 3.094 ∆ from Sep.9x n/m 4.65 76.) This FY 15x 17x 14x 15x 11x 16x 10x 21x 14x 13x Next FY 13x 15x 13x 13x 10x 14x 8x 16x 13x 12x Price/ Tang.340 74.) This FY 11x 17x 15x 15x 10x 14x 16x 13x n/a 19x Next FY 10x 15x 13x 13x 8x 13x 14x 12x n/a 16x Price/ Tang.728 3.932 19.2x 2.6x >9.69 59.517 3.159 3.924 4. All rights reserved.Value-oriented Equity Investment Ideas for Sophisticated Investors Greenhaven (Ed Wachenheim) Ed Wachenheim manages a $3+ billion value hedge fund with a long term-oriented.3x Other 46% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Transportation 24% Energy 17% Services 14% Based on equity holdings disclosed in 13F-HR filings with the SEC.09 87.2x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Devon Energy / DVN Lowe’s / LOW Air Products & Chem / APD FedEx / FDX Baker Hughes / BHI Agilent Technologies / A UPS / UPS Rockwell Collins / COL RHJ International / RHJIF Home Depot / HD Top Holdings of Greenhaven Associates – By Dollar Value Market Value ($mn) 29.961 33.33 ∆ from Dec.65 27.14 59.774 392 69.03 4.459 4.62 44.manualofideas.877 2. leverage.7x >9.3x 6.0x 8.785 7.6x >9.9x 2.9x >9. 30 17% 9% 1% 1% >100% >100% 9% 5% 4% 34% Holdings as % of Co.1x 6.2 billion 82% $16 billion $30 billion 15x 13x 3.27 27. concentrated investment approach.14 76. 30 4% 7% 6% 14% -2% 26% 5% 7% -13% 8% Shares Owned Recent (‘000) 4.340 8.112 74.879 Price Recent ($) 64.62 49.355 1.S.459 4.785 15.2x 2.0x 2. 1% <1% <1% 2% 1% <1% 1% 2% <1% 2% Fund* 13% 10% 10% 10% 9% 9% 7% 5% 4% 4% P/E (Est. and non-equity securities.039 26.40 95. 1% <1% 2% 1% 1% <1% <1% 2% 2% <1% Fund* 9% 10% 10% 13% 7% 4% 9% 4% 0% 3% P/E (Est.0x 1.69 47.261 2.774 Price Recent ($) 95.112 33. SUBSCRIBE TODAY! www. Independence / AMIC Lennox International / LII Mohawk Industries / MHK Sold Out Positions None Portfolio Metrics Portfolio size * Sector Weightings $3.27 47. Book 2.072 19. 30 14% 7% 7% 6% 4% 5% -2% -11% 26% 7% Shares Owned Recent (‘000) 4. holdings.424 4.424 12.324 15. Excludes portfolio cash.517 3.com March 2012 – Page 38 of 169 .118 3.355 ∆ from Sep.0x 4. Book 1.005 8. MOI Signal Rank™ – Top Current Ideas of Greenhaven Associates Market Value ($mn) 26.728 12.9x 4.118 3.7x 2.

9x 9.861 3. 30 0% 0% 29% 11% new 0% new 0% new new Holdings as % of Co.1x 4. David is author of Fooling Some of the People All of the Time.464 19.43 55.952 980 ∆ from Sep.171 14.05 0.9x 4.0x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Apple / AAPL General Motors / GM Microsoft / MSFT Seagate Technology / STX CareFusion / CFN Ensco / ESV Marvell Technology / MRVL Dell / DELL Delphi Automotive / DLPH NCR / NCR New Positions CA / CA Dell / DELL Delphi Automotive / DLPH DST Systems / DST Liberty Media / LMCA OmniVision / OVTI Research In Motion / RIMM Tessera Technologies / TSRA Xerox / XRX Yahoo! / YHOO Sold Out Positions Becton Dickinson / BDX CVS Caremark / CVS Employers Holdings / EIG Ingram Micro / IM LyondellBasell / LYB Marathon Oil / MRO SemGroup / SEMG Synaptics / SYNA Portfolio Metrics Portfolio size * Sector Weightings $5.365 31.4x Consumer Cyclical 13% * Other 25% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 46% Based on equity holdings disclosed in 13F-HR filings with the SEC.611 ∆ from Sep. Book >9.75 30. Since inception in May 1996.50 493.20 25. net of fees and expenses.009 15.) This FY 12x 7x 11x 4x 14x 18x 13x 8x 8x 9x Next FY 10x 7x 10x 3x 13x 10x 14x 9x 7x 8x Price/ Tang.052 17. holdings. and non-equity securities.861 11. 30 11% 29% 0% 0% -5% 9% 4% new new -3% Holdings as % of Co.50 30.869 9.04 26.100 15.986 10.171 8. 30 -11% -7% 26% 22% 21% 17% 39% 60% -1% 9% Shares Owned Recent (‘000) 10.com March 2012 – Page 39 of 169 . Book 5.754 10.63 25.896 255.589 Price Recent ($) 14.374 14.169 19. 64% 22% 1% <1% <1% <1% 2% 3% 1% <1% Fund* 3% 0% 9% 13% 4% 8% 4% 7% 2% 1% P/E (Est.75 30.42 25.42 17.050 31.0x 4. certain non-U.888 9.3 billion $26 billion 13x 11x 2.877 9.6 billion 64% $6.050 39.9x .716 12.4x n/m 6.20 7.50 30.S. <1% 1% <1% 3% 5% 2% 3% <1% 2% 6% Fund* 13% 9% 8% 7% 5% 5% 5% 4% 4% 4% P/E (Est.195 9.) This FY 18x n/a 7x 12x 8x 11x 8x 4x 7x 33x Next FY 16x n/a 7x 10x 9x 10x 7x 3x 6x 51x Price/ Tang.6x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Einstein Noah / BAGL BioFuel Energy / BIOF General Motors / GM Apple / AAPL Dell / DELL Microsoft / MSFT Delphi Automotive / DLPH Seagate Technology / STX Xerox / XRX Liberty Media / LMCA Top Holdings of Greenlight – By Dollar Value Market Value ($mn) 460. of approximately 20%.733 27.9x >9.754 5.15 ∆ from Dec. Excludes portfolio cash.7x 3.1x 9.5x 1.9x 6.009 1. SUBSCRIBE TODAY! www.9x n/m 5. MOI Signal Rank™ – Top Current Ideas of Greenlight Market Value ($mn) 236 77 39.04 21. All rights reserved. leverage.Value-oriented Equity Investment Ideas for Sophisticated Investors Greenlight (David Einhorn) David Einhorn is the founder of Greenlight Capital.888 255.4x >9.195 14. a value-oriented.9x 2.05 17.896 460.50 26.100 8.332 Price Recent ($) 493. 30 22% 26% 17% 60% 0% 19% 16% 21% 39% 28% Shares Owned Recent (‘000) 1.464 14.14 ∆ from Dec. research-driven investment firm with a market-beating long-term track record.153 5. Services 16% © 2008-2012 by BeyondProxy LLC.877 11.449 16.80 16.449 12.manualofideas. Greenlight has reported a compounded annual return.92 85.3x >9.

leverage.10 1. Services 89% © 2008-2012 by BeyondProxy LLC.048 786 153 536 Price Recent ($) 47.79 47.616 677 ∆ from Sep.591 4. really strong financial analytics.08 54.616 3.8x n/m n/m >9.” MOI Signal Rank™ – Top Current Ideas of H Partners Market Value ($mn) 153 786 536 2. and great trader sense. Grace / GRA Top Holdings of H Partners – By Dollar Value Market Value ($mn) 2. / ZZ Cumulus Media / CMLS New Positions None Sold Out Positions Leap Wireless / LEAP Pulte Homes / PHM Portfolio Metrics Portfolio size * Sector Weightings $743 million 100% $786 million $1.08 54.9x 1.Value-oriented Equity Investment Ideas for Sophisticated Investors H Partners (Rehan Jaffer) Rehan Jaffer honed his investment approach at Dan Loeb’s activist hedge fund Third Point.8x * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Consumer Cyclical 3% Basic Materials 8% Based on equity holdings disclosed in 13F-HR filings with the SEC. 30 0% 0% 2% 0% 0% Holdings as % of Co. certain non-U. All rights reserved.8x n/m n/m Company / Ticker 1 2 3 4 5 Six Flags / SIX W. He joined River Run Partners in 2004 and started H Partners shortly thereafter.591 4. Excludes portfolio cash.com March 2012 – Page 40 of 169 .048 Price Recent ($) 1.R.83 9. Book n/m >9.manualofideas.9x Company / Ticker 1 2 3 4 5 Sealy Corp.79 ∆ from Dec.52 3. Loeb was quoted in the book Hedge Hunters as saying the following about Jaffer: “He is super-hungry. 24% 2% 4% 14% <1% Fund* 84% 8% 4% 3% 0% P/E (Est. Book n/m 1. 14% 4% <1% 24% 2% Fund* 3% 4% 0% 84% 8% P/E (Est. He’s very intelligent.10 3. SUBSCRIBE TODAY! www.7 billion 40x 18x 1. 30 -12% 22% 13% 14% 19% Shares Owned Recent (‘000) 14.R. 30 0% 2% 0% 0% 0% Holdings as % of Co. He’s got a good nose.110 ∆ from Sep.52 9. Grace / GRA Boyd Gaming / BYD Sealy Corp.83 ∆ from Dec. and non-equity securities.) This FY 76x >99x 8x 84x 13x Next FY 19x 34x 7x 64x 12x Price/ Tang.310 1. So he’s got a great combination of having a high IQ. a great nose for value.110 3. 30 14% 19% 22% -12% 13% Shares Owned Recent (‘000) 13.400 677 13. / ZZ Boyd Gaming / BYD Cumulus Media / CMLS Six Flags / SIX W.400 14.310 1.S.) This FY 84x 13x >99x 76x 8x Next FY 64x 12x 34x 19x 7x Price/ Tang. holdings.

032 28.514 4. © 2008-2012 by BeyondProxy LLC. All rights reserved.8 billion 12x 12x 1.7x 1 2 3 4 5 6 7 8 9 10 Company / Ticker N.Value-oriented Equity Investment Ideas for Sophisticated Investors Harbinger (Phil Falcone) Phil Falcone founded Harbinger Capital Partners in 2001 in order to capitalize on distressed investment opportunities. securities.3x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Spectrum Brands / SPB Harbinger Group / HRG Crosstex Energy / XTXI N.26 73.34 28. which are not shown here.066 117.000 7. 19% 54% 15% <1% 84% 2% <1% 2% 2% <1% Fund* 2% 50% 6% 2% 35% 2% 1% 0% 0% 1% P/E (Est. The firm has since expanded into special situation investments and other value-oriented investment strategies.519 680 1.398 475 ∆ from Sep. certain non-U. Energy Partners / NOA Spectrum Brands / SPB Crosstex Energy / XTXI Cliffs Natural / CLF Harbinger Group / HRG EXCO Resources / XCO Calpine / CPN Presidential Life / PLFE General Moly / GMO Owens Corning / OC Top Holdings of Harbinger Capital – By Dollar Value Market Value ($mn) 1.manualofideas.0x 1.514 7. non-equity or non-U.91 4. Excludes portfolio cash.85 ∆ from Dec. SUBSCRIBE TODAY! www.840 337 331 4. MOI Signal Rank™ – Top Current Ideas of Harbinger Capital Market Value ($mn) 193 1.88 7. ** A material portion of assets managed by Phil Falcone may be invested in private.4x 2.26 5.840 337 331 Price Recent ($) 28. 30 6% 22% 5% -17% 18% -33% 18% -2% 14% 18% Shares Owned Recent (‘000) 28.4x n/m 1.398 ∆ from Sep.07 11.5 billion $2.) This FY 12x n/a n/m n/a 6x 11x 16x >99x n/a n/m Next FY 10x n/a n/m n/a 7x 15x 12x 89x n/a n/m Price/ Tang.A. leverage. 30 0% 0% 0% 2% 0% 30% 0% 0% 0% 0% Holdings as % of Co.07 11. / FST Huntsman / HUN * Lone Pine Resources / LPR Research In Motion / RIMM WD-40 Company / WDFC *.com March 2012 – Page 41 of 169 .S.8x .500 475 676 546 1.000 450 117. 30 2% 0% 0% 0% 0% 30% 0% 0% 0% 0% Holdings as % of Co.34 73.64 ∆ from Dec.066 7. Book n/m n/m n/m 1.S.88 13.092 7.7x 1.) This FY n/a 12x n/m 6x n/a 11x >99x n/a n/m 16x Next FY n/a 10x n/m 7x n/a 15x 89x n/a n/m 12x Price/ Tang.38 3.A.497 680 626 193 10. 54% 84% 15% 19% <1% 2% <1% <1% 2% 2% Fund* 50% 35% 6% 2% 2% 2% 1% 1% 0% 0% P/E (Est.425 3. ** Portfolio Metrics Portfolio size Sector Weightings $1.85 16. Book 1.55 4. and non-equity securities.7x Financial 38% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Energy 4% Other 4% Technology 54% Based on equity holdings disclosed in 13F-HR filings with the SEC.497 626 10.500 676 546 1.6 billion 99% $1.092 Price Recent ($) 5.64 33.032 450 3.91 13. holdings.425 7.4x 2.7x n/m n/m 2.4x 1. 30 -17% 6% 5% 18% 22% -33% -2% 14% 18% 18% Shares Owned Recent (‘000) 7.3x 2.38 3.0x 2.05 33. Energy Partners / NOA Cliffs Natural / CLF EXCO Resources / XCO Owens Corning / OC Calpine / CPN Presidential Life / PLFE General Moly / GMO New Positions None Sold Out Positions CVR Energy / CVI Forest Oil Corp.8x .519 1.55 7.05 16.7x 2.

140 3.773 251 2.872 206 203 887 661 ∆ from Sep.970 1. 3% 1% 4% <1% <1% 11% <1% <1% 3% <1% Fund* 20% 7% 11% 3% 10% 3% 5% 4% 9% 14% P/E (Est.9x 2.15 44.3x .07 1. Services 35% © 2008-2012 by BeyondProxy LLC.65 17.9x 1.84 2.3x >9.239 5.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Blyth / BTH Sycamore Networks / SCMR Talbots / TLB Westport Innovations / WPRT Abercrombie & Fitch / ANF Frozen Food Express / FFEX AnnTaylor Stores / ANN Electronic Arts / EA XO Group / XOXO Ingram Micro / IM Top Holdings of Hawkshaw Capital – By Dollar Value Market Value ($mn) 521 2.Value-oriented Equity Investment Ideas for Sophisticated Investors Hawkshaw (Kian Ghazi) Kian Ghazi co-founded long/short investment partnership Hawkshaw in 2002.4x 2.9x >9.) This FY n/a n/m n/m n/a 19x n/a 14x 20x 58x 10x Next FY n/a n/m n/m n/a 13x n/a 12x 15x 32x 8x Price/ Tang. and non-equity securities. 30 12% 6% 18% -8% 5% 11% 28% 14% -5% -15% Shares Owned Recent (‘000) 279 661 2.1x Consumer NonCyclical 20% * Other 6% Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 39% Based on equity holdings disclosed in 13F-HR filings with the SEC.3x .971 Price Recent ($) 63.2 billion 17x 12x 2.77 19.42 8.manualofideas.40 19. Excludes portfolio cash.37 3.874 21 1. 30 12% 11% 18% 33% -8% -7% -5% -15% 5% 6% Shares Owned Recent (‘000) 279 320 2.182 288 206 203 ∆ from Sep.9x .65 17.40 19. MOI Signal Rank™ – Top Current Ideas of Hawkshaw Capital Market Value ($mn) 521 570 222 2. He relies on in-depth primary research to form investment theses on individual companies.S.977 200 887 320 2.15 45.) This FY n/a 10x n/m 19x 58x n/m >99x 11x 14x 20x Next FY n/a 8x n/m 13x 32x n/m 12x 10x 12x 15x Price/ Tang.35 17. Ghazi looks for investments in which there is a disconnect between near-term market expectations and longer-term intrinsic value.37 ∆ from Dec. holdings.874 251 570 144 12.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Blyth / BTH Ingram Micro / IM Talbots / TLB Abercrombie & Fitch / ANF XO Group / XOXO Sycamore Networks / SCMR Aviat Networks / AVNW Symantec / SYMC AnnTaylor Stores / ANN Electronic Arts / EA New Positions Sycamore Networks / SCMR Sold Out Positions CIBER / CBR Dell / DELL Portfolio Metrics Portfolio size * Sector Weightings $89 million 92% $570 million $4.9x >9.com March 2012 – Page 42 of 169 .8x >9.3x 1.78 23.239 5.977 69 200 1.9x 2. SUBSCRIBE TODAY! www.77 19.06 45.84 3. leverage. certain non-U.971 222 3. 30 68% 0% 9% 0% 0% new 0% -50% 0% -31% Holdings as % of Co. Book 2.42 ∆ from Dec.0x .07 8.0x 2.8x >9.9x 2. All rights reserved. Book 2.20 23. 30 68% new 9% new 0% 0% 0% -31% 0% 0% Holdings as % of Co.9x n/m 2.773 Price Recent ($) 63. 3% <1% 4% <1% 3% 1% 4% <1% <1% <1% Fund* 20% 14% 11% 10% 9% 7% 6% 6% 5% 4% P/E (Est.

106 329 1.003 14.619 1.1 billion $28 billion 17x 12x 3.46 25.619 451 961 2.504 197.manualofideas. <1% <1% <1% <1% 1% <1% <1% 1% <1% 5% Fund* 7% 13% 5% 6% 5% 1% 4% 6% 1% 5% P/E (Est.Value-oriented Equity Investment Ideas for Sophisticated Investors Hound Partners (Jonathan Auerbach) Jonathan Auerbach is a “Tiger seed. MOI Signal Rank™ – Top Current Ideas of Hound Partners Market Value ($mn) 197.91 25.1x Other 37% * Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 25% Based on equity holdings disclosed in 13F-HR filings with the SEC.128 4. Grace / GRA Carter’s / CRI Google / GOOG Ensco / ESV Sherwin-Williams / SHW Level 3 Comms / LVLT TransDigm / TDG Kronos Worldwide / KRO General Motors / GM New Positions Angie’s List / ANGI General Motors / GM Groupon / GRPN Molycorp / MCP Williams Companies / WMB Sold Out Positions Compass Minerals / CMP Liberty Interactive / LINTA Microsoft / MSFT Theravance / THRX Portfolio Metrics Portfolio size * Sector Weightings $719 million 77% $5.048 2.9x 2.896 Price Recent ($) 47.46 21.719 13.0x 1.73 605.399 85 913 457 2.37 21. 30 7% -2% -11% 68% -28% 98% 30% -15% 63% new Holdings as % of Co.686 1.) This FY 14x n/a 7x 17x 9x 70x 19x n/m 18x n/m Next FY 12x n/a 7x 15x 8x 27x 20x n/m 10x n/m Price/ Tang.0x 4.06 21.207 4.19 23.003 12. Excludes portfolio cash. 30 68% 7% new 98% 63% new new 30% new 3% Holdings as % of Co. Book 4.310 4.988 1.238 699 Price Recent ($) 605. All rights reserved. certain non-U. leverage.50 98.91 55.896 10.9x 3. 30 3% 19% 7% -6% 19% 10% 24% 21% 30% 26% Shares Owned Recent (‘000) 1.9x n/m n/m 3. Book n/m >9.03 29.719 39.310 39.) This FY n/a 13x 22x 14x 18x 17x n/m 19x 9x 7x Next FY n/a 12x 18x 12x 10x 15x n/m 17x 8x 7x Price/ Tang.1x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Valeant Pharma / VRX W.91 54.6x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Google / GOOG Valeant Pharma / VRX General Motors / GM Sherwin-Williams / SHW Kronos Worldwide / KRO Groupon / GRPN Williams Companies / WMB Level 3 Comms / LVLT Molycorp / MCP Ascent Media / ASCMA Top Holdings of Hound Partners – By Dollar Value Market Value ($mn) 14.9x 9.11 ∆ from Dec.2x n/m 2.106 330 688 ∆ from Sep. and non-equity securities.1x >9.380 457 1. SUBSCRIBE TODAY! www. 30 -6% 3% 26% 10% 30% 2% 8% 24% 11% -7% Shares Owned Recent (‘000) 85 1.869 10.392 2.83 42.68 47.15 116.R.80 98.886 2.413 17.988 1.50 ∆ from Dec.207 2.37 23.S. holdings.com March 2012 – Page 43 of 169 .392 5. <1% 2% 2% <1% <1% <1% 1% <1% 1% <1% Fund* 13% 13% 8% 7% 7% 6% 6% 5% 5% 5% P/E (Est.0x n/m n/m >9.7x >9.91 47.” having received an early-stage investment from Julian Robertson.380 ∆ from Sep.15 26. Health Care 18% Basic Materials 19% © 2008-2012 by BeyondProxy LLC.

) This FY n/a 26x 16x 9x 64x 9x >99x 8x 23x n/m Next FY n/a 22x 14x 8x 34x 27x 20x 7x 20x n/m Price/ Tang.98 39. certain non-U.164 1.870 20.849 16.709 11. and non-equity securities.Value-oriented Equity Investment Ideas for Sophisticated Investors Icahn Entities (Carl Icahn) Carl Icahn is an activist investor with a long track record of success agitating for change at underperforming companies.131 14. Carl publishes an activist investing blog entitled The Icahn Report at www.164 203 20.292 76. © 2008-2012 by BeyondProxy LLC.5x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Navistar / NAV Dynegy / DYN El Paso Corp.5x 3. Book 2.) This FY 8x n/m 26x 16x 9x >99x 14x 23x n/a 22x Next FY 7x n/m 22x 14x 8x 20x 12x 20x n/a 59x Price/ Tang.8x 4.543 Price Recent ($) 45.2x 3. / EP Motorola Solutions / MSI Federal-Mogul / FDML American Railcar / ARII Mentor Graphics / MENT Hain Celestial / HAIN Icahn Enterprises / IEP WebMD Health / WBMD Top Holdings of Icahn Entities – By Dollar Value Market Value ($mn) 3.17 ∆ from Dec.251 18.18 47.8 billion $4.45 31.512 Price Recent ($) 39.131 79.02 27.692 ∆ from Sep.385 11.S.815 8.238 72.40 17.manualofideas.1x n/m 3.02 27.0x 2.28 28.251 7.79 39.961 15.5x 4. ** Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 29% Based on equity holdings disclosed in 13F-HR filings with the SEC.1x n/m 2. 30 0% 10% 0% 1% -10% 1% 0% >100% 0% 0% Holdings as % of Co. 30 21% -40% 2% 2% 17% 18% 7% 9% 9% -28% Shares Owned Recent (‘000) 7. Book n/m .49 39.362 11.279 38.com. Excludes portfolio cash.18 47.193 26.042 72. holdings.09 ∆ from Dec.79 1. 30 9% 2% 2% 17% 2% 4% 18% 21% 9% 51% Shares Owned Recent (‘000) 79.961 15. 80% 9% 12% 77% 10% 10% 55% 10% 16% 10% Fund* 25% 16% 15% 11% 10% 7% 3% 3% 2% 2% P/E (Est. 30 >100% 0% 10% 0% 1% 0% 0% 0% 0% >100% Holdings as % of Co.65 27.120 7. ** Consumer Cyclical 18% 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.773 3.430 1.54 28.0x 5.709 605 1.32 45. leverage. / EP Motorola Solutions / MSI Federal-Mogul / FDML Motorola Mobility / MMI Forest Labs / FRX American Railcar / ARII Navistar / NAV Hain Celestial / HAIN Amylin Pharma / AMLN New Positions CVR Energy / CVI Sold Out Positions Clorox / CLX Vector Group / VGR * Portfolio Metrics Portfolio size Sector Weightings $12 billion 91% $1.292 76.98 17.32 14.40 17.382 ∆ from Sep.icahnreport.430 1.1x Capital Goods 17% Other 35% *.385 30. MOI Signal Rank™ – Top Current Ideas of Icahn Entities Market Value ($mn) 3.8x n/m 2.28 39.586 1. SUBSCRIBE TODAY! www.773 2.870 1. 10% 15% 9% 12% 77% 55% 15% 16% 80% 10% Fund* 3% 0% 16% 15% 11% 3% 2% 2% 25% 1% P/E (Est.1x 4.8x 4.com March 2012 – Page 44 of 169 .375 605 3.279 38.4 billion 16x 14x 3. All rights reserved.0x n/m n/m n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Icahn Enterprises / IEP El Paso Corp.238 5.849 7.

de Vaulx was mentored by. Excludes portfolio cash.979 127. At First Eagle.5x 1 2 3 4 5 6 7 8 9 10 Company / Ticker TOTAL / TOT Devon Energy / DVN Net1 UEPS / UEPS Staples / SPLS Valassis Comms / VCI Nortel Inversora / NTL Seacor Holdings / CKH Washington Post / WPO IAMGOLD / IAG Cimarex Energy / XEC Top Holdings of International Value Advisers – By Dollar Value Market Value ($mn) 47.7x >9.65 64.32 66.70 17.324 194.9x 4.586 3.324 1.S.0x 2.14 389.8 billion 52% $13 billion $39 billion 13x 11x 2.037 35 2. All rights reserved.A New Positions Seacor Holdings / CKH Sold Out Positions Iron Mountain / IRM Vodafone / VOD * Portfolio Metrics Portfolio size * Sector Weightings $4.0x 2. holdings.98 389. 30 17% 9% 0% 14% 39% 3% new 0% 27% 35% Holdings as % of Co. Overseas.Value-oriented Equity Investment Ideas for Sophisticated Investors International Value Advisers (Charles de Vaulx) IVA was formed in 2007 and recently managed $16 billion. <1% <1% 1% <1% <1% <1% <1% 7% 2% <1% Fund* 7% 6% 6% 6% 5% 5% 4% 4% 4% 4% P/E (Est.0x 4. Value.112 456 10.65 10.90 96.9x 1.112 255.003 10.65 64.380 12.980.76 23. 30 8% 5% 4% 17% 11% 21% 6% 3% 6% 3% Shares Owned Recent (‘000) 16.588 856 ∆ from Sep. Gold and Variable Funds.3x Energy 15% Other 20% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 34% Based on equity holdings disclosed in 13F-HR filings with the SEC.02 16. <1% 1% 28% 2% 8% 8% 4% 7% <1% <1% Fund* 6% 6% 3% 4% 2% 0% 2% 4% 1% 1% P/E (Est.0x 2.18 53.13 14.2x 5. 30 -1% 17% 9% -16% -4% -16% -15% 0% 14% 0% Holdings as % of Co.7x 6. Jean-Marie Eveillard.721 4.76 117.903 Price Recent ($) 19.721 4.7x 1.65 30.721 31. CIO Charles de Vaulx was previously portfolio manager of the First Eagle Global. Book 1. and non-equity securities.743 12. and ultimately succeeded. MOI Signal Rank™ – Top Current Ideas of International Value Advisers Market Value ($mn) 127.0x 1.743 8.586 2 ∆ from Sep.186 13. U. leverage.739 Price Recent ($) 53.9x >9.111 26.9x 5. certain non-U.633 5.manualofideas.877 56.0x 1 2 3 4 5 6 7 8 9 10 Company / Ticker News Corp. Book >9.com March 2012 – Page 45 of 169 .571 547 530 12.769 9. 30 5% 4% 32% 6% 20% 3% 9% 3% 3% 8% Shares Owned Recent (‘000) 5.50 28.0x n/m .7x 1.) This FY 14x 8x 11x 11x 7x 8x 18x 18x 11x 17x Next FY 11x 8x 10x 10x 6x 9x 15x 23x 10x 15x Price/ Tang.111 26.148 5.00 ∆ from Dec. de Vaulx is a value investor in the tradition of Graham and Dodd.106 3. / NWSA TOTAL / TOT Devon Energy / DVN Microsoft / MSFT Hewlett-Packard / HPQ Dell / DELL MasterCard / MA Washington Post / WPO Staples / SPLS Berkshire Hathaway / BRK.284 3.1x n/m >9.02 14.93 ∆ from Dec.888 50.S.003 6. SUBSCRIBE TODAY! www.) This FY 8x 11x 7x 11x 9x 6x 25x 18x 13x 11x Next FY 8x 10x 9x 10x 8x 6x 16x 23x 12x 12x Price/ Tang.370 115 788 530 2. Services 31% © 2008-2012 by BeyondProxy LLC.75 396.17 23.

/ EDU Google / GOOG Yahoo! / YHOO Katy Industries / KT SINA Corp. 3% <1% <1% <1% 1% <1% 3% 2% <1% 1% Fund* 24% 16% 11% 11% 10% 9% 5% 4% 4% 3% P/E (Est.Value-oriented Equity Investment Ideas for Sophisticated Investors Joho Capital (Robert Karr) Robert Karr is a “Tiger Cub.manualofideas. / SINA Estee Lauder / EL TAL Education / XRS Veeco Instruments / VECO Hexcel / HXL Home Inns & Hotels / HMIN New Positions 21Vianet Group / VNET Changyou. Karr runs a concentrated investment fund. Book 3.930 1.645 1.14 16.14 16.32 28.91 16.9x 4.) This FY 30x 14x 20x 5x 73x 25x 37x 22x 19x 24x Next FY 23x 12x 17x 5x 49x 22x 29x 14x 17x 20x Price/ Tang.003 20.018 7.480 197.060 876 1.9x 5.104 252 821 494 364 ∆ from Sep. All rights reserved.4x .390 Price Recent ($) 26.490 3.com March 2012 – Page 46 of 169 . SUBSCRIBE TODAY! www.30 68.S.69 11.85 605.4x 3.39 26. 30 32% -6% 0% 10% 36% 14% 10% 10% 19% 21% Shares Owned Recent (‘000) 687 130 3.6x 5.61 30.9x 3.9x 1. / SINA Google / GOOG Yahoo! / YHOO Katy Industries / KT Veeco Instruments / VECO TAL Education / XRS Changyou.91 16.56 605.330 2.0x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker SINA Corp. 1% <1% <1% <1% 2% 3% <1% <1% 1% <1% Fund* 10% 16% 11% 11% 4% 5% 1% 4% 3% 1% P/E (Est. and non-equity securities. 30 12% -6% 0% 10% 32% 1% 14% 36% 10% 19% Shares Owned Recent (‘000) 4.104 777 821 494 ∆ from Sep. MOI Signal Rank™ – Top Current Ideas of Joho Capital Market Value ($mn) 4. certain non-U.com / CYOU Veeco Instruments / VECO * Sold Out Positions 7 Days Group / SVN Renren / RENN Portfolio Metrics Portfolio size Sector Weightings $492 million 98% $3.645 1.389 777 2.311 130 3.930 4.32 25. holdings.4 billion $22 billion 21x 17x 3.69 ∆ from Dec.com / CYOU Hexcel / HXL Home Inns & Hotels / HMIN 21Vianet Group / VNET Top Holdings of Joho Capital – By Dollar Value Market Value ($mn) 4.61 30. © 2008-2012 by BeyondProxy LLC.098 876 1.098 2.4x .6x 4. Excludes portfolio cash.018 7.7x Services 43% Consumer NonCyclical 9% * Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Technology 48% Based on equity holdings disclosed in 13F-HR filings with the SEC.36 11.7x 1.5x 4.480 22.0x 1 2 3 4 5 6 7 8 9 10 Company / Ticker New Oriental Edu. Book 7.0x 2.36 26.490 3.389 687 792 2.56 56.180 197.9x >9.7x 3.30 28. 30 >100% 0% 0% 0% new 16% new 0% 0% new Holdings as % of Co. with the top three holdings occasionally comprising more than 50% of the equity portfolio. 30 -25% 0% 0% 0% >100% -16% 16% new 0% 0% Holdings as % of Co.) This FY 73x 14x 20x 5x 22x 37x 5x 19x 24x 4x Next FY 49x 12x 17x 5x 14x 29x 5x 17x 20x 4x Price/ Tang.90 11.6x 3.003 20.6x 4.0x 2. leverage.390 630 Price Recent ($) 68.” having previously worked under Julian Robertson of Tiger Management.10 ∆ from Dec.

MOI Signal Rank™ – Top Current Ideas of Lane Five Capital Market Value ($mn) 86 81 1. 30 9% 0% 7% 26% -16% -3% -2% 6% 130% 15% Shares Owned Recent (‘000) 1.8x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Ambassadors Group / EPAX Williams Controls / WMCO Healthsouth / HLS Quiksilver / ZQK Learning Tree / LTRE Monotype Imaging / TYPE Markel / MKL MasterCard / MA Corinthian Colleges / COCO Skechers / SKX Top Holdings of Lane Five Capital – By Dollar Value Market Value ($mn) 424 81 86 1.796 753 50.9x . holdings.125 726 293 10 12 2.3x 4.14 13.7x >9.00 13.96 396.00 11. All rights reserved.98 15.4 billion $5.925 Price Recent ($) 5. 30 130% 0% 9% 7% 26% 6% 15% -3% -16% -2% Shares Owned Recent (‘000) 2.020 338 ∆ from Sep.020 667 1.3 billion 17x 15x 2.2x . 30 >100% 0% 0% 0% 0% 0% 0% 0% 6% 0% Holdings as % of Co.3x n/m 3.85 4. Book 2.189 667 279 1.55 5. © 2008-2012 by BeyondProxy LLC.13 407. leverage.74 407.189 279 1.8x n/m 2.) This FY 54x 13x 15x 22x 64x 17x 26x 18x 17x n/m Next FY 27x 10x 13x 13x 15x 15x 25x 15x 11x 29x Price/ Tang.9x 2.85 4.6x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Corinthian Colleges / COCO Williams Controls / WMCO Ambassadors Group / EPAX Healthsouth / HLS Quiksilver / ZQK MasterCard / MA Skechers / SKX Monotype Imaging / TYPE Learning Tree / LTRE Markel / MKL New Positions None Sold Out Positions None Portfolio Metrics Portfolio size * Sector Weightings $104 million 54% $1.14 5.1x 1.6x 1.125 12 338 293 726 10 ∆ from Sep. SUBSCRIBE TODAY! www.07 4.6x n/m 3. certain non-U.7x 2. and non-equity securities.) This FY 17x 13x 54x 15x 22x 18x n/m 17x 64x 26x Next FY 11x 10x 27x 13x 13x 15x 29x 15x 15x 25x Price/ Tang. 7% 9% <1% <1% 5% <1% <1% <1% 2% <1% Fund* 6% 7% 5% 5% 4% 4% 4% 5% 10% 5% P/E (Est.925 50.manualofideas.90 11.07 18.284 424 698 Price Recent ($) 4.13 5.55 396.S.98 ∆ from Dec. 30 6% 0% >100% 0% 0% 0% 0% 0% 0% 0% Holdings as % of Co.284 698 545 78 3.1x n/m 1.74 15.Value-oriented Equity Investment Ideas for Sophisticated Investors 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 2006.96 ∆ from Dec.796 753 78 545 3.6x >9.com March 2012 – Page 47 of 169 . 2% 9% 7% <1% <1% <1% <1% <1% 5% <1% Fund* 10% 7% 6% 5% 5% 5% 5% 4% 4% 4% P/E (Est.90 18.1x Consumer Cyclical 17% Financial 16% Other 13% * Top 10 as % of portfolio Median mar et value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 55% Based on equity holdings disclosed in 13F-HR filings with the SEC. Book 1.2x 4. Excludes portfolio cash.

1x 2. certain non-U.797 427 320 Price Recent ($) 15.6x Company / Ticker 1 2 3 4 Jefferies / JEF Mueller Industries / MLI INTL FCStone / INTL Cowen / COWN New Positions None Sold Out Positions Global Power Equip. 30 0% 3% 0% 0% Holdings as % of Co. All rights reserved. Book 1. 30 -4% 14% 7% 22% Shares Owned Recent (‘000) 1.423 ∆ from Sep. From time to time.618 994 ∆ from Sep.S. ** A large portion of Leucadia’s asset value may be attributed to holdings that are not publicly traded and are therefore not shown in the chart or tables.236 320 1.51 2.1x 1.” MOI Signal Rank™ – Top Current Ideas of Leucadia Market Value ($mn) 427 3.8x Basic Materials 34% *.6x 2. Book 1.1x Company / Ticker 1 2 3 4 INTL FCStone / INTL Jefferies / JEF Cowen / COWN Mueller Industries / MLI Top Holdings of Leucadia – By Dollar Value Market Value ($mn) 3. leverage.618 58.Value-oriented Equity Investment Ideas for Sophisticated Investors 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.manualofideas. 30 14% 22% -4% 7% Shares Owned Recent (‘000) 58.71 2.8x 1.8x .006 994 10.) This FY 9x 13x n/m 19x Next FY n/a 10x 7x n/a Price/ Tang.1x .77 ∆ from Dec.2 billion 16x 10x 1.02 ∆ from Dec.4 billion 100% $427 million $1. 9% 28% <1% 27% Fund* 3% 63% 0% 34% P/E (Est. While we are not perfect in executing this strategy. SUBSCRIBE TODAY! www. we are proud of our long-term track record. holdings. © 2008-2012 by BeyondProxy LLC.77 47. 28% 27% 9% <1% Fund* 63% 34% 3% 0% P/E (Est. and non-equity securities. are there. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings.236 1. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.) This FY 13x 19x 9x n/m Next FY 10x n/a n/a 7x Price/ Tang. we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. 30 3% 0% 0% 0% Holdings as % of Co. which we believe. ** Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 66% Based on equity holdings disclosed in 13F-HR filings with the SEC.797 Price Recent ($) 22. / GLPW Portfolio Metrics Portfolio size * Sector Weightings $1.51 15.com March 2012 – Page 48 of 169 .423 1.02 22. Excludes portfolio cash.71 47.006 10.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 27,134 197,003 15,938 460,050 591 92,635 6,290 4,180 3,790 2,403 Price Recent ($) 545.04 605.91 172.60 493.42 13.29 113.90 100.49 26.85 36.84 24.47 ∆ from Dec. 30 17% -6% 25% 22% 47% 12% 27% 12% -4% 6% Shares Owned Recent (‘000) 1,467 1,347 4,680 2,151 7,863 4,797 3,625 9,957 6,235 9,058 ∆ from Sep. 30 >100% 44% 11% 4% 0% >100% 83% 48% 7% 16% Holdings as % of Co. 3% <1% 5% <1% 18% <1% 6% 6% 6% 9% Fund* 5% 5% 5% 7% 1% 4% 2% 2% 2% 1% P/E (Est.) This FY 24x 14x 25x 12x 17x 19x 22x 30x 17x 57x Next FY 18x 12x 21x 10x 14x 16x 18x 23x 15x 35x Price/ Tang. Book >9.9x 4.0x 7.4x 5.4x 2.4x >9.9x 6.4x 7.5x 3.0x >9.9x

1 2 3 4 5 6 7 8 9 10

Company / Ticker priceline.com / PCLN Google / GOOG Polo Ralph Lauren / RL Apple / AAPL VanceInfo / VIT Visa / V Fossil / FOSL New Oriental Edu. / EDU Williams-Sonoma / WSM Accretive Health / AH

Top Holdings of Lone Pine – By Dollar Value
Market Value ($mn) 460,050 197,003 15,938 27,134 24,408 14,680 92,635 14,029 42,367 14,231 Price Recent ($) 493.42 605.91 172.60 545.04 50.17 42.89 113.90 49.31 51.59 39.69 ∆ from Dec. 30 22% -6% 25% 17% 12% 4% 12% 10% 21% 9% Shares Owned Recent (‘000) 2,151 1,347 4,680 1,467 13,779 15,341 4,797 10,584 9,697 12,199 ∆ from Sep. 30 4% 44% 11% >100% -5% -3% >100% -13% 32% 4% Holdings as % of Co. <1% <1% 5% 3% 3% 4% <1% 4% 1% 3% Fund* 7% 5% 5% 5% 5% 4% 4% 3% 3% 3% P/E (Est.) This FY 12x 14x 25x 24x 17x 18x 19x 62x 20x 17x Next FY 10x 12x 21x 18x 14x 16x 16x 43x 17x 14x Price/ Tang. Book 5.4x 4.0x 7.4x >9.9x n/m n/m >9.9x n/m 5.7x 5.4x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Apple / AAPL Google / GOOG Polo Ralph Lauren / RL priceline.com / PCLN Express Scripts / ESRX Dollar General / DG Visa / V Crown Castle / CCI Las Vegas Sands / LVS NetApp / NTAP

New Positions
Baidu.com / BIDU eBay / EBAY El Paso Corp. / EP FMC Technologies / FTI Green Mtn Coffee / GMCR Kinder Morgan / KMI Liberty Media / LMCA Lululemon Athletica / LULU Medco Health / MHS Michael Kors / KORS V.F. Corp. / VFC W.R. Grace / GRA Willis Group / WSH

Sold Out Positions
Bed Bath & Beyond / BBBY Citigroup / C Coca-Cola / KO Dollar Tree / DLTR Estee Lauder / EL Flavors & Fragrances / IFF Goodrich Corp. / GR Grifols / GRFS Liberty Starz / LSTZA NII Holdings / NIHD Royal Caribbean / RCL Schlumberger / SLB U.S. Bancorp / USB United Technologies / UTX Yum! Brands / YUM

Portfolio Metrics
Portfolio size

*

Sector Weightings
$15 billion 45% $11 billion $32 billion 18x 16x 4.8x
Consumer Cyclical 14% Other 19%

*

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Technology 38%

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.

Services 30%

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March 2012 – Page 49 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 8,590 36,475 368 93 401,671 211,989 11,347 1,098 9,124 160 Price Recent ($) 421.00 30.98 14.09 44.00 83.80 61.90 31.31 8.06 43.03 13.35 ∆ from Dec. 30 -2% 13% 6% 23% -1% 4% 4% 0% 5% 4% Shares Owned Recent (‘000) 279 3,102 3,505 229 811 1,086 146 107 48 154 ∆ from Sep. 30 0% 0% 0% 0% 7% 1% >100% 88% >100% 84% Holdings as % of Co. 1% <1% 13% 11% <1% <1% <1% <1% <1% 1% Fund* 6% 5% 3% 1% 4% 4% 0% 0% 0% 0% P/E (Est.) This FY 10x n/a 14x n/a 10x 14x 21x n/m 24x n/a Next FY 20x n/a 13x n/a 9x 13x 19x n/m 21x n/a Price/ Tang. Book 1.1x 4.3x 1.1x .9x 2.6x 4.5x >9.9x 1.1x 4.7x 1.2x

1 2 3 4 5 6 7 8 9 10
1

Company / Ticker Fairfax Financial / FRFHF Brookfield Asset / BAM Union Bankshares / UBSH Investors Title / ITIC Exxon Mobil / XOM Wal-Mart / WMT Paychex / PAYX Louisiana-Pacific / LPX Expeditors Int’l / EXPD Nicholas Financial / NICK

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
Market Value ($mn) 6,777 8,590 58,691 194,903 36,475 401,671 211,989 74,293 74,005 11,971 Price Recent ($) 29.91 421.00 93.40 117,980.00 30.98 83.80 61.90 41.45 76.69 35.72 ∆ from Dec. 30 -2% -2% 7% 3% 13% -1% 4% 11% 5% 22% Shares Owned Recent (‘000) 5,191 279 1,247 1 3,102 811 1,086 1,538 741 1,407 ∆ from Sep. 30 0% 0% 0% -52% 0% 7% 1% 0% 0% 0% Holdings as % of Co. 2% 1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 8% 6% 6% 6% 5% 4% 4% 3% 3% 3% P/E (Est.) This FY 17x 10x 16x 17x n/a 10x 14x 14x 16x 26x Next FY 16x 20x 14x 15x n/a 9x 13x 12x 14x 23x Price/ Tang. Book 2.6x 1.1x n/m 2.0x 4.3x 2.6x 4.5x >9.9x >9.9x n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker CarMax / KMX Fairfax Financial / FRFHF Diageo / DEO Berkshire Hathaway / BRK.A Brookfield Asset / BAM Exxon Mobil / XOM Wal-Mart / WMT Walt Disney / DIS UPS / UPS Marriott / MAR

New Positions
DreamWorks / DWA Loews Corp. / L Marriott Vacations / VAC McCormick / MKC Mosaic Company / MOS SEI Investments / SEIC Vodafone / VOD

Sold Out Positions
Campbell Soup / CPB EnCana / ECA

Portfolio Metrics
Portfolio size

*

Sector Weightings
$1.9 billion 49% $19 billion $49 billion 16x 14x 2.8x
Consumer NonCyclical 10% Other 30%

*, **

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Services 35%

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.

**

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.

Financial 26%

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March 2012 – Page 50 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 2,220 715 2,081 12,869 1,698 3,554 21,391 136 606 Price Recent ($) 14.73 9.09 67.76 55.80 11.84 9.81 27.63 7.69 4.05 ∆ from Dec. 30 -5% -2% 4% 19% 42% 13% 7% 18% 22% Shares Owned Recent (‘000) 17,474 23,534 8,130 6,631 51,262 14,618 85 462 445 ∆ from Sep. 30 3% 0% 0% 0% 0% 14% 0% 0% 0% Holdings as % of Co. 12% 30% 26% 3% 36% 4% <1% 3% <1% Fund* 12% 10% 26% 17% 28% 7% 0% 0% 0% P/E (Est.) This FY 16x n/m n/a 18x n/a 13x 22x 26x n/m Next FY 9x n/m n/a 10x n/a 12x 17x 17x n/m Price/ Tang. Book 5.1x n/m 2.3x 1.7x n/m >9.9x 5.5x 2.9x >9.9x

1 2 3 4 5 6 7 8 9

Company / Ticker Key Energy Services / KEG Leap Wireless / LEAP Loral Space / LORL Ensco / ESV Lions Gate / LGF MetroPCS / PCS TIM Participacoes / TSU Rand Logistics / RLOG Dynavax Tech / DVAX

Top Holdings of MHR Fund Management – By Dollar Value
Market Value ($mn) 1,698 2,081 12,869 2,220 715 3,554 136 21,391 606 Price Recent ($) 11.84 67.76 55.80 14.73 9.09 9.81 7.69 27.63 4.05 ∆ from Dec. 30 42% 4% 19% -5% -2% 13% 18% 7% 22% Shares Owned Recent (‘000) 51,262 8,130 6,631 17,474 23,534 14,618 462 85 445 ∆ from Sep. 30 0% 0% 0% 3% 0% 14% 0% 0% 0% Holdings as % of Co. 36% 26% 3% 12% 30% 4% 3% <1% <1% Fund* 28% 26% 17% 12% 10% 7% 0% 0% 0% P/E (Est.) This FY n/a n/a 18x 16x n/m 13x 26x 22x n/m Next FY n/a n/a 10x 9x n/m 12x 17x 17x n/m Price/ Tang. Book n/m 2.3x 1.7x 5.1x n/m >9.9x 2.9x 5.5x >9.9x

1 2 3 4 5 6 7 8 9

Company / Ticker Lions Gate / LGF Loral Space / LORL Ensco / ESV Key Energy Services / KEG Leap Wireless / LEAP MetroPCS / PCS Rand Logistics / RLOG TIM Participacoes / TSU Dynavax Tech / DVAX

New Positions
None

Sold Out Positions
M & F Worldwide / MFW

Portfolio Metrics
Portfolio size

*

Sector Weightings
$2.2 billion 100% $1.9 billion $4.6 billion 18x 12x 2.9x
Energy 29% Technology 26%

*

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Services 45%

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.

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March 2012 – Page 51 of 169

713 486 1.4x 1. SUBSCRIBE TODAY! www.886 3.8x n/m n/m n/m >9.35 11.com March 2012 – Page 52 of 169 .351 2.S.77 31. 30 0% 4% -10% -12% 0% -12% 0% 0% -11% 0% Holdings as % of Co. / MIC Wright Express / WXS Energy XXI / EXXI Top Holdings of MSD Capital – By Dollar Value Market Value ($mn) 898 2.7x n/m n/m 1.356 2. / MIC Tyler Tech / TYL First Opportunity Fund / FF Sunstone Hotel / SHO Bluenight Energy / BKEP New Positions None Sold Out Positions Atlas Pipeline Part.609 550 ∆ from Sep.090 1.65 37.9x n/m 2. All rights reserved. MOI Signal Rank™ – Top Current Ideas of MSD Capital Market Value ($mn) 243 784 898 2.615 1.156 243 Price Recent ($) 49.65 32.77 31.68 11. and non-equity securities. Book n/m 2. where he was head of the Special Investments Group. holdings.4x >9.5x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker DineEquity / DIN EchoStar / SATS Wright Express / WXS Domino’s Pizza / DPZ Asbury Automotive / ABG Macquarie Infrastr. Phelan previously spent five years at Eddie Lampert’s ESL Investments.686 3.4x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Bluenight Energy / BKEP Asbury Automotive / ABG DineEquity / DIN EchoStar / SATS First Opportunity Fund / FF Tyler Tech / TYL Domino’s Pizza / DPZ Macquarie Infrastr.8x 1.886 3.615 3.73 36.090 486 1. 10% 12% 14% 4% 9% 5% 5% 7% 4% <1% Fund* 3% 12% 16% 14% 5% 6% 12% 11% 12% 3% P/E (Est.496 3.77 36.877 Price Recent ($) 6.512 3.600 1. Excludes portfolio cash.60 ∆ from Dec. 30 0% 0% 0% 4% 0% 0% -12% -12% -10% 0% Holdings as % of Co. certain non-U.74 6.90 ∆ from Dec.713 2.manualofideas. / APL * Portfolio Metrics Portfolio size Sector Weightings $787 million 97% $1.889 1.351 1.68 32. 30 6% 14% 18% 50% -5% 22% -4% 3% 12% 18% Shares Owned Recent (‘000) 3.2 billion $1. leverage. 14% 4% 4% 5% 12% 7% 5% 9% 3% 10% Fund* 16% 14% 12% 12% 12% 11% 6% 5% 4% 3% P/E (Est. having teamed up with Michael Dell to manage his personal capital in the late 1990s.609 2.889 784 1.7x n/m 1.35 60.46 28.095 1.) This FY 12x >99x 14x 20x 14x 10x 45x 15x n/a n/m Next FY 12x 68x 13x 17x 12x 14x 37x 13x n/a 20x Price/ Tang.600 3.7x Transportation 11% Technology 7% Other 11% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 70% Based on equity holdings disclosed in 13F-HR filings with the SEC.90 24. © 2008-2012 by BeyondProxy LLC.331 2.4 billion 14x 14x 1.68 49.686 2.331 1.68 28.77 9. Fuhrman previously spent ten years at Goldman Sachs.577 3. 30 18% 50% 12% -4% 14% 3% 22% -5% 20% 6% Shares Owned Recent (‘000) 2.577 ∆ from Sep.) This FY n/m 14x 12x >99x 15x 45x 20x 10x 14x 10x Next FY 20x 12x 12x 68x 13x 37x 17x 14x 13x 8x Price/ Tang.356 3.095 1. Book n/m 1.Value-oriented Equity Investment Ideas for Sophisticated Investors MSD Capital (Glenn Fuhrman and John Phelan) Glenn Fuhrman and John Phelan are co-managing partners and co-founders of MSD.512 3.46 24.73 60.9x 2.

986 1. © 2008-2012 by BeyondProxy LLC. Excludes portfolio cash. leverage.6x . All rights reserved.980 22.903 2. / BIP Brookfield Prop.903 56.0x >9.577 38.9x 1. / BPO Harvest Natural / HNR Portfolio Metrics Portfolio size * Sector Weightings $284 million 97% $3.04 8.47 45.e.) This FY 17x 51x 13x 9x n/a 8x n/m 14x n/m n/a Next FY 15x 13x 10x 8x n/a 7x 72x 13x 14x n/a Price/ Tang.04 ∆ from Dec.183 466 32.267 398 1.1x n/m .93 1.934 Price Recent ($) 22.577 38.8x 5.111 81.Value-oriented Equity Investment Ideas for Sophisticated Investors Pabrai Funds (Mohnish Pabrai) Mohnish Pabrai is founder and managing partner of Pabrai Investment Funds.A Terex / TEX DIRECTV / DTV Wells Fargo / WFC Potash / POT Citigroup / C Pinnacle Airlines / PNCL Horsehead / ZINC CapitalSource / CSE Brookfield Resident.188 226 ∆ from Sep.424 96.70 32. a family of value-oriented investment partnerships with a fee structure similar to that of the Buffett Partnerships of the 1950s and ‘60s.47 30.3x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Berkshire Hathaway / BRK.com March 2012 – Page 53 of 169 .70 117.855 398 2.A Goldman Sachs / GS Horsehead / ZINC DIRECTV / DTV Bank of America / BAC Citigroup / C CapitalSource / CSE New Positions Citigroup / C DIRECTV / DTV Terex / TEX Sold Out Positions Air Transport / ATSG Brookfield Infrastr. 30 3% 66% 6% 10% 8% 25% 74% 18% 5% 21% Shares Owned Recent (‘000) 0 2.465 32.51 30. / BRP Top Holdings of Pabrai Funds – By Dollar Value Market Value ($mn) 2.26 44.0x . Pabrai Funds have a long-term track record vastly superior to that of the S&P 500 Index. 30 >100% new new 4% 0% new 0% 37% -22% -6% Holdings as % of Co. 30 66% 10% 8% 3% 26% 18% 6% 45% 25% 5% Shares Owned Recent (‘000) 2.465 159.263 27 466 1.111 159.) This FY 51x 9x n/a 17x 10x 14x 13x 11x 8x n/m Next FY 13x 8x n/a 15x 9x 13x 10x 7x 7x 14x Price/ Tang.12 10. SUBSCRIBE TODAY! www. MOI Signal Rank™ – Top Current Ideas of Pabrai Funds Market Value ($mn) 194. 2% <1% <1% <1% <1% 4% <1% <1% <1% <1% Fund* 18% 15% 13% 12% 9% 7% 6% 6% 6% 5% P/E (Est.934 799 Price Recent ($) 117.S.387 796 0 215 1.manualofideas.43 10.8 billion $40 billion 12x 12x 1.04 ∆ from Dec.7x .7x 1.267 1.00 114. certain non-U.0x .67 45.980. Book 2.26 44.93 7.387 796 506 1.424 194. Buffett and Greenblatt. <1% 2% <1% <1% <1% <1% 10% 4% <1% <1% Fund* 12% 18% 6% 15% 13% 6% 1% 7% 5% 1% P/E (Est.1x 1. 30 new 4% 0% >100% -26% 37% new -70% new -22% Holdings as % of Co.0x 2. i.4x 1.263 1.9x 1.3x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Terex / TEX Wells Fargo / WFC Potash / POT Berkshire Hathaway / BRK. Book >9.07 32. and non-equity securities.51 8. no management fee and 25% performance fee above 6% annual hurdle rate. holdings.136 506 2.8x 5.1x Basic Materials 20% Capital Goods 18% * Other 9% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 53% Based on equity holdings disclosed in 13F-HR filings with the SEC. Pabrai follows an investment strategy built upon the principles of Graham.855 2.797 96.9x n/m 1.188 ∆ from Sep.67 7.

– By Dollar Value Market Value ($mn) 9.com March 2012 – Page 54 of 169 .0 billion $17 billion 12x 11x 1.130 3.700 ∆ from Sep.04 2.45 8.608 11.520 13. Portfolio Metrics Portfolio size * Sector Weightings $13 billion 61% $6.) This FY 8x n/a 64x n/m 18x 22x 15x n/m n/a n/m Next FY 7x n/a 34x n/m 16x 18x 13x n/m n/a n/m Price/ Tang. © 2008-2012 by BeyondProxy LLC.35 42.152 9. 30 39% 8% 2% 0% 1% 12% 9% 15% 19% 36% Shares Owned Recent (‘000) 51.193 7.Value-oriented Equity Investment Ideas for Sophisticated Investors Paulson & Co.032 23.541 437 99 516 Price Recent ($) 30.815 2.9x n/m n/m 2.11 87.955 1.735 34.676 5. SUBSCRIBE TODAY! www.4x 1.4x n/m 4.000 22.343 8. Book 9. (John Paulson) John Paulson founded his firm with $2 million in 1994. The exchange starts at 50 minutes 30 seconds into the call (related slides).5x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Delphi Automotive / DLPH AngloGold Ashanti / AU Anadarko Petroleum / APC Hartford Financial / HIG JPMorgan Chase / JPM Capital One / COF MGM Mirage / MGM Mylan / MYL Motorola Mobility / MMI Gold Fields / GFI New Positions Delphi Automotive / DLPH El Paso Corp.90 37.84 39.2x 2.04 19.103 11.861 44 11.28 14.14 ∆ from Dec.82 5. All rights reserved.418 21.246 Price Recent ($) 30.48 125.47 ∆ from Dec.4x n/m n/m 3.735 2.2x 9.1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Delphi Automotive / DLPH SuperMedia / SPMD Motorola Mobility / MMI NovaGold / NG Goodrich Corp.97 4.291 9.571 43. Market Value ($mn) 9.5x . 30 new -7% -32% -3% 0% -39% -8% -15% 22% -4% Holdings as % of Co.80 39.506 ∆ from Sep. certain non-U.485 37.04 45.725 11.03 1.0x >9.0x 3.347 15.000 5.manualofideas. 16% 17% 4% 8% 1% 8% <1% 6% 7% 5% Fund* 12% 0% 3% 2% 1% 2% 1% 0% 0% 0% P/E (Est. leverage. Book 9.S. 30 new 0% 22% 14% >100% 15% >100% 2% 0% >100% Holdings as % of Co. holdings.580 37. and non-equity securities.9x Consumer Cyclical 12% Other 35% * Financial 30% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Basic Materials 22% Based on equity holdings disclosed in 13F-HR filings with the SEC.) This FY 8x 10x 26x 6x 8x 8x n/m 11x 64x 17x Next FY 7x 8x 19x 5x 7x 7x n/m 10x 34x 10x Price/ Tang.45 16.806 142.9x 3.61 48. Excludes portfolio cash.428 5.0x n/m 3.63 22. / GR AMC Networks / AMCX Medco Health / MHS Tower Hill Mines / THM Dex One / DEXO FelCor Lodging / FCH Top Holdings of Paulson & Co.000 23.815 12. He gained notoriety by profiting hugely from the crisis of 2008.861 17. 16% 9% 2% 8% <1% 3% 8% 5% 4% 3% Fund* 12% 12% 6% 6% 5% 5% 4% 4% 3% 3% P/E (Est.520 18.909 22.694 3. MOI Signal Rank™ – Top Current Ideas of Paulson & Co.2x 1.750 2. / EP Royal Bank Scotland / RBS United Rentals / URI Sold Out Positions Alpha Natural / ANR Ashford Hospitality / AHT BlackRock / BLK Citigroup / C Covidien / COV CVS Caremark / CVS Hewlett-Packard / HPQ Lear / LEA Liberty Interactive / LINTA McClatchy / MNI Medtronic / MDT MetLife / MET Nalco Holding / NLC PAETEC Holding / PAET Regions Financial / RF RLJ Lodging / RLJ SL Green Realty / SLG Talisman Energy / TLM Temple-Inland / TIN Weyerhaeuser / WY Southern Union / SUG HIG: Listen to Paulson’s contentious exchange with the CEO on the Q4 earnings call on February 8. 30 39% 6% 14% 22% 13% 14% 40% 6% 2% 8% Shares Owned Recent (‘000) 51.19 60.

322 6.47 31.996 4. All rights reserved.743 5.S.581 Price Recent ($) 116.29 11.011 104.19 83. MOI Signal Rank™ – Top Current Ideas of Pennant Capital Market Value ($mn) 8. 30 11% 0% 2% 14% new new 0% 7% 90% >100% Holdings as % of Co.97 61.011 22. 30 21% 11% 13% 8% 22% 4% 19% -3% 66% 21% Shares Owned Recent (‘000) 2. and non-equity securities.59 30.680 4.322 2.65 39.9x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker TransDigm / TDG DaVita / DVA Qualcomm / QCOM Fidelity National / FIS Apple / AAPL Dollar General / DG TripAdvisor / TRIP WellPoint / WLP Terex / TEX Sensata Tech / ST New Positions Huntington Ingalls / HII TripAdvisor / TRIP Sold Out Positions Adobe Systems / ADBE Aviat Networks / AVNW Calumet Specialty / CLMT CF Industries / CF CVR Energy / CVI Expedia / EXPE General Motors / GM HollyFrontier / HFC Kronos Worldwide / KRO Rockwell Collins / COL Wells Fargo / WFC Western Refining / WNR Portfolio Metrics Portfolio size * Sector Weightings $4.8x >9.9x n/m n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Fidelity National / FIS Universal Stainless / USAP DaVita / DVA Apple / AAPL Huntington Ingalls / HII TripAdvisor / TRIP Qualcomm / QCOM WellPoint / WLP Sprint Nextel / S Aeroflex / ARX Top Holdings of Pennant Capital – By Dollar Value Market Value ($mn) 5. Excludes portfolio cash.65 493.89 30.851 460.17 2. 6% 4% <1% 3% <1% 1% 4% <1% 7% 3% Fund* 8% 6% 6% 6% 5% 5% 4% 4% 4% 4% P/E (Est.42 36. 30 -5% 2% 0% 11% 14% 0% new 7% -7% -18% Holdings as % of Co. Book n/m 1.786 4.9x >9.) This FY 19x 17x 16x 13x 12x 18x 22x 8x 51x 15x Next FY 17x 14x 15x 11x 10x 16x 18x 8x 13x 12x Price/ Tang.284 4.97 493.546 5.8x n/m 5. Fournier founded Pennant in 2001.Value-oriented Equity Investment Ideas for Sophisticated Investors Pennant (Alan Fournier) Alan Fournier started his career at Sanford Bernstein in 1988 and became a partner in 1990. © 2008-2012 by BeyondProxy LLC. 3% 10% 4% <1% 7% 4% <1% <1% <1% 4% Fund* 6% 1% 6% 5% 3% 4% 6% 4% 1% 1% P/E (Est.73 28.411 8.781 19.807 3.336 ∆ from Sep.7x n/m 5.284 420 3. 30 8% 4% 11% 22% 17% 19% 13% -3% -2% 13% Shares Owned Recent (‘000) 8.manualofideas.379 2.73 64.17 22.7x Other 37% * Technology 21% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 21% Capital Goods 21% Based on equity holdings disclosed in 13F-HR filings with the SEC.781 7.465 5. holdings. certain non-U.01 83. leverage.851 104.996 2.042 ∆ from Sep.580 267 7.4x n/m n/m >9.860 982 Price Recent ($) 28.04 64. where he was responsible for global equities.) This FY 13x 10x 17x 12x 10x 22x 16x 8x n/m 14x Next FY 11x 8x 14x 10x 13x 18x 15x 8x n/m 10x Price/ Tang.69 ∆ from Dec. He also worked for Rich Pzena’s firm and David Tepper’s Appaloosa.886 7.4x n/m n/m 4.580 460.3 billion 52% $6. Book n/m n/m 4.050 14.04 61.618 5. SUBSCRIBE TODAY! www.050 1.com March 2012 – Page 55 of 169 .815 420 4.379 8.411 22.8 billion $35 billion 13x 12x 2.815 686 3.58 ∆ from Dec.42 42.400 3.

63 42.076 3.819 3.58 57.263 68. Book n/m n/m 2.234 39.385 26.58 57.562 ∆ from Sep.941 1.66 19. leverage.1 billion $23 billion 20x 20x 1.342 3.7x n/m 5.742 9.8x n/m .966 Price Recent ($) 74. Fortune Brands.7x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Can. managing member of Pershing Square Capital. with proposals for unlocking value.72 51.40 53.120 Fortune Brands has separated into Beam and Fortune Brands Home.070 1. On the long side. Sold Out Positions Lowe’s / LOW Portfolio Metrics Portfolio size * Sector Weightings $8.15 38.339 9.14 51.562 3. 30 new new >100% 0% 0% 0% 0% -16% -26% 0% 1 2 3 4 5 6 7 8 9 10 Company / Ticker Beam / BEAM Fortune Brands Home / FBHS Can. Before the credit crunch developed into a full-blown economic crisis.65 32.7x . Ackman has approached large companies.234 20.819 26. He runs a concentrated portfolio with the largest ten equity investments accounting for the vast majority of his long book.8x 1.C.154 39. 30 5% 16% 10% 12% 21% 15% 16% 3% 0% 25% Recent (‘000) 20.9x 1.789 96.8x 2.) This FY n/a 35x n/m 23x 8x 17x 16x 26x n/m 46x Next FY n/a 21x 96x 21x 7x 15x 14x 20x >99x 25x Price/ Tang.9x . is a value-oriented activist investor. Pacific Railway / CP General Growth / GGP J.076 72.93 38. Book 2.0x 1.568 3.15 47. holdings.161 8.14 ∆ from Dec.941 68.966 1.070 12.339 8.263 Price Recent ($) 53. MOI Signal Rank™ – Top Current Ideas of Pershing Square Market Value ($mn) 8.44 16.manualofideas. 30 >100% 0% 0% new 0% -16% -26% new 0% 0% Holdings as % of Co. certain non-U. SUBSCRIBE TODAY! www.742 15. All rights reserved. 13% 13% 14% 8% 18% 9% 9% 1% 7% <1% Fund* 13% 5% 21% 14% 19% 2% 2% 9% 6% 10% P/E (Est.) This FY 23x 26x n/a n/m 35x 46x n/m 17x 16x 8x Next FY 21x 20x n/a 96x 21x 25x >99x 15x 14x 7x Price/ Tang. Excludes portfolio cash.C.063 1.7x Shares Owned ∆ from Sep. Ackman made a strong case for why MBIA (MBI) and AMBAC (ABK) were overvalued and fundamentally more distressed than the market had judged at the time.93 ∆ from Dec.63 16.161 6. Transportation 23% © 2008-2012 by BeyondProxy LLC.120 21.9x Consumer NonCyclical 22% * Other 15% Services 40% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Based on equity holdings disclosed in 13F-HR filings with the SEC. 30 10% 21% 12% 5% 25% 3% 0% 16% 16% 15% Shares Owned Recent (‘000) 24.819 24. Holdings as % of Co.161 6.9x n/m .819 20.342 96.Value-oriented Equity Investment Ideas for Sophisticated Investors Pershing Square (Bill Ackman) Bill Ackman.789 3.65 19.9x n/m 5.S.8x 2. Penney / JCP Alexander & Baldwin / ALEX Howard Hughes / HHC Kraft Foods / KFT Family Dollar Stores / FDO Citigroup / C Top Holdings of Pershing Square – By Dollar Value Market Value ($mn) 12.161 8.40 42. Pacific Railway / CP J.66 32.44 47.154 72.0x 1. Penney / JCP General Growth / GGP Beam / BEAM Citigroup / C Kraft Foods / KFT Family Dollar Stores / FDO Fortune Brands Home / FBHS Howard Hughes / HHC Alexander & Baldwin / ALEX New Positions Beam (BEAM) Fortune Brands Home / FBHS Pershing Square previously owned the combined company.385 20.com March 2012 – Page 56 of 169 .72 74. including McDonald’s (MCD) and Target (TGT).063 15. 14% 18% 8% 13% <1% 1% 7% 13% 9% 9% Fund* 21% 19% 14% 13% 10% 9% 6% 5% 2% 2% P/E (Est. and non-equity securities.568 21.7 billion 100% $9.

in San Francisco. at which time they teamed up to start Sageview. Excludes portfolio cash. while Stuart started with KKR in New York.668 1.9x n/m 2. They continued serving in leadership roles at KKR until 2005. SUBSCRIBE TODAY! www.9x >9. <1% 5% <1% <1% Fund* 44% 30% 22% 4% P/E (Est.Value-oriented Equity Investment Ideas for Sophisticated Investors Sageview (Ed Gilhuly and Scott Stuart) Ed Gilhuly and Scott Stuart were classmates at Stanford Business School.4x Company / Ticker 1 2 3 4 COMSCORE / SCOR Liberty Interactive / LINTA Life Technologies / LIFE Arris Group / ARRS Top Holdings of Sageview Capital – By Dollar Value Market Value ($mn) 8.108 453 ∆ from Sep.S.95 ∆ from Dec.8 billion $9.409 Price Recent ($) 49. 5% <1% <1% <1% Fund* 30% 22% 44% 4% P/E (Est.550 453 ∆ from Sep.16 11.3 billion 13x 11x 2. 30 -30% 4% 0% -88% Holdings as % of Co.51 18. 30 4% 0% -30% -88% Holdings as % of Co. and non-equity securities.409 Price Recent ($) 22.manualofideas. Book >9.830 1.1x Health Care 44% * Technology 4% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 52% Based on equity holdings disclosed in 13F-HR filings with the SEC. The firm follows a highly concentrated. certain non-U.830 744 10.550 1.16 49. 30 27% 6% 12% 10% Shares Owned Recent (‘000) 1. leverage.55 11.668 1. 30 6% 12% 27% 10% Shares Owned Recent (‘000) 1.9x 2. MOI Signal Rank™ – Top Current Ideas of Sageview Capital Market Value ($mn) 744 10.55 22.) This FY 12x n/m 25x 14x Next FY 11x >99x 18x 11x Price/ Tang.4x Company / Ticker 1 2 3 4 Life Technologies / LIFE COMSCORE / SCOR Liberty Interactive / LINTA Arris Group / ARRS New Positions None Sold Out Positions Covidien / COV State Bank Financial / STBZ Portfolio Metrics Portfolio size * Sector Weightings $126 million 100% $8. value-oriented investment approach. Gilhuly joined Kohlberg Kravis Roberts & Co. © 2008-2012 by BeyondProxy LLC.51 18. holdings.717 8.95 ∆ from Dec.9x n/m 1. Each became a partner of KKR at the end of 1994.com March 2012 – Page 57 of 169 . Book 1. All rights reserved.717 1. After graduating in 1986.108 1.) This FY n/m 25x 12x 14x Next FY >99x 18x 11x 11x Price/ Tang.

91 29.92 63.889 4.262 2.69 20.815 8.112 3.128 4.manualofideas.9x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Google / GOOG Arcos Dorados / ARCO PepsiCo / PEP Coca-Cola Enterprise / CCE Williams Companies / WMB Sally Beauty / SBH Fresh Market / TFM Tupperware Brands / TUP Family Dollar Stores / FDO TripAdvisor / TRIP Top Holdings of Scout Capital – By Dollar Value Market Value ($mn) 5. Book 4.262 485 7.95 27.4x n/m n/m 2.104 3.980 2.06 27.98 61.271 2.559 6.86 57.303 968 3.65 32. 30 -10% 52% new 17% 17% 0% -6% new new 9% Holdings as % of Co.405 8.527 5. leverage.003 4.) This FY 14x 36x 14x 12x 19x 17x 41x 12x 16x 22x Next FY 12x 23x 13x 11x 20x 15x 33x 11x 14x 18x Price/ Tang.83 605.1 billion $38 billion 17x 15x 5.980 8.011 Price Recent ($) 605.4x 4. Book n/m 7. MOI Signal Rank™ – Top Current Ideas of Scout Capital Market Value ($mn) 197.91 20.815 7.9x 7.112 Price Recent ($) 31.054 2.581 4.054 3.com March 2012 – Page 58 of 169 .104 7. Excludes portfolio cash.04 ∆ from Dec. All rights reserved. 30 21% 1% -6% 8% 6% 0% -4% 8% -4% 10% Shares Owned Recent (‘000) 9.003 17. and non-equity securities. The firm runs a concentrated portfolio of undervalued equities.46 22.Value-oriented Equity Investment Ideas for Sophisticated Investors Scout (James Crichton) James Crichton co-founded Scout with Adam Weiss in 1999.98 ∆ from Dec.365 197.365 99.83 63.2x n/m 5.405 3.551 7.800 14.95 43.789 4. Technology 22% © 2008-2012 by BeyondProxy LLC.) This FY 15x 36x 14x 19x 12x 16x 20x 17x 14x 41x Next FY 12x 23x 12x 20x 11x 14x 17x 15x 13x 33x Price/ Tang.527 1.2x n/m >9.S.43 29.789 1. 6% 7% <1% 1% 3% 3% 10% 4% <1% 7% Fund* 11% 11% 10% 8% 8% 7% 6% 6% 5% 5% P/E (Est. holdings. <1% 7% <1% 3% 1% 4% 7% 2% 3% 1% Fund* 10% 11% 5% 8% 8% 6% 5% 2% 7% 2% P/E (Est. 30 -6% 1% -4% 6% 8% 8% 10% 11% 0% 19% Shares Owned Recent (‘000) 485 14.92 43.5x Consumer NonCyclical 16% * Other 17% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 45% Based on equity holdings disclosed in 13F-HR filings with the SEC. 30 new 52% new 17% 17% new 9% new 0% new Holdings as % of Co.9x n/m n/m n/m >9. SUBSCRIBE TODAY! www.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Sensata Tech / ST Arcos Dorados / ARCO Google / GOOG Williams Companies / WMB Coca-Cola Enterprise / CCE Family Dollar Stores / FDO Domino’s Pizza / DPZ Sally Beauty / SBH PepsiCo / PEP Fresh Market / TFM New Positions Google / GOOG ITC Holdings / ITC Las Vegas Sands / LVS Lululemon Athletica / LULU Michael Kors / KORS Molson Coors / TAP PepsiCo / PEP Sally Beauty / SBH TripAdvisor / TRIP Tupperware Brands / TUP Sold Out Positions BHP Billiton / BHP CF Industries / CF eBay / EBAY Expedia / EXPE Sherwin-Williams / SHW Visa / V Portfolio Metrics Portfolio size * Sector Weightings $2.06 22.43 57.700 ∆ from Sep.271 99. certain non-U.303 ∆ from Sep.0x 2.559 17.65 30.0x 7.549 6.8 billion 78% $8.128 8.1x 5.

10 1. and non-equity securities.685 710 75 2.9x .8x 1.460 2. MOI Signal Rank™ – Top Current Ideas of Second Curve Market Value ($mn) 499 197 269 269 1. a value-oriented firm with a focus on the financial sector.15 1.9x 1. leverage.0x . 30 16% 15% 7% 18% 30% 0% 17% 3% new -17% Holdings as % of Co.8x 1. 17% 11% 8% 5% 4% 6% 10% 4% <1% <1% Fund* 17% 14% 14% 12% 11% 7% 5% 5% 4% 4% P/E (Est.300 378 1.) This FY n/a n/a 18x 13x 19x 13x 43x 93x n/a 13x Next FY n/a n/a 12x 8x 11x 13x 17x 23x n/a 10x Price/ Tang.9x n/m .05 ∆ from Dec.0x .39 10. © 2008-2012 by BeyondProxy LLC. holdings.71 2.) This FY n/a 18x 13x n/a 13x 13x 12x 13x 19x 13x Next FY n/a 12x 20x n/a 11x 10x 10x 8x 11x 13x Price/ Tang. In 1998.187 Price Recent ($) 5.187 162 240 124 224 Price Recent ($) 10.069 2.05 12.724 2.1x . 5% 17% 11% 4% <1% <1% 2% <1% <1% 6% Fund* 12% 17% 14% 5% 4% 4% 1% 1% 0% 7% P/E (Est.08 5.S. 30 14% 35% 13% -1% 19% 5% 30% 12% 36% 15% Shares Owned Recent (‘000) 6.508 1.63 8.76 6.9x .80 12. working at Smith Barney. certain non-U.508 1.60 13.4x 1.17 19.366 ∆ from Sep. PaineWebber and Donaldson Lufkin & Jenrette.9x 1.manualofideas.069 2.com March 2012 – Page 59 of 169 .300 378 ∆ from Sep. Alliance Banc / WAL Portfolio Metrics Portfolio size * Sector Weightings $206 million 92% $269 million $399 million 13x 11x 1. 30 -1% 14% 35% 12% 36% 15% 13% 16% 18% 5% Shares Owned Recent (‘000) 2. / BANR NewStar Financial / NEWS Citizens Republic / CRBC CoBiz Financial / COBZ Mercantile Bank / MBWM Bancorp / TBBK Synovus Financial / SNV Sterling Financial / STSA New Positions Suffolk Bancorp / SUBK Sold Out Positions West.434 6.8x .92 19.8x 1. he joined Julian Robertson’s Tiger Management. 30 15% 7% -5% 16% -36% -17% -2% 18% 30% 0% Holdings as % of Co.9x 1. He struck out on his own two years later.0x * Basic Materials Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 100% Based on equity holdings disclosed in 13F-HR filings with the SEC.60 13. Book . All rights reserved.233 4.15 ∆ from Dec.158 1.92 19.158 1.233 4.08 13. Book n/m .10 1.Value-oriented Equity Investment Ideas for Sophisticated Investors Second Curve (Tom Brown) Tom Brown was a sell-side analyst focused on the financial services industry in the 1980s and 1990s. SUBSCRIBE TODAY! www. founding Second Curve Capital.434 1. Excludes portfolio cash.3x .3x 1.4x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Primus Guaranty / PRSG Taylor Capital / TAYC Banner Corp.366 830 1.17 8.54 6.1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker NewStar Financial / NEWS Primus Guaranty / PRSG Taylor Capital / TAYC Bancorp / TBBK Synovus Financial / SNV Sterling Financial / STSA Seacoast Banking / SBCF Sun Bancorp NJ / SNBC Suffolk Bancorp / SUBK CoBiz Financial / COBZ Top Holdings of Second Curve – By Dollar Value Market Value ($mn) 197 269 334 499 545 224 109 269 1.

30 17% >100% 31% 5% 8% 76% 12% 10% 24% 8% Holdings as % of Co.983 19.422 87.4x 5.256 33.22 21.16 ∆ from Dec.699 24. including $13 billion in separately managed accounts. The firm has $22 billion of assets under management.146 5.728 937 3.392 1.511 10.636 31.740 22.511 2.320 18.1x >9. 30 -22% 24% 11% 9% 16% 22% -3% 0% 16% 9% Shares Owned Recent (‘000) 17. Book .111 32.7x Capital Goods 13% Other 28% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 35% Based on equity holdings disclosed in 13F-HR filings with the SEC.560 40.949 18. / L DIRECTV / DTV Walt Disney / DIS FedEx / FDX Aon / AON Travelers / TRV Liberty Interactive / LINTA New Positions None Sold Out Positions Fair Isaac / FICO News Corp.1x .Value-oriented Equity Investment Ideas for Sophisticated Investors Southeastern (Mason Hawkins) Mason Hawkins is chairman and CEO of Southeastern Asset Management.361 Price Recent ($) 5.S.) This FY 8x 8x n/m 12x 13x 14x 15x 14x 10x 25x Next FY 9x 11x n/m 12x 10x 12x 13x 12x 10x 18x Price/ Tang.555 15.2x n/m 1. Southeastern serves as investment adviser to the Longleaf Partners Funds.6x . MOI Signal Rank™ – Top Current Ideas of Southeastern Market Value ($mn) 894 4.985 37.071 53. a firm he founded in 1975.38 31.888 14.42 38.51 41.8x n/m 1.961 15.837 34. 30 -3% -1% -1% -2% -9% -1% 4% -1% 10% -3% Holdings as % of Co. Garden / MSG Top Holdings of Southeastern – By Dollar Value Market Value ($mn) 31.815 8.590 8.93 5.123 11.56 59. 10% 19% 11% 29% 13% 7% 9% 4% 9% 8% Fund* 0% 4% 1% 1% 2% 2% 1% 4% 1% 1% P/E (Est.com March 2012 – Page 60 of 169 .6 billion $21 billion 14x 13x 1.5x 1. 8% 13% 17% 9% 4% 2% 4% 7% 4% 9% Fund* 10% 8% 6% 6% 6% 6% 5% 5% 4% 4% P/E (Est.10 45.071 8.5x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Quicksilver Resource / KWK Level 3 Comms / LVLT Saks / SKS Texas Industries / TXI Martin Marietta / MLM InterContinental H. 30 21% -1% 56% 1% 6% 11% 14% 4% 0% 12% Shares Owned Recent (‘000) 141.13 8.45 95.15 10.032 24.21 59.941 ∆ from Sep.75 22.293 29.111 74.38 18.15 ∆ from Dec. certain non-U.81 33.27 48.80 31.2x n/m 1 2 3 4 5 6 7 8 9 10 Company / Ticker Dell / DELL Chesapeake Energy / CHK Cemex / CX Loews Corp.9x 2. Excludes portfolio cash. and non-equity securities. holdings.9x n/m 1.013 17.59 87.manualofideas.20 21. Financial 24% © 2008-2012 by BeyondProxy LLC.2x n/m 9.423 2.391 174. All rights reserved.770 ∆ from Sep. SUBSCRIBE TODAY! www. / IHG Wendy’s Arby’s / WEN Travelers / TRV Lamar Advertising / LAMR Madison Sq.985 6.194 5. / NWSA Telephone & Data / TDS * Portfolio Metrics Portfolio size Sector Weightings $24 billion 60% $6.9x 1.956 2.) This FY 44x n/m 28x n/m 35x 18x 29x 10x >99x 33x Next FY n/m n/m 22x n/m 26x 17x 22x 10x >99x 25x Price/ Tang. a family of value-oriented mutual funds.717 Price Recent ($) 17.8x n/m >9. leverage. Book >9.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 12,716 9,365 11,714 40,374 5,998 135 10,717 15,103 14,685 10,589 Price Recent ($) 28.50 16.05 19.80 53.75 42.54 8.88 18.16 74.19 34.32 85.15 ∆ from Dec. 30 0% 16% 5% 31% 16% 36% 12% 8% -1% 9% Shares Owned Recent (‘000) 4,000 10,000 7,800 1,900 2,100 1,700 3,000 1,300 500 500 ∆ from Sep. 30 new new 15% 58% new 0% 50% 18% new new Holdings as % of Co. <1% 2% 1% <1% 1% 11% <1% <1% <1% <1% Fund* 7% 10% 10% 7% 6% 1% 4% 6% 1% 3% P/E (Est.) This FY 9x 13x 21x 14x 24x 8x 25x 24x 9x 33x Next FY 11x 14x 19x 12x 13x 6x 18x 21x 8x 51x Price/ Tang. Book n/m 3.3x >9.9x 8.4x 2.0x n/m n/m n/m 3.1x 2.6x

1 2 3 4 5 6 7 8 9 10

Company / Ticker DISH Network / DISH Marvell Technology / MRVL Sara Lee / SLE Gilead Sciences / GILD Plains Exploration / PXP Xerium Technologies / XRM Liberty Interactive / LINTA Mead Johnson / MJN YPF S.A. / YPF Liberty Media / LMCA

Top Holdings of Third Point – By Dollar Value
Market Value ($mn) 9,365 11,714 20,961 12,716 40,374 15,103 5,998 4,188 5,466 10,717 Price Recent ($) 16.05 19.80 27.18 28.50 53.75 74.19 42.54 39.21 18.88 18.16 ∆ from Dec. 30 16% 5% 2% 0% 31% 8% 16% 15% 17% 12% Shares Owned Recent (‘000) 10,000 7,800 5,550 4,000 1,900 1,300 2,100 1,820 3,050 3,000 ∆ from Sep. 30 new 15% -21% new 58% 18% new -4% -13% 50% Holdings as % of Co. 2% 1% <1% <1% <1% <1% 1% 2% 1% <1% Fund* 10% 10% 10% 7% 7% 6% 6% 5% 4% 4% P/E (Est.) This FY 13x 21x 26x 9x 14x 24x 24x n/m 11x 25x Next FY 14x 19x 22x 11x 12x 21x 13x 28x 10x 18x Price/ Tang. Book 3.3x >9.9x 4.8x n/m 8.4x n/m 2.0x 3.2x n/m n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Marvell Technology / MRVL Sara Lee / SLE El Paso Corp. / EP DISH Network / DISH Gilead Sciences / GILD Mead Johnson / MJN Plains Exploration / PXP Sunoco / SUN Newell Rubbermaid / NWL Liberty Interactive / LINTA

New Positions
DISH Network / DISH E*Trade Financial / ETFC Genworth Financial / GNW Goldman Sachs / GS Liberty Media / LMCA Marvell Technology / MRVL MEMC Electronic / WFR MGIC Investment / MTG Plains Exploration / PXP Potash / POT Skyworks Solutions / SWKS WPX Energy / WPX YPF S.A. / YPF

Sold Out Positions
Mindray Medical / MR AGCO Corp. / AGCO CVR Energy / CVI eBay / EBAY Emmis Comms / EMMS Ligand Pharma / LGND Mosaic Company / MOS Royal Bank Scotland / RBS Warnaco Group / WRC

Portfolio Metrics
Portfolio size

*

Sector Weightings
$1.6 billion 68% $5.7 billion $12 billion 13x 12x 2.6x
Other 42%

*

Services 24%

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Technology 16%

Energy 17%

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.

© 2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 – Page 61 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 197,003 27,134 871 13,172 2,023 49,200 92,635 10,589 50,284 1,745 Price Recent ($) 605.91 545.04 23.46 48.55 43.50 140.76 113.90 85.15 396.14 56.40 ∆ from Dec. 30 -6% 17% -2% 18% -1% 21% 12% 9% 6% 24% Shares Owned Recent (‘000) 725 1,313 7,185 13,639 1,000 2,387 3,003 1,908 771 1,500 ∆ from Sep. 30 >100% >100% 0% 4% 100% 31% 11% >100% 0% new Holdings as % of Co. <1% 3% 19% 5% 2% <1% <1% 2% <1% 5% Fund* 7% 11% 3% 11% 1% 5% 5% 3% 5% 1% P/E (Est.) This FY 14x 24x n/a n/m 19x 48x 19x 33x 18x 14x Next FY 12x 18x n/a 32x 15x 31x 16x 51x 15x 12x Price/ Tang. Book 4.0x >9.9x 8.7x n/m n/m >9.9x >9.9x 2.6x >9.9x 6.8x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Google / GOOG priceline.com / PCLN MakeMyTrip / MMYT Liberty Global / LBTYA Polypore International / PPO Baidu.com / BIDU Visa / V Liberty Media / LMCA MasterCard / MA Coinstar / CSTR

Top Holdings of Tiger Global – By Dollar Value
Market Value ($mn) 6,870 460,050 27,134 13,172 197,003 92,635 49,200 50,284 29,330 2,031 Price Recent ($) 21.27 493.42 545.04 48.55 605.91 113.90 140.76 396.14 54.25 10.72 ∆ from Dec. 30 8% 22% 17% 18% -6% 12% 21% 6% 2% 29% Shares Owned Recent (‘000) 53,024 1,620 1,313 13,639 725 3,003 2,387 771 5,215 16,616 ∆ from Sep. 30 -2% -29% >100% 4% >100% 11% 31% 0% -37% 6% Holdings as % of Co. 16% <1% 3% 5% <1% <1% <1% <1% <1% 9% Fund* 18% 13% 11% 11% 7% 5% 5% 5% 5% 3% P/E (Est.) This FY 36x 12x 24x n/m 14x 19x 48x 18x n/a n/m Next FY 26x 10x 18x 32x 12x 16x 31x 15x n/a n/m Price/ Tang. Book 8.1x 5.4x >9.9x n/m 4.0x >9.9x >9.9x >9.9x n/m n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Yandex / YNDX Apple / AAPL priceline.com / PCLN Liberty Global / LBTYA Google / GOOG Visa / V Baidu.com / BIDU MasterCard / MA Viacom / VIA Live Nation / LYV

New Positions
Axis Capital / AXS C&J Energy / CJES Coinstar / CSTR Endurance Specialty / ENH Everest Re / RE Harry Winston / HWD hhgregg / HGG Michael Kors / KORS Ubiquiti Networks / UBNT Validus / VR

Sold Out Positions
21Vianet Group / VNET Adobe Systems / ADBE Alaska Comms / ALSK Cablevision / CVC China Dangdang / DANG Coca-Cola Enterprise / CCE Cumulus Media / CMLS Northern Oil & Gas / NOG OpenTable / OPEN Sears Holdings / SHLD SINA Corp. / SINA SouFun Holdings / SFUN Youku / YOKU

Portfolio Metrics
Portfolio size

*

Sector Weightings
$6.3 billion 83% $4.1 billion $27 billion 18x 15x 2.9x
Services 31% Financial 11%

*

Other 2%

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Technology 56%

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.

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March 2012 – Page 62 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 15,905 15,430 14,310 8,207 8,534 5,861 6,776 11,714 8,774 3,879 Price Recent ($) 32.21 47.40 47.91 95.67 38.44 17.87 39.04 19.80 59.03 17.70 ∆ from Dec. 30 14% 2% 3% 12% 14% 17% 1% 5% 7% 11% Shares Owned Recent (‘000) 24,621 24,001 15,095 5,873 16,577 21,254 8,578 20,405 9,342 12,583 ∆ from Sep. 30 47% 0% 0% 0% 0% >100% 0% 0% 0% 0% Holdings as % of Co. 5% 7% 5% 7% 7% 6% 5% 3% 6% 6% Fund* 13% 18% 12% 9% 10% 6% 5% 6% 9% 4% P/E (Est.) This FY 13x 16x n/a 14x 15x 14x 14x 21x 13x 16x Next FY 12x 14x n/a 14x 13x 12x 13x 19x 12x 12x Price/ Tang. Book >9.9x 4.1x n/m >9.9x n/m n/m n/m >9.9x >9.9x 2.7x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Adobe Systems / ADBE Motorola Solutions / MSI Valeant Pharma / VRX C.R. Bard / BCR Moody’s / MCO CB Richard Ellis / CBG Willis Group / WSH Sara Lee / SLE Rockwell Collins / COL Fidelity National / FNF

Top Holdings of ValueAct – By Dollar Value
Market Value ($mn) 15,430 15,905 14,310 8,534 8,207 8,774 5,823 11,714 5,861 6,776 Price Recent ($) 47.40 32.21 47.91 38.44 95.67 59.03 36.61 19.80 17.87 39.04 ∆ from Dec. 30 2% 14% 3% 14% 12% 7% 2% 5% 17% 1% Shares Owned Recent (‘000) 24,001 24,621 15,095 16,577 5,873 9,342 11,767 20,405 21,254 8,578 ∆ from Sep. 30 0% 47% 0% 0% 0% 0% -8% 0% >100% 0% Holdings as % of Co. 7% 5% 5% 7% 7% 6% 7% 3% 6% 5% Fund* 18% 13% 12% 10% 9% 9% 7% 6% 6% 5% P/E (Est.) This FY 16x 13x n/a 15x 14x 13x 19x 21x 14x 14x Next FY 14x 12x n/a 13x 14x 12x 16x 19x 12x 13x Price/ Tang. Book 4.1x >9.9x n/m n/m >9.9x >9.9x n/m >9.9x n/m n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Motorola Solutions / MSI Adobe Systems / ADBE Valeant Pharma / VRX Moody’s / MCO C.R. Bard / BCR Rockwell Collins / COL Verisign / VRSN Sara Lee / SLE CB Richard Ellis / CBG Willis Group / WSH

New Positions
None

Sold Out Positions
Gartner / IT World Fuel Services / INT
*

Portfolio Metrics
Portfolio size

Sector Weightings
$6.2 billion 96% $6.3 billion $7.2 billion 15x 13x 4.0x
Technology 20% Other 33%

*

Capital Goods 27%

Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Health Care 21%

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.

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March 2012 – Page 63 of 169

36 11. SUBSCRIBE TODAY! www.107 1.5x Financial 11% Other 30% Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Services 39% Based on equity holdings disclosed in 13F-HR filings with the SEC.90 8.75 33.721 14.55 30.70 47.704 7.2x 2.91 87. The firm has since grown into a $2 billion asset manager best known for the Weitz Value Fund.0x 4.577 10.3 billion 42% $9.20 ∆ from Dec.” founded Wallace R.172 255.8x n/m n/m 6. Technology 20% © 2008-2012 by BeyondProxy LLC.883 251 913 756 40. <1% 1% <1% <1% <1% <1% <1% 10% <1% 2% Fund* 5% 5% 5% 5% 5% 4% 4% 4% 4% 3% P/E (Est. and non-equity securities. Book 1. MOI Signal Rank™ – Top Current Ideas of Weitz Market Value ($mn) 15 3.8x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Intelligent Systems / INS FLIR Systems / FLIR XO Group / XOXO Redwood Trust / RWT National CineMedia / NCMI Apache / APA Hewlett-Packard / HPQ Valeant Pharma / VRX SandRidge Energy / SD Coinstar / CSTR Top Holdings of Weitz – By Dollar Value Market Value ($mn) 159. in 1983 with $10 million under management.6x n/m n/m 1.26 18. leverage.0x n/m 1.60 605.46 56. 30 10% 12% 18% 17% 4% 21% 15% 14% -6% 16% Shares Owned Recent (‘000) 3.1x n/m >9.56 17. 30 0% >100% 5% 10% 91% >100% 67% 36% 12% 70% Holdings as % of Co.16 48.003 3.8x 6.119 913 197.com March 2012 – Page 64 of 169 .1x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Wells Fargo / WFC Liberty Interactive / LINTA Liberty Global / LBTYA Microsoft / MSFT Aon / AON Dell / DELL Texas Instruments / TXN Redwood Trust / RWT Google / GOOG Martin Marietta / MLM New Positions Avon Products / AVP Oracle / ORCL Sold Out Positions American Eagle / AEO Devon Energy / DVN EOG Resources / EOG Kennedy-Wilson / KW Liberty Starz / LSTZA Procter & Gamble / PG * * Skechers / SKX Strayer Education / STRA Viacom / VIA Vulcan Materials / VMC Washington Post / WPO Portfolio Metrics Portfolio size Sector Weightings $2.350 1.177 3.131 5.9x 1. All rights reserved.877 15.484 1.40 ∆ from Dec.77 11.034 2.985 Price Recent ($) 30.9x >9.201 462 ∆ from Sep.745 Price Recent ($) 1.) This FY 9x 25x n/m 11x 14x 8x 18x 22x 14x 35x Next FY 8x 18x 32x 10x 12x 9x 14x 12x 12x 26x Price/ Tang.121 2.3x 1.0x 5. Excludes portfolio cash.888 38.687 223 1. 25% <1% 9% 10% 3% <1% <1% <1% 2% 1% Fund* 0% 1% 1% 4% 1% 1% 2% 3% 3% 1% P/E (Est.64 24.699 31.13 28.520 7.376 56.484 132 853 ∆ from Sep.717 13.70 105.91 7.S. Book 2.270 591 2.manualofideas.5x 4.Value-oriented Equity Investment Ideas for Sophisticated Investors Weitz Funds (Wally Weitz) Wally Weitz.8 billion $37 billion 14x 13x 2.405 8. Weitz & Co. 30 0% -2% -3% -15% -10% -13% -12% 10% -8% -5% Holdings as % of Co. certain non-U. 30 2% -1% 5% 14% 10% 16% 11% 3% -9% 24% Shares Owned Recent (‘000) 2.772 6.50 48.60 13.) This FY n/a 18x 58x 22x 23x 9x 7x n/a n/m 14x Next FY n/a 15x 32x 12x 23x 9x 6x n/a >99x 12x Price/ Tang. holdings. sometimes called “The Other Oracle of Omaha.429 2.310 3.

) This FY 12x 11x 14x 17x n/m 13x 17x 17x 20x 12x Next FY 12x 10x 13x 15x n/m 12x 15x 15x 18x 15x Price/ Tang.58 67.349 170 28.081 26. 30 -1% 3% 6% -1% -8% 4% -3% -1% 0% 0% Shares Owned Recent (‘000) 1 96 6 185 96 960 89 82 109 66 ∆ from Sep.S. SUBSCRIBE TODAY! www.45 10. Excludes portfolio cash. West Coast invests in undervalued equities and follows a concentrated investment approach.5x n/m n/m >9. holdings.28 38.75 54.01 ∆ from Dec.3x 1.9x 1. certain non-U.161 36. and non-equity securities. Orfalea is the founder of Kinko’s copy shops.17 30.031 176.58 48.9x 6.com March 2012 – Page 65 of 169 . 30 -1% 17% -3% 0% 29% -1% 3% 2% 0% -8% Shares Owned Recent (‘000) 185 214 89 109 496 82 96 53 66 96 ∆ from Sep.) This FY 8x 17x 26x 12x 12x n/a 14x 13x 17x 20x Next FY 8x 15x 22x 12x 15x n/a 13x 12x 15x 18x Price/ Tang.824 7.45 54.60 38.9x n/m n/m 6.1x >9. previously oversaw a $1 billion portfolio at Wilshire Associates. 30 0% -5% 0% -18% -40% -18% -40% -45% -42% -45% Holdings as % of Co. Book 4.349 Price Recent ($) 43.46 2.56 50.496 Price Recent ($) 105.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Chevron / CVX Kraft Foods / KFT Starbucks / SBUX Molson Coors / TAP Constellation Energy / CEG Sonde Resources / SOQ Kimberly-Clark / KMB Johnson & Johnson / JNJ McCormick / MKC Automatic Data / ADP Top Holdings of West Coast Asset Management – By Dollar Value Market Value ($mn) 7.0x 1. Book 1. 30 -18% -23% -40% -42% -2% -45% -5% -42% -45% -40% Holdings as % of Co.413 6. who directs the firm’s investments.496 7. <1% <1% <1% <1% <1% 2% <1% <1% <1% <1% Fund* 0% 6% 0% 14% 6% 5% 11% 9% 10% 6% P/E (Est.manualofideas.877 28.824 255. MOI Signal Rank™ – Top Current Ideas of West Coast Asset Management Market Value ($mn) 209.71 71.202 176.5x n/m >9. Helfert.17 36.664 68.413 68.01 36. leverage.202 6.60 50.72 64. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 14% 11% 11% 10% 9% 9% 6% 6% 6% 6% P/E (Est.3x Technology 12% Other 27% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Consumer NonCyclical 39% Based on equity holdings disclosed in 13F-HR filings with the SEC.0x >9.5x 4.Value-oriented Equity Investment Ideas for Sophisticated Investors West Coast (Lance Helfert and Paul Orfalea) Lace Helfert and Paul Orfalea co-founded West Coast Asset Management in 2000.8x n/m 8.46 ∆ from Dec. All rights reserved. Services 22% © 2008-2012 by BeyondProxy LLC.081 2.3x 6.0x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Molson Coors / TAP Microsoft / MSFT Kimberly-Clark / KMB McCormick / MKC Live Nation / LYV Johnson & Johnson / JNJ Kraft Foods / KFT Clorox / CLX Automatic Data / ADP Constellation Energy / CEG New Positions None Sold Out Positions None * Portfolio Metrics Portfolio size Sector Weightings $57 million 90% $18 billion $60 billion 15x 14x 4.781 7.161 8.56 64.50 71.82 43.794 26.

6x >9.90 67.723 41.723 25. and non-equity securities.145 197.417 948 581 1 160 1.10 396.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Philip Morris / PM Canadian Natural / CNQ Berkshire Hathaway / BRK.071 50.0x >9.A MasterCard / MA Reynolds American / RAI Consolidated-Tomoka / CTO Coca-Cola / KO Google / GOOG Coca-Cola FEMSA / KOF New Positions Wynn Resorts / WYNN Sold Out Positions None Portfolio Metrics Portfolio size * Sector Weightings $600 million 91% $33 billion $70 billion 17x 15x 3.44 116.74 30.003 23.90 113.072 Price Recent ($) 37.94 605.305 194. a mutual fund that follows an active.903 25.53 ∆ from Dec.308 Price Recent ($) 80.003 4.165 180 154. value-oriented investment approach.6x 5. Consumer NonCyclical 31% © 2008-2012 by BeyondProxy LLC.543 78 38 1. MOI Signal Rank™ – Top Current Ideas of Wintergreen Advisers Market Value ($mn) 139.0x n/m >9. Excludes portfolio cash.284 23.484 476 ∆ from Sep. <1% <1% <1% <1% <1% 26% <1% <1% <1% <1% Fund* 13% 15% 11% 11% 11% 8% 1% 4% 10% 5% P/E (Est.66 80. 30 2% 1% 3% 21% 6% 14% 2% -6% -4% -3% Shares Owned Recent (‘000) 948 2.) This FY 17x 17x 17x 13x 18x n/a 20x 14x 13x 17x Next FY 15x 11x 15x 12x 15x n/a 18x 12x 12x 15x Price/ Tang.0x 4.9x 4.165 154.) This FY 17x 17x 13x 17x 18x 13x n/a 17x 14x 26x Next FY 11x 15x 12x 15x 15x 12x n/a 15x 12x 22x Price/ Tang.44 37.14 39.9x n/m 4.91 39.74 67.903 50.308 197.543 476 38 193 ∆ from Sep.484 1. 30 0% 2% 10% 0% 0% 0% 0% 0% 0% 0% Holdings as % of Co.00 116. Winters became president and CIO of Mutual Series in 2001. leverage.manualofideas.284 180 14. <1% <1% <1% <1% <1% <1% 26% <1% <1% <1% Fund* 15% 13% 11% 11% 11% 10% 8% 5% 4% 3% P/E (Est.10 117.9x 1.7x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Canadian Natural / CNQ Philip Morris / PM Franklin Resources / BEN Berkshire Hathaway / BRK.com March 2012 – Page 66 of 169 . All rights reserved.417 1 581 160 1.071 194. certain non-U.1x >9.9x 2. 30 2% 0% 0% 10% 0% 0% new 0% 0% 0% Holdings as % of Co.980. SUBSCRIBE TODAY! www.2x Energy 15% Other 21% * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Financial 33% Based on equity holdings disclosed in 13F-HR filings with the SEC.20 605.0x .Value-oriented Equity Investment Ideas for Sophisticated Investors Wintergreen (David Winters) David Winters joined Mutual Series in 1987 and was mentored by famed value investor Michael Price. He left in 2005 to form Wintergreen Advisers and manage the Wintergreen Fund.6x 4.1x 2.980. Book n/m 1.9x n/m 1.305 139. Book 1. holdings.66 117. 30 1% 2% 21% 3% 6% -4% 14% -3% -6% 5% Shares Owned Recent (‘000) 2.94 ∆ from Dec.00 396.S.A Franklin Resources / BEN MasterCard / MA Consolidated-Tomoka / CTO Wynn Resorts / WYNN Google / GOOG Reynolds American / RAI Coca-Cola / KO Top Holdings of Wintergreen Advisers – By Dollar Value Market Value ($mn) 41.14 30.91 99.

469 348 206 152 ∆ from Sep.54 ∆ from Dec. (Wilbur Ross) Wilbur Ross.545 3. has become well-known for restructuring failed companies in a variety of industries.7x . MOI Signal Rank™ – Top Current Ideas of WL Ross & Co.221 1.2 billion $2. Excludes portfolio cash.7x 1.27 5.514 2.579 Price Recent ($) 7.80 5.221 2.469 21. SUBSCRIBE TODAY! www.1x >9. He has been a leveraged buyout and distressed investor in steel.35 22.73 15.603 3.250 11. 13% 10% 14% 4% 11% 25% 24% <1% <1% <1% Fund* 12% 32% 19% 6% 21% 4% 4% 0% 0% 0% P/E (Est.835 21.4x * Top 10 as % of portfolio Median market value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book * Transportation 7% Energy 12% Financial 80% Based on equity holdings disclosed in 13F-HR filings with the SEC.7 billion 100% $2. financial and other companies.9x 1. Market Value ($mn) 1.83 7.27 17.848 2.54 ∆ from Dec.93 26.73 26.50 2.80 23.220 992 2.1x 2. Book .2x .189 2. Book 1.05 7.05 25.0x 1.7x . certain non-U. All rights reserved.8x 5.2x >9.manualofideas.75 14.35 17.333 19. holdings. 10% 11% 14% 13% 4% 24% 25% <1% <1% <1% Fund* 32% 21% 19% 12% 6% 4% 4% 1% 0% 0% P/E (Est. leverage.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker Bank of Ireland / IRE Assured Guaranty / AGO BankUnited / BKU EXCO Resources / XCO Air Lease / AL Cascade Bancorp / CACB Sun Bancorp NJ / SNBC United Continental / UAL Key Energy Services / KEG Hanesbrands / HBI New Positions Bank of Ireland / IRE Sold Out Positions Buffalo Wild Wings / BWLD Cincinnati Bell / CBB Manitowoc / MTW * Portfolio Metrics Portfolio size Sector Weightings $1.279 11.5x 1.279 370 348 152 ∆ from Sep.426 4.com March 2012 – Page 67 of 169 . telecom. coal.83 25.86 14.579 Price Recent ($) 7.2x 1.189 240 277 2.333 13.S. © 2008-2012 by BeyondProxy LLC. 30 new 14% 0% 3% 0% 0% 0% -18% -5% -13% Holdings as % of Co.7 billion 13x 11x 1.0x .545 277 240 7.426 73. and non-equity securities.603 2.9x 1 2 3 4 5 6 7 8 9 10 Company / Ticker EXCO Resources / XCO Bank of Ireland / IRE BankUnited / BKU Air Lease / AL Assured Guaranty / AGO Sun Bancorp NJ / SNBC Cascade Bancorp / CACB Key Energy Services / KEG Cooper Tire & Rubber / CTB Hanesbrands / HBI Top Holdings of WL Ross & Co.5x 1.8x .) This FY n/a 6x 13x 11x 46x n/m 93x 5x 16x 10x Next FY n/a 6x 14x 15x 19x n/m 23x 4x 9x 9x Price/ Tang.250 19.86 2.721 4. 30 -33% 73% 4% 7% 33% 16% 34% -5% 14% 21% Shares Owned Recent (‘000) 28.835 13. 30 3% new 0% 0% 14% 0% 0% -5% -22% -13% Holdings as % of Co.Value-oriented Equity Investment Ideas for Sophisticated Investors WL Ross & Co. born in 1937.721 28.) This FY 11x n/a 13x 46x 6x 93x n/m 16x 13x 10x Next FY 15x n/a 14x 19x 6x 23x n/m 9x 9x 9x Price/ Tang.9x n/m 5. 30 73% 33% 4% -33% 7% 34% 16% 26% -5% 21% Shares Owned Recent (‘000) 73.50 22.220 2.514 5.7x 1. – By Dollar Value Market Value ($mn) 5.

5 million Ownership Data Insider ownership: 2% Insider buys (last six months): 7 Insider sales (last six months): 4 Institutional ownership: 83% SPOKANE WA.5x This quarter Next quarter FYE 12/31/12 FYE 12/31/13 FYE 12/31/14 LT growth EPS Surprise 2/8/12 Operating Performance and Financial Position ($ millions.com March 2012 – Page 68 of 169 .0% 44.2% 5.06 0.24 20 19 19 16 25 16 19 5 6 -3 20 10 83.9% 13.46 0. 2007 2008 2009 115 98 99 96 79 84 42 25 30 31 19 20 1.60 LTME 12/31/11 66 59 2 3 0.1% 79 86 28 129 116 41 0 43 73 63% 3.45 (as of 2/24/12) 52-week range: $3.4% 59 74 26 114 101 35 0 37 64 63% 3.0% 81 88 29 128 118 36 0 37 81 69% 4.42 0.69 0. All rights reserved. except per share data) Revenue Gross profit Adjusted operating income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations Capex Free cash flow … % of revenue: Gross profit Adjusted operating income Capex Cash.65 Ten-Year Stock Price Performance and Trading Volume Dynamics $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.23 n/a n/a Month Ago -$0.9% 3.18 n/a n/a Actual -$0.10 0.0% 35.09 Fiscal Years Ended December 31. net Total assets Tangible assets Current liabilities Debt Total liabilities Tangible equity TBV / tangible assets TBV per share 2005 69 67 31 22 1.25 2010 76 66 10 8 0.3% 117 119 5 125 125 58 1 59 67 53% 3.2% 5.1% 7.88–$11.24 18 -7 4 -10 88. 509-568-7901 Consensus EPS Estimates Latest -$0.9% 85 93 28 122 122 49 0 49 72 59% 3.17 0.24 18 -7 4 -10 88.9% 5.4% 7.17 0.49 0. SUBSCRIBE TODAY! www.9% 79 86 28 129 116 41 0 43 73 63% 3.02 85.45 0.8% 36.0% -560.17 0.5% 16.8% 22.3% 133 140 12 154 154 70 0 70 84 55% 4.06 19 13 1 12 91.45 # of Ests 1 1 1 1 n/a n/a Estimate -$0.Value-oriented Equity Investment Ideas for Sophisticated Investors Profiling 20 Superinvestor Holdings Ambassadors Group (EPAX) – Lane Five  Services: Personal Services Trading Data Price: $5.96 1.9% 3.86 FQE 12/31/11 2 2 -11 -8 -0.75 0.3% 3.69 80.09 0.ambassadorsgroup.48 0.6% 6.3% 74 83 29 124 115 55 0 57 58 50% 3.37 21 37 7 31 87.manualofideas.com Valuation P/E FYE 1/1/12 P/E FYE 12/31/12 P/E FYE 12/31/13 P/E FYE 12/31/14 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 6% n/m 32x 32x 24x n/a 0.65 FQE 12/31/10 5 4 -11 -7 -0.46 0.27 2006 89 78 34 27 1.24 19 22 5 16 86.06 17 8 1 7 95.6% 25.1% 38.58 0.0% 59 74 26 114 101 35 0 37 64 63% 3.45 www.4% 59 74 26 114 101 35 0 37 64 63% 3.82 2011 66 59 2 3 0.7% -218.11 Market value: $95 million Enterprise value: $37 million Shares outstanding: 17.0% 30.6x 17x 1.35 0.30 0. investments Total current assets PP&E.28 20 38 2 36 96.

4 1.46 40% -6% 2008 229 -17% 41. Recent profitability has been pressured by revenue declines and high opex.56 in 2000 to $1. reflecting travel decisions made in 2011. CATALYSTS • Management forecasts a decline in revenues to $135-145 million in 2012 with net income of $3-5 million. 45 years of travel experience.95 0.6 million and no debt as of 12/31/2011 provide downside protection. • Strong results prior to latest recession. Bookings were slow to recover after the 2001 recession but growth accelerated rapidly after 2003. 3 2007 capex of $19. INVESTMENT HIGHLIGHTS • Competitive edge due to association with People to People. Similar dynamics may be at work currently due to the long lead time required to generate travel bookings.2 -18% 19% 7% 2% 3% 41% 15% 10% 5% 57% 19% 20% 4% 6% 58% 2% 23% 8% 5. • Opex control has been lacking. assuming enrollment eventually returns to the 40-50.3 million was paid in cash with the balance paid via issuance of 233.3 million included $12. The company also benefits from the perception that its programs improve students’ chance of admission to top colleges. The company has a strong balance sheet and should benefit from a recovery.24 26% 1% 2010 162 -20% 26.9 -10% 26% 11% 3% 2% 38% 1% 2% -6% n/a n/a n/a n/a 17% 35% 12% 23% 12% 6.1 Gross margin per delegate 1. As of Feb.24 4% -4% Includes gross revenue from non-directly delivered programs. Net income per share grew from $0. The market may not fully appreciate the fact that economic strength this year will not be fully apparent until 2013 bookings are made in late 2012.55 in 2007 and enrolled delegates more than doubled. State Department. Ambassadors Group has exclusive rights to develop student programs for kindergarten through high school students through 2020 and non-exclusive rights to develop other programs using the People to People brand.2 1. plant.S.6 1. Therefore. 5 Substantially all of the goodwill is related to 2008 acquisition of BookRags for $12.584 shares valued at $2.1 Change (y-y) 14% Selected items as % of revenue1: Sales & marketing 14% General & administrative 5% Depreciation 1% Capex 3 3% Gross margin 35% Operating income 16% Net income 12% Free cash flow 4 14% % of revenue by travel destination: Europe 49% South Pacific 29% Asia (primarily China) 14% Other 8% Selected items as % of total assets: Cash and equivalents 24% Securities 63% Prepaid program costs 2% Property and equipment 8% Intangibles and goodwill 5 0% Selected statistics ($’000): Revenue per delegate 5.3 1. Decline coincided with a severe recession. • Cash and securities of $58. 4 FCF = Cash from operations less purchase of property. and academic credit granted for the programs by high schools and colleges. but enrollment has continued to decline during the recovery.3 1. The current valuation appears to be giving little credit to recovery potential over the next two to three years.9 -20% 18% 5% 1% 2% 34% 11% 8% 9% 61% 16% 17% 6% 6% 56% 3% 23% 8% 5. 1 MAJOR HOLDERS Chairman Ueberroth 4% | CEO Thomas 4% | Other insiders 2% | Stadium Capital 8% | FMR 7% | Bandera 7% 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 Ambassadors has a long-term record of impressive growth and returns on capital.9 2.9 0.8 million for construction of new HQ. The company has operated the “People to People” travel programs since 1967. * Q4 2011 earnings release: http://bit. 2 Delegates are mostly student participants of Ambassador’s travel programs. enrolled revenue for 2012 programs was down 10.5-$5. All revenue.4 1.55 0.4 1.0 2. 8.24 9% -4% 2011 155 -4% 23. Management aims to cut expenses by $4.com March 2012 – Page 69 of 169 . SELECTED OPERATING DATA FYE December 31 2006 Revenue ($mn)1 219 Change (y-y) 22% Enrolled delegates2 (‘000) 43. People to People is a non-profit organization founded by President Eisenhower and originally administered by the U.8 Marketing spend/delegate6 0. of which $9.8 0.6 Diluted net income/share 1.25 Dividends per share 0.42 0.8 0. SUBSCRIBE TODAY! www. perceived increases in the risk of terrorism or war may decrease future enrollment. © 2008-2012 by BeyondProxy LLC. Renewal terms may have a large impact on equity value. percent of revenue. Improving economic conditions in 2012 will not be fully reflected in travel bookings until 2013.manualofideas.5 0. marketing spending in 2010 per delegate traveled in 2011).8 0. and equipment.3 million. and margin figures in the table are calculated based on total gross revenues including non-directly delivered programs.9 million.ly/wYBPqC We thank Ravi Nagarajan for his analysis of Ambassadors Group.05 0.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Ambassadors is an educational travel company focused on international travel for students.* Opex remains elevated as a percentage of revenue. All rights reserved. 6 Spending on marketing primarily generate business the following year. The company’s GAAP financial statements report revenue as net revenue from non-directly delivered programs plus revenue from directly delivered programs.5% from the same point in 2011*. It is worth noting that Ambassadors was slow to bounce back after the 2001 recession.5 million in 2012. • People to People deal expires in 2020. we track marketing spending per delegate traveled the next year (for example.37 Return on equity 35% 0% ∆ shares outstanding 2007 277 26% 52. Despite the company’s good reputation for safety.000 level that prevailed prior to the recession.46 27% -3% 2009 204 -11% 34. • Geopolitical risks. INVESTMENT RISKS & CONCERNS • 55% decline in participants since 2007.7 22% 14% 6% 1% 7% 35% 15% 11% 4% 57% 24% 14% 5% 14% 56% 3% 23% 0% 5.3 2.7 -22% 26% 8% 3% 3% 41% 6% 5% 11% 55% 24% 14% 7% 5% 57% 3% 21% 10% 6.17 0.

We assume some success in cost cutting over the next two years based on management’s guidance but have not assumed a return to 2001-2009 levels as a percentage of total gross revenues.000 20% 168.Consolidated gross margin as % of gross revenues of 36 to 38 percent .005 38.0% 36.com March 2012 – Page 70 of 169 .589 12 67.710 24.04 Ambassador Programs and Other: Based on 2/8/2012 press release. As a result.580 105.5 to $5. BookRags was acquired for $12.5 million.945 140. © 2008-2012 by BeyondProxy LLC.Ambassador Programs BookRags segment: Projected 2013 revenue Gross margin percentage Projected gross margin in 2013 . Sales and marketing spending was $40. Note that even the “aggressive” case projects revenues for 2013 only slightly higher than 2010 and well below 2009 revenue. Spending was $16.500 85.2013: Sales and marketing as percentage of total revenue Sales and marketing expenses General and administrative expense .50 as of 2/14/12) Implied valuation to tangible book at 12/31/11 Conservative Base Case Aggressive Valuation for the operating business is based on forecasted 2013 revenue and net earnings by business segment with various P/E multiples assigned.2013: Tax rate Net income .493 6.0% 13.89 -47% 0. The Manual of Ideas.064 38.500 37% 54. Tax Rate and Net Income: We do not include investment income in this calculation as we are attempting to evaluate the value of the operating business only and will add back deployable cash separately. accruals.79 9.201 10 12.2013: General and administrative as percentage of total revenue General and administrative expenses Operating income . We use a range from $130-$140 million for the Ambassador program given that guidance also includes revenue from BookRags.9 million in legal fees that should be non-recurring.0% 3.000 90.66 8.0 million in revenue for 2013 with margins between 85% and 90%.5-$4.580 50.04 10% 1.281 58.703 7. We assume revenue growth of 0 to 20% for 2013.000 0% 130.715 30% 1.Variable expenses to be cut by $4.088 14 155. General and Administrative Expense: General and administrative expense as a percentage of total gross revenues (direct and indirect) averaged 5% from 2001 to 2009 but climbed to 11% for 2011.840 10. 130. Management has not provided specific guidance for this segment and the estimate is approximate. Management’s guidance for 2012 from 2/8/2012 earnings release and Q4 2011 conference call: . and other liabilities.493 2.manualofideas. accounts payable. Valuation: We use an earnings multiple between 10 and 14 to arrive at an intrinsic value estimate for the operating business and then add back “deployable cash” as of 12/31/2011.540 22.0% 37.232 38.Consolidated gross revenues for all programs and operations between $135-$145 million.0% 34. Gross margin is between 36-38% based on management’s guidance for 2012. management is guiding for total revenues between $135-$145 million for all operations. All rights reserved.840 3.000 36% 46.840 30% 11.800 135.000 10% 148. The intent is to measure the cash available for investment opportunities.493 11.3 million on May 15.0% 13. Ravi Nagarajan analysis.5% 3.975 49. “Deployable Cash” is a non-GAAP metric defined by management as the sum of cash equivalents. This cash is theoretically available for distribution to shareholders.775 3.440 26. We add back “deployable cash” not used in the operating business.226 4. We do not assume a full return to 2001-2009 averages but anticipate spending to be at levels materially lower than 2011 and on par with 2010 levels.Value-oriented Equity Investment Ideas for Sophisticated Investors AMBASSADORS GROUP – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS (in thousands except per-share amounts) Valuation Methodology Ambassador Programs and other: Management’s 2012 revenue guidance (direct & indirect) Revenue growth in 2013 Projected revenue in 2013 (direct & indirect) Gross margin percentage Projected gross margin in 2013 .2013.600 67.BookRags Total gross margin . short term securities and pre-paid program costs less participants’ deposits. but net cut may be lower due to redirecting some of savings to restructure marketing initiatives.350 1.760 15.585 17.0% 13.2013 Earnings multiple Valuation of operating business excluding cash Plus “deployable cash” as of 12/31/2011 Valuation of Ambassadors Group Shares outstanding at 11/2/2011 Valuation per share Implied upside/downside to recent price ($5.750 87.000 38% 63.0% 2. both segments Sales and marketing expense . BookRags Segment: Projection of between $3.Net income before any special items between $3 million and $5 million .812 17.08 101% 3. Source: Company filings. assumptions and estimates.644 17. SUBSCRIBE TODAY! www.4 million in 2011. 2008.580 193. Sales and Marketing Expense: Sales and marketing expense as a percentage of total gross revenues (direct and indirect) averaged 16% from 2001 to 2009 before climbing to 26% in 2010 and 2011. . we assume a tax rate closer to the statutory rate compared to the actual rate in recent years which has been influenced by a large portfolio of municipal securities with tax exempt status.6 million in 2011 but this included $1.984 30% 5.

997) (2.956 8.952 (71) 155 (2.373) (16.086) (1. The Manual of Ideas.710) (7.154 10.200) (609) (4.461) 17.426 2.800 9.798 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Increase represents “accelerated payments made for airline costs related to 2012 travel program” 581 (10.639 BookRags acquisition: Total purchase price for -BookRags was $12.101) 49 (493) 30.385 (5.843) (10.515 (142) (5.138 (5.292) 28.989 568 428 (92) 962 (45) 985 (329) (13. other Participants’ deposits Net cash provided by operating activities Cash flows from investing activities: Purchase of available-for-sale securities Proceeds from available-for-sale securities Purchase and construction of PP&E Proceeds from sale of PP&E Purchase of intangibles Adjustments to goodwill Net cash paid for acquisition Net cash provided by investing activities Cash flows from financing activities: Contribution from parent company Dividend to parent company Repurchase of common stock Dividend payment to shareholders Proceeds from exercise of stock options Excess tax benefit from stock comp Capital lease payments and other Net cash provided by financing activities Net increase in cash equivalents Free cash flow: Cash flow from operating activities Less purchase of PP&E Adjustment for HQ building in 2007 Free cash flow FCF as a percentage of net income D&A as % of gross revenue (indirect & direct) Capex as % of gross revenue (indirect & direct) FCF as % of gross revenue (indirect & direct) (6.416) 9.923) (10.906 935 44 (33) (142) (92) 4.047 26.973 $140 million.801) 398 (134) (150) (18.995) 137.911) 25.493) 425 (9.042) 51 (207) (9.022 1.732 (5.752 115% 1% 3% 14% 37.639 (4.260 (17.716 (5.157) 10.399 1.138 3.320) 15.764 (4.707) 34 162 1.677 (41.100) 1.035 (3.584 shares worth $2.906 (1.797 (7.655) 68 (55) 223 3.057 (748) (2.447 2. All rights reserved.147 (13) 34 4.741) (5.207 (6.668) 12.868 (15.147) (533) (966) 1.255 (1.965 32% 1% 7% 4% 37.948 (19.981 54% 2% 3% 5% 24.255 775 157 52 (15) 265 9.443 24.692 22.647 10.590) (4.756) n/a 3% 2% -6% 21.185 159% 1% 1% 15% 21.296) (2.753 2.com March 2012 – Page 71 of 169 .259 10.070 2.940) 1.655) 1.337 18.$9.410 15.382 (200) 21.436 (19.181) (10.546 31.707 (189) (45.328 (178) (6. of which.732 2.178 212% 3% 3% 11% 16.156) (8.630) 1.084 (13.350 21.693) 83.157) 19 (726) (13) (11.911) (12.319 17.461) 253 (941) (4.042) 19.271) 12.969 2.139) (1.258) 227 160 (11.296) 35.3 million.116 20.9 million).503) (12.382 2.496 158% 1% 1% 20% 27.646 2.741) (818) (58.461) 12.455) 30.376) (25) (608) (2.271) 667 (138.995 166% 1% 1% 18% 17.400 (20.069) 194 (7.039) 52.150 1.480 441 4.928) 16. accrued expenses.061 1.182 196% 1% 0% 22% (48.070) 1.101) (9.681 (59.880 (20.690 106% 1% 2% 9% 16.716) (13.406) (4.040) (6.296) (19.207 1.532 1.855 37.388 27.376 (180) (14.4 million was paid in cash with the balance in stock (233.271) (6.616) (19.825) 1.468) (6.364 1.Value-oriented Equity Investment Ideas for Sophisticated Investors AMBASSADORS GROUP – CASH FLOW ANALYSIS.856 8.475 420 246 (160) 4.459 (200) 4.034 (25) 134 759 (1. SUBSCRIBE TODAY! www.070) 16.163) (8. Ravi Nagarajan analysis.792 962 45 894 110 (853) 713 10.175 455 130 (11) 57 865 3.742 1.331) 59.029) 16.069) (1.436 1.729) 3. 2002-2011 ($ in thousands) Cash flows from operating activities: Net Income Adjustments to reconcile net income to OCF: Depreciation and amortization Stock-based compensation Deferred income tax benefit Loss on disposition and impairment of PP&E Excess (shortfall) tax benefit from stock comp Loss on foreign currency contracts Equity in earnings on investment Change in assets and liabilities: Accounts receivable and other assets Prepaid program costs and expenses Accounts payable.455) (13.190) (230) 13.655) (3.299 21.188 37. or 79% of FCF.792 (2.581) 838 92 (11) (4.568) (4. © 2008-2012 by BeyondProxy LLC. There have been no other acquisitions over the past ten 9.manualofideas. returned to shareholders Source: Company filings.594) 700 (441) (17.592) (3.

00 Market value: $22.98 6.4% 3.80 0.2% 17.58 0.331 1.60 318 307 310 1.5 million Ownership Data Insider ownership: <1% Insider buys (last six months): 21 Insider sales (last six months): 14 Institutional ownership: 88% HOUSTON TX.1% 7.387 1.91 0.050 4.Value-oriented Equity Investment Ideas for Sophisticated Investors Baker Hughes (BHI) – Greenhaven  Energy: Oil Well Services & Equipment.529 1.303 1.662 43% 16.491 -635 22.15 1.731 224 3.230 1.706 3.833 10.9% 3.551 1.4% 1.326 15 1.02 50% 33.56 0.8% 1.76 5.356 6.831 4.60 394 856 1.42 23% FQE 12/31/11 5.21 54% Fiscal Years Ended December 31.96 (as of 2/24/12) 52-week range: $41.267 2.80 0.069 4.44 0.42 0.801 7.53 1.8% 1.2% Month Ago $1.48 339 955 478 477 30.414 3. Member of S&P 500 Trading Data Price: $51.8% 1.737 2.278 2.915 2.12 1.554 6.48 40% 2006 9.0% 2.567 2.942 2.com March 2012 – Page 72 of 169 .310 15.3% 14.0% 1.7% 2.074 3.518 2.6% 2.416 946 2.00 42% 23.567 2.7 billion Shares outstanding: 436.7% 1.4% 14.12 4.30 12% 2010 14.050 4.399 7.942 2.878 3.15 5.90 30.086 348 311 153 34.428 11.5% 4.60 436 1.878 3. net Tangible assets Short-term debt Long-term debt Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2005 7.161 9.52 0.775 57% 15.162 1.662 43% 15.706 52% 11.759 2.15 432 278 486 -208 22.594 6.415 17.671 58% 18.168 1 1.6% 21.8% 21.0% 2.438 750 2.08 5.731 224 3.52 331 590 922 -332 34.697 439 4.7% 1.731 224 3.5% 1.bakerhughes.415 17.219 51% 9.785 5.836 3.381 629 1.845 8.279 874 2.7 billion Enterprise value: $25.518 2.com Valuation P/E FYE 1/1/12 P/E FYE 12/31/12 P/E FYE 12/31/13 P/E FYE 12/31/14 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 10% 22% 13x 11x 9x 8x 1.865 50% 20.548 331 3.461 -943 23.60 437 1.274 558 1.423 1.934 3.24 17% Ten-Year Stock Price Performance and Trading Volume Dynamics $120 $100 $80 $60 $40 $20 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.15 438 836 810 26 23. 2007 2008 2009 10.050 4.2% 774 1.91 17% 2011 19. except per share data) Revenue Gross profit Adjusted operating income Adjusted pretax income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations Capex Free cash flow … % of revenue: Gross profit R&D Adjusted operating income Cash.126 1.0% 10.094 4.269 841 784 629 1.220 51% 17.554 6.614 1.1% Actual $1.3% 14.186 2.383 1.6x This quarter Next quarter FYE 12/31/12 FYE 12/31/13 FYE 12/31/14 LT growth EPS Surprise 1/24/12 Operating Performance and Financial Position ($ millions.222 7.514 1.694 2.714 2.706 3.865 50% 20.055 1.915 2.027 3.595 2.694 2.6% 20.0% 3.104 2.415 17.1% 4.831 4.91 5.955 2.826 15 1.664 3.3% 15.257 2.40 0.345 8.151 1.26 0.24 22% FQE 12/31/10 4.054 2.845 8.22 # of Ests 30 30 33 32 10 7 Estimate $1.002 618 576 391 0.3x 10x 2.76 6. investments Receivables Inventory PP&E.92 30.878 3.6% 1.461 -943 23. 713-439-8600 Consensus EPS Estimates Latest $1.673 1.548 331 3.865 50% 20.594 6.222 7.583 3.864 9. All rights reserved.328 10 1.127 1.4% 3.manualofideas.910 2.845 8.310 15.078 3.021 2.222 7. SUBSCRIBE TODAY! www.91–$81.33 22% LTME 12/31/11 19.094 4.775 5.233 1.239 1.32 www.475 1.

capex of $2. POTENTIAL CATALYSTS • Continuing industry shift to oil could increase demand by ~20% due to greater service intensity MAJOR HOLDERS Management <1% | Wellington 5% | Dodge & Cox 4% | Capital World 4% | T Rowe 2% | JPM 2% SELECTED OPERATING DATA FYE December 31 2007 2008 ∆ revenue 16% 14% ∆ gross profit 14% 9% ∆ assets 13% 20% ∆ BV per share 25% 12% Revenue ($bn) 10. equity 36% 34% Return on equity (ROE) 26% 26% ROE – industry median3 19% 17% Trailing P/E (end) 17x 6x Forward P/E (end) 15x 24x Diluted EPS (cont. 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 one of the largest oilfield service companies.8 million barrel per day increase in global oil demand in 2012 (IEA) should drive robust drilling activity. high oil prices and an 0. We do not endorse management’s use of EBITDA due to the very significant capex needs of the business. Baker Hughes trades at ~10x forward EPS. • Acquired BJ Services for $6.52 0.91 in 2012 and $5.9 % of revenue by type: Sale 50% 48% Service and rental 50% 52% % of revenue by geographic segment: North America 43% 42% Latin America 9% 10% Europe.97 0. Baker Hughes’ products and services fall into two groups: Drilling and Evaluation includes drill bits. While the near-term outlook for economic growth is uncertain.20 in 2011. where the breadth of capabilities is a key differentiator. but we note that estimated capex of $3. Asia Pacific n/a 20% Industrial services. • Well-served. and pressure pumping. Completion and Production includes completion. 2 Based on data for the first nine months of 2011.7 6% 18% 42% 1% 22% 50% 27% 14% 5% 12x 10x 3.56 BV per share (end) ($) 20 22 Share price (end) ($) 81 32 Shares out (avg) (mn) 318 307 ∆ shares out (avg) -4% -3% 2009 -19% -42% -4% 6% 9. investments 13% 19% Inventory 21% 20% PP&E.3 10. Russia n/a 20% Middle East. and hydrocarbon demand.4 38% 62% 49% 12% 22% 17% 18% 5% 9% 8% 10% -3% 22% 3% 11% 7% 7% 10% 34% 10% 15. adding a leader in the areas of pressure pumping.06 0. benefiting from E&P companies’ capex for exploration.60 24 41 310 1% 2010 49% 42% 101% 52% 14. rather capital-intensive business. drilling services. The latter has had a better pretax margin profile. tubular services. Champion Technologies. All rights reserved.73 5. Analyst estimates call for EPS of $4. negatively impacting FCF. Baker Hughes also completed the installation of the world’s first deepwater. Africa.3 Selected items as % of tangible assets: Cash. National Oilwell Varco. Russia 29% 29% Middle East.35 0. competitive market that includes the major companies such as Schlumberger.76 in 2013. The company has 57.29 Dividends per share ($) 0. with EPS rising from $2. Asia Pacific 19% 19% Pretax margin by segment ($mn): North America n/a 27% Latin America n/a 18% Europe.4 11. stimulation and fracturing. with slightly more than one-half of revenue from North America.60 36 57 394 27% 2011 38% 41% 8% 2% 19. -$18 million in 2009. Halliburton and Weatherford. wellbore intervention. artificial lift.7 50% 50% 35% 12% 31% 22% 6% 7% 17% 12% 10% -5% 23% 4% 8% 5% 7% 11% 33% 8% 9. economic growth.000+ employees.1-3. INVESTMENT HIGHLIGHTS • Large supplier of oilfield services to oil and gas industry.manualofideas.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Baker Hughes is an integrated oilfield service company with worldwide operations. • Earnings growth continues. SUBSCRIBE TODAY! www. net 28% 28% ST debt 0% 5% LT debt 13% 17% Tangible equity 57% 51% Return on tang. INVESTMENT RISKS & CONCERNS • Cyclical. and drilling and completion fluids.com March 2012 – Page 73 of 169 . dependent on expectations for oil and natural gas prices. • Technology leader.5 11% 17% 41% 2% 23% 43% 15% 9% 8% 28x 14x 2.3 billion. Africa.60 37 49 436 11% 1 Adjusted for unusual items of -$62 million in 2008. We don’t find the shares sufficiently cheap. Baker Hughes has a global presence. In 2011.) ($) 4. . fixedfiber integration into the sand face completion. field development and production. other n/a 24% Corporate n/a -3% Selected items as % of revenue: Gross profit 34% 33% R&D 4% 4% EBIT (adjusted)1 22% 21% Net income (adjusted)1 15% 14% D&A 5% 5% Capex 11% 11% Industry gross margin3 38% 32% Industry EBIT margin3 19% 16% Tangible assets ($bn) 8. intelligent production systems. Ecolab. for example.9 billion in cash and stock in April 2010. 3 Oil Well Services & Equipment industry median.5 billion materially exceeded D&A of $1. Newpark Resources. oil production began in 2011 from the world’s deepest water depth sub-sea wells using an innovative subsea separation and boosting system. upstream chemicals. © 2008-2012 by BeyondProxy LLC. wireline services. -$134 million in 2010. In the GOM.8 16% 19% 32% 0% 18% 58% 8% 6% 9% 30x 20x 1.8 32%2 68%2 55% 12% 18% 15% 19% 10% 10% 11% 4% -3% 23% 2% 15% 11% 7% 12% 32% 5% 17.06 in 2010 to $4. and -$355 million in 2011. and Frac Tech Services. Baker Hughes should keep benefiting from growing demand for fossil fuels.4 billion should materially exceed D&A in 2012. Other competitors participate in only a few product lines.

679 EV ($mn) 37.06 FY11 continuing ops EPS: $3. Assets 52% 34% 31% 50% BAKER HUGHES – ANALYSIS OF SELECTED COMPARABLE COMPANIES (Click to visit relevant websites) Halliburton / HAL Schlumberger / SLB Weatherford / WFT Baker Hughes / BHI Trading Data ∆ to Reach 7-Year MV Low High ($mn) -67% 50% 35.608 19. = employee | Rev. All rights reserved.76 equals Revised FY13 EPS estimate: $5. 3 $40 million loss ($26 million after-tax) related to extinguishment of $500 million notes due 2013. The Manual of Ideas analysis. assumptions and estimates. % TTM Rev. 2013 ▼ Consensus FY13 EPS estimate: $5.3% equals Estimated EBIT: $3. © 2008-2012 by BeyondProxy LLC./ Empl./ EV 66% 36% 62% 77% Rev. Source: Company filings. = revenue | ∆ = change Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items Source: Company and market data. SUBSCRIBE TODAY! www.manualofideas.1 billion equals Estimated fair value of the common equity of Baker Hughes: $16 billion.73 FY08 continuing ops EPS: $5. ($000) 365 351 210 373 Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl.35 FY10 continuing ops EPS: $2. 2011 and average EBIT margin for past seven fiscal years ▼ TTM net sales: $20 billion multiplied by Average 7-year EBIT margin: 16. Operating Performance ∆ Rev.76 minus Assumed haircut to FY13 consensus EPS estimate: 5% * $5.29 FY09 continuing ops EPS: $1.1 billion minus Total debt: $4. 2 Noncash tax benefit of $214 million associated with reorg of foreign subsidiaries in 3Q11.com March 2012 – Page 74 of 169 . The Manual of Ideas analysis. the majority of which relates to the noncash impairment associated with the decision to minimize the use of the BJ Services trade name as part of our overall branding strategy for Baker Hughes.544 -60% 44% 106. 4 Expenses of $70 million (before and after-tax) associated with increasing the allowance for doubtful accounts and reserves in 2Q11 as a result of civil unrest in Libya. Book/ MV 32% 11% 38% 39% Public Market Valuation TTM EPS Yield FCF This Next Yield TTM FY FY 2% 8% 10% 12% 2% 4% 6% 7% -6% 2% 5% 9% -4% 8% 9% 11% LTM Rev. Source: Company presentation dated January 2012. or $38 per share (based on 440 million shares out) 28% downside from the recent stock price ($52 per share) Base Case Valuation methodology: Based on average diluted EPS from continuing operations for the past seven fiscal years ▼ average of FY05 continuing ops EPS: $2. Baker Hughes publishes a useful industry rig count map and related statistics. Equity/ Tang.88 equals Revised “normalized” EPS: $4. Last Gross Adj.502 -53% 203% 12.5x (*) equals Industry multiple-implied fair value: $32 billion ($74 per share) multiplied by Assumed BHI multiple as a percentage of the industry multiple: 110% (14.47 multiplied by Corresponding industry P/E: 13.9x fair value P/E multiple) equals Estimated fair value of the common equity of Baker Hughes: $35 billion ($81 per share) (based on 440 million shares out) 56% upside to the recent stock price ($52 per share) (*) Represents Oil Well Services & Equipment industry median multiple.698 Tang.Value-oriented Equity Investment Ideas for Sophisticated Investors BAKER HUGHES – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS Conservative Valuation methodology: Based on revenue for the twelve months ended December 31. TTM Q Profit EBIT 38% 37% 20% 19% 37% 21% 21% 17% 25% 33% 26% 10% 38% 22% 23% 15% Tang. BAKER HUGHES – FINANCIAL HIGHLIGHTS 2011 Financial Snapshot: 2012 Management Guidance: 1 Charge of $315 million before-tax ($220 million after-tax) in the fourth quarter.2 billion multiplied by Assumed fair value multiple of EBIT: 6x equals Estimated fair enterprise value of Baker Hughes: $19 billion plus Cash.56 FY06 continuing ops EPS: $7.66 multiplied by Assumed fair value P/E: 15x equals Estimated fair value of the common equity of Baker Hughes: $30 billion ($70 per share) (based on 440 million shares out) 34% upside to the recent stock price ($52 per share) Aggressive Valuation methodology: Based on median consensus EPS estimate for the fiscal year ending December 30.810 25. ST investments: $1.88 minus Assumed adjustment to average seven-year EPS: 20% * $3.467 -53% 93% 22.21 FY07 continuing ops EPS: $4.516 111.97 equals Average seven-year EPS: $3.

352 $ 2.525 $ 4.715 $ 3.110 $ 3. 5 Corporate and other profit before tax includes those corporate expenses previously reported by BJ Services for the quarters ended March 31.360 $ 3.387 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 1110 $ 311 $ 312 $ 298 $ 328 $ 115 $ (14) $ 28 $ 72 $ 141 $ 204 $ 340 $ 478 $ 460 $ 440 $ 607 $ 422 43 40 47 66 22 32 16 8 9 13 9 43 63 71 71 22 130 180 171 148 153 133 79 93 80 69 47 64 91 47 105 99 96 101 95 122 72 74 50 45 30 40 39 68 79 88 84 70 32 56 59 45 18 14 14 24 17 18 36 28 14 34 28 (23) $ 612 $ 689 $ 670 $ 709 $ 380 $ 239 $ 187 $ 242 $ 277 $ 344 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 221 230 287 277 87 (13) 17 27 82 31 (33) (33) (33) (33) (33) (33) (33) (33) (33) (13) 188 197 254 244 54 (46) (16) (6) 49 18 $ 800 $ 886 $ 924 $ 953 $ 434 $ 193 $ 171 $ 236 $ 326 $ 362 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 $ Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 119 Q4 11 (43) $ (138) $ (80) $ (100) $ (96) $ (117) $ (104) $ (120) $ (83) $ (142) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) (40) (30) (33) (60) (32) (37) (44) (46) (50) (12) 3 3 3 3 3 3 3 3 3 1 $ (80) $ (165) $ (110) $ (157) $ (125) $ (151) $ (145) $ (163) $ (130) $ (153) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) The presentation of Proforma Segment financial information includes results previously reported by BJ Services for the quarters ended March 31. Also included in each of these periods is a pro forma credit of $3 million to interest expense.178 $ 5.185 $ 1.657 $ 3. interest expense.428 2.745 $ 4.224 $ 1. SUBSCRIBE TODAY! www.266 1.078 4.423 4. 2Q11 includes expenses of $70 million (before and after-tax) associated with increasing reserves for doubtful accounts.210 $ 2.010 3.525 $ 4.916 $ 1.486 $ 2.511 1.006 $ 2. which is defined as income before income taxes.521 $ 4. 1Q08-4Q11 ($ in millions) Proforma Segment Revenue1 North America Latin America Europe/Africa/Russia/Caspian Middle East/Asia Pacific Industrial and Other Proforma Total Special Items3 Total Proforma Segment Profit Before Tax1.232 2. 3Q11 includes a loss on early extinguishment of our 6.306 $ 1.116 $ 3.336 2. 6 As reported by Baker Hughes As reported or estimated by BJ Serv ices Decrease to interest ex pense Proforma Combined 1 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $ 227 $ 312 $ 301 $ 463 $ 281 $ 291 $ 222 $ 292 $ 190 $ 349 $ 466 $ 486 $ 429 $ 594 $ 628 $ 810 149 121 173 117 121 76 80 41 37 25 $ 376 $ 433 $ 474 $ 580 $ 402 $ 367 $ 302 $ 333 $ 227 $ 374 $ 466 $ 486 $ 429 $ 594 $ 628 $ 810 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $ 1.360 $ 3.047 780 878 932 1.186 2.657 $ 3. the majority of which related to the noncash impairment associated with the decision to reduce the use of the BJ Services trade name as part of our overall branding strategy for Baker Hughes.180 $ 2.309 $ 4.821 227 258 276 328 277 264 257 296 272 384 431 482 473 542 568 600 722 863 828 796 742 710 626 696 720 736 757 793 771 806 850 898 481 528 520 561 502 503 463 469 439 545 606 657 659 701 708 752 167 197 201 220 175 167 172 180 189 223 278 281 270 324 336 316 2.745 $ 4.078 $ 4. The amounts for revenue and profit before tax have been reclassified into Baker Hughes’ five reportable segments.603 $ 3.936 $ 4. net interest and other Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $ 1.670 2. The performance of the company’s segments is evaluated based on segment profit before tax.741 $ 5.116 $ 3.423 $ 4. The presentation of Proforma financials includes results previously reported by BJ Services for the quarters ended March 31.374 4.741 5. 2010 and the month of April 2010. 4 North America Latin America Europe/Africa/Russia/Caspian Middle East/Asia Pacific Industrial and Other Proforma Total Corporate and Other Profit before Tax5 Corporate.641 $ 1. All rights reserved. and certain gains and losses not allocated to the segments.com March 2012 – Page 75 of 169 . Operating Profit before tax and segment profit for tax for these periods includes a pro forma charge of $33 million per quarter.525 4.998 3.716 $ 2.999 $ 2.716 $ 2.368 $ 2. 2009 and estimated BJ Services results for the quarter ended March 31. Segment profit before tax for these periods includes pro forma charges of $33 million per quarter primarily for depreciation and amortization of tangible and intangible assets associated with the acquisition of BJ Services.070 $ 1. Management identifies certain items to exclude from operating profit before tax.521 $ 4.178 $ 5.110 $ 3. BJ Services supplied estimated results for the month of April 2010.417 1.668 2.152 $ 1. 2008 through December 31.715 $ 3.210 $ 2. primarily for depreciation and amortization of tangible and intangible assets associated with the acquisition of BJ Services.118 371 $ 3.5% senior note due 2013 of $40 millions ($26 million after-tax). 2008 through December 31.728 $ 2. 2010 and the month of April 2010.Value-oriented Equity Investment Ideas for Sophisticated Investors BAKER HUGHES – SELECTED PRO FORMA FINANCIALS.387 1. This pro forma charge has been allocated to the five reportable segments based on the actual allocation of these charges in May and June 2010. Source: Company supplemental financial information (Excel file). 6 7 8 9 10 © 2008-2012 by BeyondProxy LLC.170 $ 1.539 3. No adjustments have been made for cost or revenue synergies or any other integration related items that may have affected these quarters. interest income.936 $ 4.603 $ 3.073 $ 1.178 5. In 2Q10 Baker Hughes’ results included results for BJ Services for May and June 2010.387 $ Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 118 Q3 11 Q4 1110 $ $ 5 $ 16 $ 100 $ 69 $ 35 $ 48 $ $ $ $ $ $ 70 $ $ 315 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 118 Q3 11 Q4 1110 $ 442 $ 441 $ 461 $ 503 $ 125 $ (100) $ (32) $ 35 $ 176 $ 223 $ 340 $ 478 $ 460 $ 440 $ 607 $ 422 64 56 75 90 40 42 28 14 5 9 9 43 63 71 71 22 138 195 184 157 164 139 83 105 84 69 47 64 91 47 105 99 114 119 124 148 80 89 64 55 43 41 39 68 79 88 84 70 42 75 80 55 25 23 28 27 18 20 36 28 14 34 28 (23) $ 800 $ 886 $ 924 $ 953 $ 434 $ 193 $ 171 $ 236 $ 326 $ 362 $ 471 $ 681 $ 707 $ 680 $ 895 $ 590 $ Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 118 Q3 119 Q4 11 (80) $ (165) $ (110) $ (157) $ (125) $ (151) $ (145) $ (163) $ (130) $ (153) $ (105) $ (161) $ (119) $ (117) $ (176) $ (121) Proforma Combined Depreciation and Amortization 6 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 107 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 As reported by Baker Hughes $ 147 $ 155 $ 158 $ 177 $ 173 $ 182 $ 177 $ 179 $ 189 $ 261 $ 293 $ 326 $ 315 $ 331 $ 332 $ 343 As reported or estimated by BJ Serv ices 64 66 73 69 76 73 78 75 78 27 Incremental Depreciation and Amortization 33 33 33 33 33 33 33 33 33 13 Proforma Combined $ 244 $ 254 $ 264 $ 279 $ 282 $ 288 $ 288 $ 287 $ 300 $ 301 $ 293 $ 326 $ 315 $ 331 $ 332 $ 343 Proforma Combined Capital Expenditures6 As reported by Baker Hughes As reported or estimated by BJ Serv ices Proforma Combined Proforma Combined Revenue6 North America Latin America Europe/Africa/Russia/Caspian Middle East/Asia Pacific Industrial and Other As reported by Baker Hughes As reported or estimated by BJ Serv ices Proforma Combined Proforma Combined Segment Profit Before Tax4.078 $ 4. 2010 and the month of April 2010. 2009 and estimated BJ Services results for the quarter ended March 31. 2 3 4 Operating profit before tax is defined as profit before tax (“income before income taxes”) excluding certain identified costs.368 $ 2.manualofideas. 2009 and estimated BJ Services results for the quarter ended March 31.006 $ 2.607 $ 1.821 357 386 431 472 408 386 400 433 399 424 431 482 473 542 568 600 819 975 943 899 843 804 716 806 815 767 757 793 771 806 850 898 596 652 664 706 610 617 572 571 554 579 606 657 659 701 708 752 248 297 303 302 247 239 252 244 248 247 278 281 270 324 336 316 $ 3. 2008 through December 31. 6 North America Latin America Europe/Africa/Russia/Caspian Middle East/Asia Pacific Industrial and Other As reported by Baker Hughes As reported or estimated by BJ Serv ices Incremental Depreciation and Amortization BJ Serv ices Proforma Combined Proforma Combined Corporate and Other Costs5. 4Q11 includes a charge of $315 million before-tax ($220 million after-tax).741 $ 5.309 $ 4.281 $ 972 $ 692 $ 714 $ 787 $ 919 $ 1.352 $ 2.311 1. inventory and certain other assets as a result of civil unrest in Libya.423 $ 4.

504 8.com March 2012 – Page 76 of 169 .42 0.1 billion Enterprise value: $13.508 934 1.882 8.25 (as of 2/24/12) 52-week range: $5.1% 11.5% 4.599 5.6% 3.00 1.00 1.574 5.1% 5.881 -97% -3.manualofideas.233 -93% -3.128 5.6% 15.47 0.2% 5.283 4.806 5.468 349 96 94 255 64.947 1.614 1.7% 23.197 8.970 -98% -5.46 0.226 640 598 0.622 4. SUBSCRIBE TODAY! www.024 1.66 0.66 66% 2006 7.5% Actual $0.599 5.36 0% 69.508 1.6% 7.9% 5.918 -6.10 0.207 939 995 588 586 0.438 -5.521 1.8% 12.508 1.015 5.189 -7.8% 32.080 -83% -5.Value-oriented Equity Investment Ideas for Sophisticated Investors Boston Scientific (BSX) – Appaloosa  Health Care: Medical Equipment & Supplies.7% 23.4% 213 22.33 28% Ten-Year Stock Price Performance and Trading Volume Dynamics $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.091 1.056 4.3% 12.00 1.2% 4.130 8.487 1.bostonscientific.474 6.39 0.5% 18.177 6.3% 12.357 8.7% 6. investments Total assets Tangible assets Debt Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2005 6.00 1.04 0.902 -7.461 2.4% 864 25.51 0.1% 267 21.08 # of Ests 23 23 24 24 13 11 Estimate $0.23 32% LTME 12/31/11 7.056 4. Member of S&P 500 Trading Data Price: $6.08 www.881 -97% -3.48 0.08 0.3% 6.290 5.050 8.821 5.9% 15.57 6.56 -122% Fiscal Years Ended December 31.302 -96% -4.897 680 2.7% 5.2% 5.00 1.1% 267 21.7x 14x n/m This quarter Next quarter FYE 12/31/12 FYE 12/31/13 FYE 12/31/14 LT growth EPS Surprise 2/2/12 Operating Performance and Financial Position ($ millions.6% 213 22.0% 13.509 1.11 0.96 Market value: $9.10 0.002 1.963 895 1.451.622 4.8% 1.4% 5.33 32% FQE 12/31/10 2.00 0.74 0.139 7.00 0.123 0.18 -38% 2010 7.290 5.51 -12.10 0.684 2.11 0.881 -97% -3.188 231 220 149 156 0.290 5.845 474 439 1.1 billion Shares outstanding: 1.581 5.848 1.008 421 315 693 65.196 4.770 1.2% 1.9% 10.261 -4.406 71.008 421 315 693 65.00 826 903 152 497 406 77.2% 2.5% 4.491 -87% -4.11 0.5% 11.342 225 267 147 154 0.1% 7.0% 12.770 1.3% 6.612 1.4% 7.3 million Ownership Data Insider ownership: <1% Insider buys (last six months): 19 Insider sales (last six months): 17 Institutional ownership: 86% NATICK MA.00 1.518 325 513 278 47 66.2% 13.1% 11.233 -93% -3.188 6.499 1.2% 5.6% 3.307 0.006 1.216 835 620 543 511 486 418 362 448 798 473 72.128 5.com Valuation P/E FYE 1/1/12 P/E FYE 12/31/12 P/E FYE 12/31/13 P/E FYE 12/31/14 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 7% 32% 22x 15x 13x 12x 1. except per share data) Revenue Gross profit R&D Adjusted operating income Adjusted pretax income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations D&A Capex Free cash flow … % of revenue: Gross profit R&D Adjusted operating income D&A Capex Cash.499 1.6% 1.261 -4.45 -24% 2011 7.33 -55% 68. 2007 2008 2009 8.1% 267 21.01–$7.438 -5.7% 12.307 0.008 1. 508-650-8000 Consensus EPS Estimates Latest $0.056 4.963 895 1.254 78 995 840 152 990 1.00 1.44 55% FQE 12/31/11 1.9% Month Ago $0. All rights reserved.035 633 1.87 0.7% 6.274 1.9% 6.745 -6.0% 11.668 30.520 449 132 69 380 67.261 -4.641 27.5% 12.452 31.020 547 12% 0.87 0.9% 848 8.

and the need for aftercare. 54% EMEA 21% Japan 10% Inter-Continental 8% Pretax margin by geography: U. including $4+ billion drug-eluting stent and ~$7 billion implantable cardioverter defibrillator segments growing in the low single digits. and the impact of managed care and other payors. BSX has made progress on cutting costs. Medical Equipment & Supplies industry median.188 56% 22% 12% 8% 23% 45% 59% 44% 35% 8% 29% 12% 6% 3% 2% 69% 13% 15% 10% 14% 11% 5% 52% -7% 6. divested in 2011) INVESTMENT HIGHLIGHTS • Share leader in $30 billion market that includes interventional cardiology. rendering the shares quite cheap.3 billion plan.050 56% 23% 10% 8% 22% 48% 60% 43% 36% 8% 28% 12% 5% 3% 2% 69% 12% 19% 12% 12% 11% 6% 53% -5% 7.S. -$3.509 -1% 2 Adjusted for unusual items of -$647 million in 2007. • Major provider in cardiac rhythm management market following Guidant acquisition in 2006. • Repurchased ~5% of stock in 2H11 under ~$1. and the stagnant $4+ billion pacemaker market. BSX has cut debt to the targeted level of $4 billion and has gained investment grade status. especially in Europe and Asia 1 FYE December 31 2007 ∆ revenue 7% ∆ gross profit 7% ∆ assets 1% ∆ book value -1% ∆ BV per share -15% Revenue ($mn) 8.499 1% 2009 2% 1% -7% -7% -7% 8. -$2.508 1% 2010 -5% -7% -12% -8% -9% 7. net 21% ST debt 3% LT debt 98% Tangible equity -98% Shares out (avg) (mn) 1. In 1969. a predecessor introduced steerable catheters used in some of the first less-invasive procedures performed. as slower-than-expected growth in cardiovascular device end markets produced disappointing financial performance. and cardiac rhythm management (see above chart). The company has an opportunity to gain share in Europe and Asia to bring it in line with the U. • Guiding for cumulative FCF of $7. improving the balance sheet.518 1% 2011 -2% -5% -4% 1% 1% 7.130 Selected items as % of tangible assets: Cash.S. BSX should generate ~$1 per share of annual FCF over the next few years. reducing risk.S.com March 2012 – Page 77 of 169 . investments 18% Inventory 9% PP&E. endoscopy. The deal established BSX as one of the world’s largest cardiovascular device companies and a global leader in microelectronic therapies. which saw a 7% ASP decline in 2011.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Boston Scientific provides less-invasive medical devices used in a broad range of interventional medical specialties. and reducing the share count. especially if management allocates capital prudently.1 billion in 2009.0 billion in 2008. All rights reserved.5 billion over the next five years.806 54% 23% 11% 9% 17% 42% 46% 37% 33% 9% 28% 14% 6% 4% 2% 67% 12% 13% 8% 8% 11% 5% 51% -7% 5.357 % of revenue by geography: U. plus stock buybacks • Market share gains.or less-invasive. trauma.7 billion in 2010.056 5% 18% 33% 0% 84% -97% 1. © 2008-2012 by BeyondProxy LLC. FCF should benefit from $650$750 million in targeted near-term cost reductions. While the stock price has stagnated.622 53% 23% 11% 10% 16% 41% 44% 37% 33% 10% 27% 16% 7% 4% 2% 65% 12% 23% 20% 17% 11% 4% 52% -5% 5. MARKET SHARE 1 SELECTED OPERATING DATA Represents revenue share in medical device markets served by Boston Scientific 2 Excludes Neurovascular business ($340 million in BSX revenue.487 ∆ shares out (avg) 17% 2008 -4% -7% -13% -13% -13% 8.574 13% 14% 26% 0% 90% -96% 1. Pricing pressure has been particularly acute in drug-eluting coronary stent systems.manualofideas. greater power of consolidating clients. INVESTMENT RISKS & CONCERNS • Pricing pressure due to competition. -$1. and -$862 million in 2011.474 22% 11% 23% 0% 90% -87% 1. MAJOR HOLDERS Management 2% | Dodge & Cox 8% | Primecap 4% | Cap Re 4% | GS 3% | Franklin 3% | Wellington 3% | Oakmark 3% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?        THE BOTTOM LINE Boston Scientific has been in turnaround mode over the past two years. SUBSCRIBE TODAY! www. 27% EMEA 52% Japan 63% Inter-Continental 41% % of revenue by segment: Interventional cardiology 36% Peripheral interventions 8% Cardiac rhythm management 25% Endoscopy 10% Urology/women’s health 5% Neuromodulation 2% Electrophysiology 2% Selected items as % of revenue: Gross profit 72% R&D 13% EBIT (adjusted) 1 8% Pretax income (adjusted)1 1% Net income (adjusted)1 2% D&A 9% Capex 5% Industry gross margin2 51% Industry EBIT margin2 -4% Tangible assets ($mn) 8. BSX focuses on medical devices that are least. • Operates in stagnant or slow-growing markets. POTENTIAL CATALYSTS • Continued FCF of $1+ billion.599 4% 16% 30% 9% 88% -93% 1.

Source: Company presentation dated January 2012. 2011 ▼ Operating cash flow: $1. or $12 per share (based on 1.0x fair value P/E multiple) equals Estimated fair value of the common equity of Boston Scientific: $11 billion ($7. Source: Company filings. ST investments: $267 million minus Total debt: $4.2 billion plus Cash.30 per share) Aggressive Valuation methodology: Based on free cash flow for the twelve months ended December 31.0% required FCF yield) equals Estimated fair value of the common equity of Boston Scientific: $17 billion.manualofideas. All rights reserved. © 2008-2012 by BeyondProxy LLC. 2011 and average EBIT margin for past seven fiscal years ▼ TTM net sales: $7. 2013 ▼ Consensus FY13 EPS estimate: $0.2 billion.48 equals Revised FY13 EPS estimate: $0.30 per share) Base Case Valuation methodology: Based on median consensus EPS estimate for the fiscal year ending December 30. assumptions and estimates. The Manual of Ideas analysis.5 billion shares out) 54% downside from the recent stock price ($6. SUBSCRIBE TODAY! www.5 billion shares out) 24% upside to the recent stock price ($6.com March 2012 – Page 78 of 169 .40 per share) multiplied by Assumed BSX multiple as a percentage of the industry multiple: 105% (17.3 billion equals Estimated fair value of the common equity of Boston Scientific: $4.and litigation-related items. or $2.80 per share) (based on 1.90 per share (based on 1.0 billion minus Capex: $320 million equals Free cash flow: $690 million divided by Industry median FCF yield: 4.30 per share) (*) Represents Medical Equipment & Supplies industry median multiple.5% (*) equals Industry FCF yield-implied fair value: $16 billion ($11 per share) multiplied by Assumed required FCF yield as a percentage of the industry FCF yield: 90% (4.4 billion multiplied by Assumed fair value multiple of EBIT: 6x equals Estimated fair enterprise value of Boston Scientific: $8.9% equals Estimated EBIT: $1.46 multiplied by Corresponding industry P/E: 16.48 minus Assumed haircut to FY13 consensus EPS estimate: 5% * $0. significant tax audit settlements and restructuring and restructuring-related items.5 billion shares out) 90% upside to the recent stock price ($6. divestiture.6 billion multiplied by Average 7-year EBIT margin: 17. BOSTON SCIENTIFIC – MANAGEMENT’S CAPITAL ALLOCATION STRATEGY Adjusted Free Cash Flow excludes any potential amounts related to acquisition-.Value-oriented Equity Investment Ideas for Sophisticated Investors BOSTON SCIENTIFIC – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS Conservative Valuation methodology: Based on revenue for the twelve months ended December 31.2x (*) equals Industry multiple-implied fair value: $11 billion ($7.

SUBSCRIBE TODAY! www. 2 Expected implementation in 2013.Value-oriented Equity Investment Ideas for Sophisticated Investors BOSTON SCIENTIFIC – COST REDUCTION OPPORTUNITY Cost cuts should help BSX generate roughly $7.5 billion of cumulative FCF over the next five years. All rights reserved. Source: Company presentation dated January 2012. 1 Substantially complete end of Q4 2011. © 2008-2012 by BeyondProxy LLC. BOSTON SCIENTIFIC – COMPETITIVE MATRIX – MARKET SHARE POSITION IN SELECTED MARKETS Source: Company presentation dated January 2012.com March 2012 – Page 79 of 169 .manualofideas.

7% 58.84 12% 2005 9.444 -3.409 9.541 3.2% 31.016 7.232 -755 55. SUBSCRIBE TODAY! www.831 3.493 21.172 41.21 1.675 1.2 billion Shares outstanding: 1.30 1.02 20% 2009 10. 2006 2007 2008 10.084 2.68 2.0% 69.1% 28 17.503 10. Wintergreen  Energy: Oil & Gas Operations Trading Data Price: $38.103 2.0% 50.0% 52.176 49% 20. Pershing Square .69–$52.2% 18 42.4% 63.076 11.12 1.3% 22.680 2.920 7.090 5.54 0.157 5.25 4.072 3.3% 20.02 (as of 2/24/12) 52-week range: $25.27 3.7% 23.6% 54.85 0.591 899 873 718 59.5% 27 39.26 3.820 2.804 2.0% 41.4% 27.365 22.7% 17.Value-oriented Equity Investment Ideas for Sophisticated Investors Canadian Natural (CNQ) – BP Capital .8% 26.893 1.823 2. Canada.16 0.187 1.177 7.57 www.9x This quarter Next quarter FYE 12/31/11 FYE 12/30/12 FYE 12/30/13 LT growth EPS Surprise 11/3/11 Operating Performance and Financial Position ($ millions.028 2.176 49% 20.097 1.3% 27.629 19.872 1.7% 18 19.946 1.737 11.541 3.215 2.401 43% 17.249 38% 7.5% 29.198 42.599 2.22 7% FQE 9/30/10 3.037 0.418 1.42 2.9% 41.182 5.692 1.066 3.8 billion Enterprise value: $51.1% 19.2 million Ownership Data Insider ownership: <1% Insider buys (last six months): 0 Insider sales (last six months): 0 Institutional ownership: 67% CALGARY AB.83 2.4% 22.345 -1.536 7.7% 28. 403-517-6700 Consensus EPS Estimates Latest $0. All rights reserved.208 3.079 1.672 21.742 49% 19.989 2.772 4.1% 18 42.089 18.016 5.403 2.126 5.295 1.158 6.5% 24.814 804 597 0.855 3.361 45.777 2.089 1.95 5% 2010 12.454 47% 17.324 20.8% 20.269 4.5% 18.635 8.341 23.884 3.11 1.09 0.277 6.07 0.073 4.084 5.812 33.17 0.4% 13 39.47 4.7% 25.706 32% 9.875 974 656 0.55 0.890 43.395 2.100.783 3.293 4.016 3.10 n/a Actual $0.8% 29.75 7% LTME 9/30/11 12.155 1.335 40% 6.37 8% 69. net Tangible assets Total current liabilities Debt Total liabilities Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2004 7.95 0.6% 27.711 8.343 950 59.023 9.1% 48.023 9.354 -99 56.255 888 1.05 8% FQE 9/30/11 3.0% 21 33.409 9.064 7.023 42.081 4.9% 23 30.399 1.865 1.473 7.4% 22 40.956 22.69 10% Fiscal Years Ended December 31.035 24.9% 29.22 11% Ten-Year Stock Price Performance and Trading Volume Dynamics $60 $50 $40 $30 $20 $10 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.647 1.manualofideas.326 13.867 2.951 36.166 3.778 6.84 0. investments PP&E.168 14.497 22.088 6.04 Market value: $41.075 1.568 10.340 37% 12.09 1.8% 27 40.311 18.365 22.032 1.425 13. except per share data) Revenue Gross profit Adjusted operating income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations D&A Capex Free cash flow … % of revenue: Gross profit Adjusted operating income D&A Capex Cash.095 -646 -667 67.831 58.398 47% 18.07 n/a Month Ago $0.0x 17x 1.357 8.5% 32.com Valuation P/E FYE 12/31/10 P/E FYE 12/31/11 P/E FYE 12/30/12 P/E FYE 12/30/13 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 6% 7% 25x 17x 12x 9x 4.413 11.827 6.687 7.723 21.341 23.826 13.935 7.589 -893 67.08 1.cnrl.97 0.818 1.17 -0.65 # of Ests 7 4 9 10 8 n/a Estimate $0.35 1.477 4.619 20.96 14% 66.20 1.com March 2012 – Page 80 of 169 .998 1.32 0.059 22.695 1.60 0.4% 32.348 -544 69.361 45.712 3.

1-1. Should oil prices return to past lows. 3 Excludes stock-based compensation.1 8% 27% 11% 25% 7% -6% 6% 22% 24% 52% 27% 26% 14% 45% 0% YTD 2010 9/30/11 5% 22% 10% -8% 29% 2% 3. mainly in Canada. Bitumen is oil that is too heavy or thick to flow or be pumped without being diluted or heated. SUBSCRIBE TODAY! www.7 1. however.* Synthetic crude and thermal oil (bitumen) accounted for 43% and 19% of net proved reserves of 3. This. While production and reserve expansion has also led to high capex. reserve life is ~20 years on 2010 production and proved reserves only.9 2. • Returns-focused management with a strong track record of per share value creation.0 1.45/GJ.9 210 62% 38% 45 5 12 28 -40% 11. NAV per share has compounded 15% per year on average since yearend 2006.2 12% 15% 12% 17% -8% 4% 1% 46% 22% 42% 46% -4% 22% 40% 0% 2009 81% 2% -32% 3. as well as increasing royalties. resulting in greater operating leverage for oil sands producers.7 11% 25% 16% 24% -1% 1% -3% 27% 15% 37% 41% -4% 7% 50% 1% Based on Canadian GAAP and Canadian dollars. water.7 billion barrel of oil equivalent (BOE) at yearend 2010.barrels of oil equivalent ($/BOE): Sales price2 48 49 Royalties 6 6 Production expense 9 10 Netback 33 33 -3% 0% ∆ netback Gross revenue ($bn) 11.0 206 56% 44% 69 10 12 47 42% 16.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Canadian Natural Resources is an oil and gas E&P company.7 billion BOE of reserves and forecast prices and costs). • Highly sensitive to price of oil. increased dividends.5 Selected items as % of gross revenue: Royalties 11% 11% Production 17% 17% Transportation/blending 12% 13% DD&A 21% 23% Risk mgmt (gain)/loss 3% 12% Forex (gain)/loss 1% -4% Other 3% 4% EBIT 33% 24% Adj. 4 Based on adjusted net income. energy consumption needs in the future.0 1. the economic viability of oil sands might be constrained (despite technological progress). “Gross/net” figures are stated before/after royalties.3x TTM EBITDA). the company benefits from long-life reserves in politically stable Canada. Insiders own 4% of shares.6 billion in 2012 based on average annual WTI strip pricing of US$88/bbl and AECO strip pricing of C$3. While continued high oil prices are necessary for oil sands producers to be economically viable. • Generated ~$30 billion of net cash from operations in the last five years (70%+ of recent market value). FCF is targeted at $1. like oil sands. Stated net of transportation and blending costs and excluding risk management activities.9 231 67% 33% 50 7 11 32 13% 14.6 12.3 10% 24% 12% 28% -1% -1% 4% 23% 18% 44% 37% 7% 13% 48% 0% n/a n/a 211 64% 36% 56 7 12 36 13% 10. This is likely to make the company’s reserves an attractive alternative for U. • 90% of reserves are in politically stable North America. and debt reduction. Oil sands are a natural mixture of sand. • Higher oil/gas prices may not translate into higher profits over time. • Guiding for net cash from operations of $8. is likely to increase. unrealized risk management and foreign exchange transactions. as well as impairments. the need for unconventional resources.5+ billion at recent market prices. as well as a capable and incentivized management team.S. will continue to pressure netbacks even if sales prices increase. net income3 14% 19% Net cash from operations 36% 46% Net capex 62% 51% FCF -26% -4% Return on tang. ~70% of proved reserves are developed and producing. 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 Canadian Natural has emerged as a major unconventional oil player through its exploitation of oil sands in the Athabasca region of Canada. Probable net reserves 1.6 1. the effect of statutory tax rate and other legislative changes on future income tax liabilities. CATALYSTS • Continued high oil price (viability of oil sands) • Production and reserve growth • Continued dividend increases and debt reduction MAJOR HOLDERS Insiders 4%* | BlackRock 5% | Wintergreen <1% * Excludes stock options (6% including stock options). with the remaining 21% comprised of other oils/liquids. Production expenses per barrel of oil equivalent increased at a 7% CAGR from 2005 to 2010 and are up 7% y-y YTD. equity4 18% 20% Tangible equity/assets 34% 35% 0% 0% ∆ shares out (avg) 1 2 2008 0% -7% 29% 2. the recent valuation is not compelling.0 Gross production (MMBOE) 212 222 % of gross production by type: Crude oil & NGLs 57% 54% Natural gas 43% 46% Netback -. All rights reserved. Production costs in Canada’s oil sands are generally higher than in other oil regions. clay and bitumen. Based on the “PV-10” value of proved and probable reserves. With conventional oil supply declining. © 2008-2012 by BeyondProxy LLC. • $9. which are worth $1.com March 2012 – Page 81 of 169 .2-8. * SELECTED OPERATING DATA1 FYE December 31 2006 2007 22% 1% ∆ proved net reserves 5% 5% ∆ gross production 5% 8% ∆ gross revenue Period-end net reserves (BOE in billions): Proved net reserves 1.3 billion of net debt (1. Natural gas was 17%.manualofideas.” INVESTMENT RISKS & CONCERNS • Recent enterprise value approximates the aftertax PV-10 of proved and probable net reserves of $54 billion as of yearend 2010 (based on 5. INVESTMENT HIGHLIGHTS • Major oil sands player.5 billion and is to be used for “opportunistic acquisitions.

the effect of statutory tax rate and other legislative changes on future income tax liabilities. CANADIAN NATURAL RESOURCES – MANAGEMENT’S PRODUCTION TARGETS THROUGH 2018 With management expecting that natural gas prices “will be low for 5 to 10 years.0 billion $4.1 billion 7. Excludes stock-based compensation. © 2008-2012 by BeyondProxy LLC.1 billion $37 per share -4% 7.” CNQ will focus primarily on liquids productions.095 million shares outstanding. discounted at 10%.3 billion $40.3 billion $45.6 billion $27 per share -29% 5. SUBSCRIBE TODAY! www.9 billion 1. prior to the provision for interest.com March 2012 – Page 82 of 169 . general and administrative expenses and the impact of any risk management activities. as well as impairments.3 billion -$9. 2 3 Source: Company filings.0x $38. All rights reserved.3 billion 2 -$9.1 billion) EV per BOE of 1P reserves ($/BOE) EV per BOE of 2P reserves ($/BOE) 1 Conservative PV-10 of 1P reserves $38.5 billion) Other implied valuation metrics: Price to tangible book ($22.3 billion)3 Net cash from operations yield ($5.0 billion $41 per share 8% 7.1 billion) Adjusted earnings yield ($2. assumptions and estimates. Source: Company presentation dated February 2012.0x 6% 14% 1.3 billion 1.3x $10 $7 Based on forecast prices and costs.manualofideas.1 billion $7.0x $54.0x $14 $10 -$9.6x 5% 12% 2.8x $13 $9 $29.5x 8% 18% 1.0x $49.9 billion Base Case 7x TTM EBITDA Aggressive PV-10 of 2P reserves $3.Value-oriented Equity Investment Ideas for Sophisticated Investors CANADIAN NATURAL RESOURCES – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS (C$ in billions) Valuation methodology Conservative case: After-tax PV-10 of net proved reserves at yearend 20101 Fair value multiple Estimated enterprise value Base case: TTM EBIT Add: DD&A TTM EBITDA Fair value multiple Estimated enterprise value Aggressive case: After-tax PV-10 of net 2P reserves at yearend 20101 Fair value multiple Estimated enterprise value Minus: Net debt Estimated fair value of the equity of Canadian Natural Implied upside/(downside) to recent price ($38 per share) Implied valuation metrics based on trailing financials: EV to EBITDA ($7. Based on 1.4 billion $54. The Manual of Ideas analysis. unrealized risk management and foreign exchange transactions.

All rights reserved.manualofideas. SUBSCRIBE TODAY! www.Value-oriented Equity Investment Ideas for Sophisticated Investors CANADIAN NATURAL RESOURCES – MANAGEMENT GUIDANCE The capex budget will grow nearly 20% in 2012. Source: Company presentation dated February 2012.com March 2012 – Page 83 of 169 . © 2008-2012 by BeyondProxy LLC.

52 1.51 1.2x 10x 1.52 2.869 690 2.00 1.16 1.632 3. except per share data) Revenue Gross profit R&D Adjusted operating income Adjusted pretax income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) … % of revenue: Gross profit R&D Adjusted operating income Cash.562 45.5% 3.152 75% 13.215 14.458 18.049 603 1.23 1.8% 3. 2007 2008 2009 5.097 2.716 5.848 26.10 0.579 1.295 20.188 62% 5.958 1.4% 19.765 767 166 315 854 709 0.20 1.847 3.9% 9.056 8.96 30% FQE 12/31/11 1.8% 10. All rights reserved.948 5.51–$23. 607-974-9000 Consensus EPS Estimates Latest $0.097 2.4% 3.366 2.890 3.2% 8.561 2.738 2.807 5.984 443 772 755 781 0.167 2.0% 9.1% 5.199 639 2. net Total assets Tangible assets Payables Total current liabilities Debt Total liabilities Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2005 4.manualofideas.370 1.corning.825 4.550 46.0x This quarter Next quarter FYE 12/31/12 FYE 12/31/13 FYE 12/31/14 LT growth EPS Surprise 1/25/12 Operating Performance and Financial Position ($ millions.210 2.199 19.24 0.8% Actual $0.com March 2012 – Page 84 of 169 .024 1.936 2.395 2.537 5.319 6.319 1.890 3.907 609 2.833 25.9 billion Enterprise value: $17.42 23% 38.com Valuation P/E FYE 1/1/12 P/E FYE 12/31/12 P/E FYE 12/31/13 P/E FYE 12/31/14 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 10% 16% 8x 10x 9x 9x 2.90 16% LTME 12/31/11 7.065 12.930 54% 4.6% 21.816 3.20 1.Value-oriented Equity Investment Ideas for Sophisticated Investors Corning (GLW) – Century .184 2.560 1.0% 17.346 4. investments LT investments PP&E.08 1.819 6.45 0.749 631 2.50 1.366 2.848 26.539 2.4% 5.423 3.5% 6.860 5.2% 2.847 3.986 15.75 (as of 2/24/12) 52-week range: $11.350 4.516 3.90 0.566 671 1.207 10.583 3.770 20.943 25.0% 10.550 44.922 977 2.86 22% 46.522 5.47 20% Fiscal Years Ended December 31.152 75% 12.4% 5.29 0.052 1.512 1.867 72% 9.4% 17.004 5.39 1.4 billion Shares outstanding: 1.770 20.372 8.00 1.53 0.33 1.8% Month Ago $0.749 2.770 20.2% 8.093 565 627 563 1.98 20% 2011 7.992 7.391 6.391 6.986 2.5% 20.825 4.825 4.283 517 898 1. Dodge & Cox .9% 2.193 13.097 2.3 million Ownership Data Insider ownership: <1% Insider buys (last six months): 22 Insider sales (last six months): 9 Institutional ownership: 76% CORNING NY. SUBSCRIBE TODAY! www.5% 9.59 5% 2010 6. Sequoia  Technology: Electronic Instruments & Controls.46 0.5% 23.619 550 1.3% 9.138 69% 8.41 0.4% 11.20 0.719 9.33 # of Ests 20 20 23 21 7 4 Estimate $0.117 798 1.726 10.89 0.03 8% Ten-Year Stock Price Performance and Trading Volume Dynamics $35 $30 $25 $20 $15 $10 $5 $0 Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.23 1.729 4.036 5.152 75% 13.5% 23.922 977 2.1% 21.258 1.319 6.350 4.7% 16.720 5.671 27.605 5.518.558 45.995 21.174 2.813 13.434 1.117 798 1.558 46. Member of S&P 500 Trading Data Price: $13.887 825 177 361 690 629 0.566 1.726 10.958 1.986 2.560 43.918 1.675 11.391 6.03 16% FQE 12/31/10 1.951 846 2.34 1.1% 10.8% 6.671 27.943 25.464 43.659 74% 11.33 www.05 1.30 0.922 977 2.458 18.256 18.52 15% 2006 5.262 1.149 47% 3.497 3.467 2.671 27.752 14.372 8.726 10.41 3.50 3.7% 9.22 Market value: $20.833 25.546 43.659 74% 11.848 26.566 671 1.06 0.

and Prysmian. Corning has 7. • Expects “moderate” growth in 2012. “price declines will reset the profitability of both Display Technologies and Dow Corning to lower levels. and a proprietary fusion manufacturing process.” Still. Corning is a low-cost producer due to scale. • 4. • Customer concentration. • Longtime management. $800 million of which in display unit.890 287 40% 26% 13% 14% 8% 4% 21% 22% 86% 17% 24% 62% 10% 45% 9% 21% 41% 36% 12% 31% 26.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Corning dates back to 1851 and provides specialty glass.2 6. Corning is reducing capacity by ~25%.750 patents.9 19.632 267 45% 26% 12% 9% 8% 24% 2% 38% 75% 39% 27% 59% 10% 46% 9% 27% 58% 54% 13% 15% 25. • Capital-intensive business. INVESTMENT HIGHLIGHTS • Display (40% of sales): Corning and 50%-owned Samsung Corning Precision are the top producers of glass substrates for active matrix LCD displays used in notebooks. including 1. led by telecom and environmental tech segments.manualofideas.0 Revenue ($mn) 5.558 1% 2011 10% 19% 17% 8% 9% 8% 28.20 12 19 3. analysts expect Corning to earn $1.500 in the U.566 1. investments 24% 15% LT investments 20% 16% PP&E.8 7.700 in the U. • 50%-owned Dow Corning hurt by “major upheaval” in solar panel industry.20 BV per share (end) ($) 6 9 Share price (end) ($) 24 10 Volume (mn shares) 3. has been hurt by steeper-than-expected price declines in the display and solar panel markets. with Corning’s ten largest customers accounting for 51% of revenue.6 billion square feet in 2012. MAJOR HOLDERS Management <1% | Cap Re 4% | Cap World 3% | T Rowe 3% | Primecap 2% | AllianceBernstein 2% SELECTED OPERATING DATA FYE December 31 2007 2008 ∆ employees 1% 9% ∆ revenue 13% 2% ∆ gross profit 20% 0% ∆ assets 16% 27% ∆ book value 31% 42% ∆ BV per share 30% 42% Employees (‘000) (end) 24.) ($) 1. Management expects lower equity earnings from Dow Corning. • Environmental technologies (13%): Corning is a leader in automotive ceramic substrate products. especially in light of Corning’s very strong balance sheet.S. © 2008-2012 by BeyondProxy LLC.25 0. SUBSCRIBE TODAY! www. Display accounts for 40% of revenue. rendering the shares quite attractive. net 40% 43% Payables 4% 4% Debt 10% 8% Tangible equity 62% 69% Return on tang.5 5.560 ∆ shares out (avg) 1% 0% 2009 -13% -9% -24% 11% 16% 16% 23.34 3. and IP assets.” In response. All rights reserved. • Telecommunications (26%): Corning is a leader in optical fiber/cable.395 214 45% 31% 11% 6% 7% -11% -7% -17% -11% 12% 27% 59% 11% 39% 10% 7% 36% 37% 15% 16% 20.997 1.com March 2012 – Page 85 of 169 . Corning has recently experienced double-digit price declines in display.52 per share in 2012 and 2013.0 Selected items as % of tangible assets: Cash. which makes high purity polycrystalline silicon. ahead of Asahi Glass. which makes specialty glass for LCD displays and other products. with management “hopeful that sequential quarterly price declines in 2012 will be moderate. with 2012E capex of $1. including 2.400+ patent applications in process. fiber process.20 10 19 3.2 billion square feet to 3. Competitors include NGK.23 13 13 4.39 and $1.32 Dividends per share ($) 0.860 5. and Avan Strate. and Ibiden.8 billion. INVESTMENT RISKS & CONCERNS • Pricing pressure in display segment. and LCD TVs.465 1.6 17% 19% 39% 3% 9% 72% 16% 15x 9x 1. equity 29% 44% Trailing P/E (end) 18x 3x Forward P/E (end) 7x 7x Diluted EPS (cont.1 25% 17% 36% 3% 9% 74% 19% 9x 11x 2. thinner and lighter. Sumitomo Electric. technology leadership. Global demand for LCD glass should increase from 3.10 0. respectively.9 22% 18% 40% 4% 9% 75% 15% 7x 9x 1. while the 50%-owned equity affiliate Dow Corning sells into the solar panel market. While 8% will expire by 2014. along with Furukawa Electric. respectively.948 Revenue / empl.758 4.S. with chairman and CEO Wendell Weeks (52) and CFO Jim Flaws (63) having joined Corning in ‘83 and ‘73. driven by lower demand and price declines in silicon products and at Hemlock Semiconductor. According to management.550 -1% 2010 11% 23% 46% 21% 25% 24% 26.8 27. Denso. Nippon Electric Glass. Corning is differentiated through products such as Corning Lotus glass.562 0% 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 Corning. ($’000) 238 230 % of revenue by major segment: Display technologies 45% 46% Telecommunications 30% 30% Environmental techs 13% 12% Specialty materials 6% 6% Life sciences 5% 5% Revenue growth by major segment: Display technologies 23% 4% Telecommunications 3% 1% Environmental techs 23% -6% Specialty materials -2% -2% Life sciences 6% 7% % of revenue by major geography: North America 31% 29% Asia Pacific 54% 55% Europe 13% 14% Selected items as % of revenue: Gross profit 47% 46% R&D 10% 11% EBIT 18% 26% Pretax income 39% 48% Net income 37% 88% D&A 10% 12% Capex 22% 32% Tangible assets ($bn) 14. flat panel monitors.77 0. which allows for glass that is larger.28 0.382 Shares out (avg) (mn) 1. Fujikura.849 1.

6% (*) equals Industry FCF yield-implied fair value: $14 billion ($9.52 minus Assumed haircut to FY13 consensus EPS estimate: 5% * $1.4x (*) (†) equals Industry multiple-implied fair value: $29 billion ($19 per share) multiplied by Assumed GLW multiple as a percentage of the industry multiple: 105% (1.manualofideas.00 per share) multiplied by Assumed required FCF yield as a percentage of the industry FCF yield: 125% (6.Value-oriented Equity Investment Ideas for Sophisticated Investors CORNING – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS Conservative Valuation methodology: Based on free cash flow for the twelve months ended December 31. 2011 ▼ Book value: $21 billion minus Intangibles: $930 million equals Tangible book value: $20 billion multiplied by Industry price to book: 1. 2011 ▼ Operating cash flow: $3. © 2008-2012 by BeyondProxy LLC. CORNING – FREE CASH FLOW.4x (*) equals Industry multiple-implied fair value: $27 billion ($18 per share) multiplied by Assumed GLW multiple as a percentage of the industry multiple: 125% (15.5x multiple of tangible book) equals Estimated fair value of the common equity of Corning: $30 billion ($20 per share) (based on 1. 2013 ▼ Consensus FY13 EPS estimate: $1. assumptions and estimates.5 billion shares out) 63% upside to the recent stock price ($14 per share) (*) Represents Electronic Instruments & Controls industry median multiple.9% required FCF yield) equals Estimated fair value of the common equity of Corning: $11 billion.52 equals Revised FY13 EPS estimate: $1.4 billion equals Free cash flow: $760 million divided by Industry median FCF yield: 5. (†) In order to be conservative.5 billion shares out) 45% upside to the recent stock price ($14 per share) Aggressive Valuation methodology: Based on median consensus EPS estimate for the fiscal year ending December 30. Source: Company filings.44 multiplied by Corresponding industry P/E: 12.2 billion minus Capex: $2. The Manual of Ideas analysis. SUBSCRIBE TODAY! www. we apply the industry median multiple of book value to the company’s tangible book value. or $7.20 per share (based on 1.5x fair value P/E multiple) equals Estimated fair value of the common equity of Corning: $34 billion ($22 per share) (based on 1. All rights reserved. Free cash flow has trended higher unevenly over the past several years.com March 2012 – Page 86 of 169 .5 billion shares out) 48% downside from the recent stock price ($14 per share) Base Case Valuation methodology: Based on tangible book value as of December 31. 2004-2011 ($ in millions) Source: Company presentation dated February 2012.

Source: Company presentation dated February 2012. Capital investment is expected to decrease going forward. 2012-2014 Management expects gross margin to remain stable or increase going forward. Source: Company presentation dated February 2012.com March 2012 – Page 87 of 169 . CORNING – MANAGEMENT’S OUTLOOK FOR CAPITAL SPENDING ($ in millions) Source: Company presentation dated February 2012. SUBSCRIBE TODAY! www.manualofideas. freeing up cash that could be used for additional buybacks and dividends. All rights reserved. CORNING – MANAGEMENT’S DIRECTIONAL OUTLOOK FOR GROSS MARGIN. © 2008-2012 by BeyondProxy LLC.Value-oriented Equity Investment Ideas for Sophisticated Investors CORNING – USE OF CUMULATIVE CASH FLOW. management has also allocated cash to repurchases and dividends. 2007-2011 While the business has required significant capital investments.

066 0 2.4x 11x n/m This quarter Next quarter FYE 9/30/12 FYE 9/30/13 FYE 9/30/14 LT growth EPS Surprise 1/26/12 Operating Performance and Financial Position ($ millions.26 42% 55.60 5.7% 4.2% 21.0% 4.544 878 11% 1.195 400 795 51.884 19 2.Value-oriented Equity Investment Ideas for Sophisticated Investors Covidien (COV) – FPA Crescent .03 1.7% 1.700 2. All rights reserved.4% 1.655 463 2.54 14% 53.28 52% FQE 12/24/10 2.5% 1. investments Receivables Inventory LT investments PP&E.723 57.2% Actual $1.535 4.3 million Ownership Data Insider ownership: <1% Insider buys (last six months): 24 Insider sales (last six months): 13 Institutional ownership: 90% Dublin.650 -17% -3.961 468 5% 0.64 0.499 1.27 4.410 531 2.705 9.193 2.06 4.760 50.2% 1.09 4.708 2.513 583 2.138 1.03 www.669 1.633 1.17 2.931 1.574 6. net Tangible assets Short-term debt Long-term debt Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2005 9.701 650 508 1.13 0.96 0.41 3.545 2.8% 21.451 -1.767 1.969 2.953 1.087 2.231 374 410 440 471 1.639 2.347 711 2.9% 21.301 2.150 1.616 194 2.28 60% Ten-Year Stock Price Performance and Trading Volume Dynamics $70 $60 $50 $40 $30 $20 $10 $0 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC.172 2.115 1.1% 1.565 1.126 328 2. 2007 2008 2009 2010 9.994 4.66 0.40 0.4% 22.129 17% 2.59 3.788 1.552 583 2.com March 2012 – Page 88 of 169 .748 1.558 6.7% Month Ago $1.433 1.608 9.486 1.986 628 7% 1.381 479 2.00 9.139 1.384 331 2.244 -13% -2.272 708 2.763 255 4.51 60% FQE 12/30/11 2.1% 872 3.197 1.898 1.88 (as of 2/24/12) 52-week range: $41.05 0.6% 3. 353-1-438-1700 Consensus EPS Estimates Latest $1.28 0.com Valuation P/E FYE 10/1/11 P/E FYE 9/30/12 P/E FYE 9/30/13 P/E FYE 9/30/14 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 9% 52% 14x 12x 11x 11x 2. SUBSCRIBE TODAY! www.3% 20.00 497 2.77 46% 2006 8.3% 4.4% 141 1.927 11 4.301 1.30 49% 2011 11.93 41% 55.319 523 3.8% 4.3% 2.313 4.7% 4.317 9.493 3. Ireland.0% 22.584 1.3% 1.571 591 474 0.331 1.641 5.03 1.5% 1.65 Market value: $25.182 473 1.028 4.709 56.393 11.covidien.542 9.4% 21.053 49.368 7.00 497 1.04 0.467 1.805 1.873 2.552 583 2.584 8.6 billion Enterprise value: $28.429 4.925 -133 -1% -0.86 491 2.606 30 2.925 -133 -1% -0. Member of S&P 500 Trading Data Price: $52.769 1.16 0.565 -267 -2% -0.7% 5.13 # of Ests 19 19 22 21 12 10 Estimate $1.7% 2.724 5.835 250 1.7% 3.209 660 1.767 1.27 45% Fiscal Years Ended September 30.734 10.611 9.74 497 500 503 500 2.2 billion Shares outstanding: 483.263 10.240 517 1.4% 242 1.28 56% LTME 12/30/11 11.02 10.23 483 267 131 136 58.503 1. Heartland  Health Care: Medical Equipment & Supplies.00 0.9% 21.211 510 3.0% 25.208 1.83 493 2.3% 21.578 2.35–$57.20 495 209 87 122 56.703 6.910 10.255 0 2.734 10.61 5.356 -1.415 4 4. except per share data) Revenue Gross profit Adjusted operating income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations Capex Free cash flow … % of revenue: Gross profit R&D Adjusted operating income Cash.211 510 3.248 1.309 5.879 1.28 4.788 1.197 -630 -6% -1.manualofideas.

active ingredients Medical Supplies (15%): nursing care.6 15% 13% 7% 26% 0% 31% 5% 26x 15x 0. 3 Medical Equipment & Supplies industry median. investments 8% 14% Inventory 10% 15% LT investments 3% 8% PP&E. soft tissue repair products. • Experienced team.2 13% 16% D&A 4% 4% Capex 4% 4% Tangible assets ($bn) 11. net 21% 29% ST debt 5% 0% LT debt 31% 34% Tangible equity -2% 7% Trailing P/E (end) n/m 13x Forward P/E (end) 15x 19x Dividends per share ($) 0.9 % of revenue by segment: Medical devices 56% 60% Pharmaceuticals 26% 27% Medical supplies 18% 18% Operating margin by segment: Medical devices 32% 30% Pharmaceuticals 18% 18% Medical supplies 12% 11% % of revenue by geography: U.3 59% 20% 17% 31% 16% 13% 58% 5% 24% 12% 33% 14% 13% 9% 10% 13% 55% 4% 21% 13% 4% 4% 9.9 Selected items as % of tangible assets: Cash. EBIT margin is projected at 22-23%. vascular products. energy devices. and drug manufacturers. surgi-centers.2 17% 15% 6% 27% 5% 38% -1% 44x 10x 0.3 9. Pharmaceuticals (17%): specialty pharma. -$141 million in ‘08. we are wary of the stated long-term goal of double-digit EPS growth.64 Shares out (avg) (mn) 497 500 ∆ shares out (avg) 0% 1% 2009 4% 6% 7% 3% 3% 10. with better-than-expected recent sales fueled by doubledigit gains in energy devices and vascular products. Analysts expect EPS to grow 7% to $4.manualofideas. raising the risk of misallocation of resources. and -$15 million in ‘11. Covidien sells primarily to hospitals.8 16% 14% 5% 27% 3% 46% -17% 15x 12x 0. while guiding for revenue growth of 1-3% in FY12 (down from prior guidance of 3-5% due to a stronger dollar).com March 2012 – Page 89 of 169 . and BCR.4 65% 19% 17% 31% 17% 15% 55% 6% 25% 14% 32% 15% 13% 12% 11% 11% 56% 4% 21% 16% 5% 5% 9. oximetry and monitoring products. The company has strong franchises in certain medical device segments.9 68% 17% 15% 33% 17% 13% 55% 6% 23% 16% 29% 16% 11% 20% 10% 9% 59% 5% 22% 18% 5% 5% 10. SUBSCRIBE TODAY! www.9 15% 15% 6% 27% 0% 42% -6% 12x 11x 0. CFO Charles Dockendorff (57) joined in ‘95. All rights reserved. • M&A “an important part” of growth strategy. with free cash flow of “$1. after returning $1.28 for FY12 (+8% y-y).23 483 -2% 1 Adjusted for unusual items of -$1. Adjusted for nonrecurring items of -$208 million in 2007.74 500 -1% 2011 11% 13% 0% 9% 11% 11. -$35 million in ‘09. BDX. including endomechanical instruments and energy devices. Covidien’s operating margin has barely expanded over the past five years. It was spun off from Tyco International in 2007. airway and ventilation products and other medical products.6 67% 17% 15% 31% 16% 14% 55% 6% 24% 15% 30% 15% 11% 18% 11% 10% 57% 5% 21% 17% 5% 4% 9. and it’s not clear why it should expand in the future.60 in FY13. INVESTMENT RISKS & CONCERNS • Long-term double-digit EPS growth target may prove unrealistic in light of an associated target for mid single-digit sales growth. Medical Devices (68% of revenue) provides endomechanical instruments. -$359 million in ‘09. Large competitors include JNJ.9 billion or higher” in FY12. POTENTIAL CATALYSTS • Better-than-expected revenue and earnings growth in FY12 (guidance appears conservative) • Pharmaceuticals segment spin off by mid-2013 (pharma sales have stagnated in recent years) MAJOR HOLDERS Management 1% | FMR 5% | JPM 4% | T Rowe 3% SELECTED OPERATING DATA FYE September 30 2007 2008 ∆ revenue 12% 6% ∆ gross profit 10% 12% ∆ assets 30% -13% ∆ book value -22% 15% ∆ BV per share -22% 14% Revenue ($bn) 9. © 2008-2012 by BeyondProxy LLC. 58% 58% Other Americas 5% 6% Europe 26% 29% Asia Pacific 11% 12% % of medical device revenue by product: Endomechanical 33% 33% Energy devices 12% 14% Soft tissue repair 12% 13% Vascular products 9% 8% Oximetry & monitoring 11% 11% Airway & ventilation 15% 14% Selected items as % of revenue: Gross profit 51% 54% R&D 3% 3% EBIT (adjusted)1 21% 21% Net income (adjusted)1. -$82 million in ‘08.83 493 -1% 1Q12 5% 8% 3% 10% 13% 2. and $69 million in ‘10.66 503 1% 2010 2% 3% 19% 12% 13% 10. but the shares have mostly stagnated.16 0. -$111 million in ‘11. alternate site facilities. becoming CEO in July 2011. • Management “comfortable” with consensus EPS estimate of $4. surgical products INVESTMENT HIGHLIGHTS • Medical device segment performing well.3 billion in 2007. as it appears aggressive. as price was a slight negative drag on growth in 2007-’11. • Aims to return 25-40% of free cash flow.3 8.000 employees. -$14 million in 1Q12.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW Covidien is an Ireland-based healthcare firm with 41. • Does not appear to have pricing power.35 billion or 80% of FCF in FY11. Jose Almeida (49) has been with Covidien since 1998.S. -$76 million in ‘10. producing an improved but still not compelling valuation. While management has executed reasonably well. The company will hire ~200 sales reps in Asia in 2012. Sales and profits have grown since the 2007 spin-off. • Emerging markets business growing in “double digits” off relatively low base (~$1 billion). 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 Covidien holds the former healthcare businesses of Tyco.

= revenue ∆ = change | Explanations: ∆ revenue = year-over-year change | EPS yield for this and next FY is based on consensus EPS estimates | EBIT adjusted for certain unusual items Source: Company and market data.378 28.8 billion plus Long-term investments at fair value discount of 50%: $292 million minus Total debt: $4.0x fair value P/E multiple) equals Estimated fair value of the common equity of Covidien: $36 billion ($74 per share) (based on 480 million shares out) 41% upside to the recent stock price ($53 per share) Aggressive Valuation methodology: Based on free cash flow for the twelve months ended December 30. or $26 per share (based on 480 million shares out) 52% downside from the recent stock price ($53 per share) Base Case Valuation methodology: Based on median consensus EPS estimate for the fiscal year ending September 29. ($000) 268 248 556 283 Operating Performance ∆ Rev. Bard / BCR Johnson & Johnson / JNJ Covidien / COV Trading Data ∆ to Reach 7-Year MV ($mn) Low High -36% -36% -28% -48% 21% 21% 13% 9% 16. All rights reserved. The Manual of Ideas analysis.237 7.907 176. ST investments: $1. 2011. or $100 per share (based on 480 million shares out) 89% upside to the recent stock price ($53 per share) (*) Represents Medical Equipment & Supplies industry median multiple. FY2007-FY2011 Adjusted free cash flow has remained remarkably stable throughout recent economic troubles.719 8. SUBSCRIBE TODAY! www. assumptions and estimates. Book/ MV 16% 9% 15% n/m Public Market Valuation EPS Yield LTM This Next Rev./ TTM FY FY EV 7% 4% 5% 7% 7% 7% 8% 8% 8% 7% 8% 9% 44% 36% 40% 41% Rev.7 billion divided by Industry median FCF yield: 4.049 164.0x equals Estimated fair enterprise value of Covidien: $15 billion plus Cash./ Empl. COVIDIEN – ANALYSIS OF SELECTED COMPARABLE COMPANIES (Click to visit relevant websites) Becton Dickinson / BDX C. operating income: $2. Last Gross Adj. The Manual of Ideas analysis.6% required FCF yield) equals Estimated fair value of the common equity of Covidien: $48 billion.com March 2012 – Page 90 of 169 .60 minus Assumed haircut to FY13 consensus EPS estimate: 5% * $4.manualofideas. Source: Company presentation dated January 2012.5 billion multiplied by Assumed fair value multiple: 6.5% (*) equals Industry FCF yield-implied fair value: $39 billion ($80 per share) multiplied by Assumed required FCF yield as a percentage of the industry FCF yield: 80% (3.2 billion minus Capex: $520 million equals Free cash flow: $1. © 2008-2012 by BeyondProxy LLC. 2011 ▼ Operating cash flow: $2. TTM Q Profit R&D EBIT 7% 6% 6% 11% 2% 5% 4% 5% 52% 62% 69% 57% 6% 6% 12% 5% 22% 29% 21% 22% Abbreviations: MV = market value | EV = enterprise value | TTM = trailing twelve months | FY = fiscal year | Empl.Value-oriented Equity Investment Ideas for Sophisticated Investors COVIDIEN – EQUITY FAIR VALUE UNDER SELECTED VALUATION SCENARIOS Conservative Valuation methodology: Based on revenue for the twelve months ended December 30. = employee | Rev. % TTM Rev. 2013 ▼ Consensus FY13 EPS estimate: $4.559 EV ($mn) 17.4 billion equals Estimated fair value of the common equity of Covidien: $12 billion.37 multiplied by Corresponding industry P/E: 16. and assumed normalized EBIT margin ▼ TTM net revenue: $12 billion multiplied by Assumed operating margin: 21.60 equals Revised FY13 EPS estimate: $4.R. COVIDIEN – CALCULATION OF FREE CASH FLOW.948 25.227 Tang.2x (*) equals Industry multiple-implied fair value: $34 billion ($71 per share) multiplied by Assumed COV multiple as a percentage of the industry multiple: 105% (17. Source: Company filings.0% equals Est.

FY2007-FY2011 ($ in millions) Pricing has not contributed to sales growth in recent years Source: Company presentation dated January 2012. © 2008-2012 by BeyondProxy LLC.com March 2012 – Page 91 of 169 . 100+ new products planned for launch over three years COVIDIEN – NEW PRODUCT ROADMAP. COVIDIEN – COMPONENTS OF SALES GROWTH. All rights reserved. FY2012-FY2014 Source: Company presentation dated January 2012.Value-oriented Equity Investment Ideas for Sophisticated Investors COVIDIEN – CASH RETURNED TO SHAREHOLDERS (dividends and gross repurchases). SUBSCRIBE TODAY! www. FY2008-FY2011 ($ in millions) Management aims to return 25%-40% of FCF to shareholders Source: Company presentation dated January 2012.manualofideas.

080 2. SUBSCRIBE TODAY! www.3% 2.82 n/a Month Ago $0.042 42% 12.11 3.76 (as of 2/24/12) 52-week range: $16.0% 1.00 0.62–$30.86 3.6% 6.25 11% 2009 3.Value-oriented Equity Investment Ideas for Sophisticated Investors CVR Energy (CVI) – Appaloosa .7% 11.51 6% LTME 9/30/11 5.67 www. except per share data) Revenue Gross profit Adjusted operating income Adjusted pretax income Adjusted net income Adjusted diluted EPS Dividend Shares out (avg) Cash from operations D&A Capex Free cash flow … % of revenue: Gross profit Adjusted operating income D&A Capex Cash.68 n/a Actual $1.1% 0.9% 899 1.com March 2012 – Page 92 of 169 . net Tangible assets Total current liabilities Debt Tangible equity TBV / tangible assets TBV per share EBIT/capital employed 2004 1.016 395 382 317 282 228 199 335 -114 288 215 -25 225 2.115 772 577 490 334 3.6% 15.95 3.9% 7. Icahn  Energy: Oil & Gas Operations Trading Data Price: $29.61 0.569 245 496 538 34% 6.00 86 85 85 49 37 11.04 16% 6.87 3.573 191 491 613 39% 7.26 0.83 0.6% 2.00 82 95 25 57 38 13.2% 0.94 4.29 2.0% 9.29 17% FQE 9/30/11 1.179 1.5x This quarter Next quarter FYE 12/31/11 FYE 12/30/12 FYE 12/30/13 LT growth EPS Surprise 11/2/11 Operating Performance and Financial Position ($ millions.007 1.84 0.com Valuation P/E FYE 12/31/10 P/E FYE 12/31/11 P/E FYE 12/30/12 P/E FYE 12/30/13 EV/ LTM revenue EV/ LTM EBIT P / tangible book Greenblatt Criteria LTM EBIT yield LTM pre-tax ROC 25% 46% n/m 8x 7x 8x 0.784 560 501 349 20% 4.042 42% 12.00 86 105 22 6 99 8.00 86 420 110 56 364 15.8% 200 1.6% 1.7% 9 1.136 363 209 101 72 0.643 220 506 630 38% 7.8% 6.741 135 111 102 68 0.0% 2.1% 0.00 86 225 87 32 193 6.6% 162 1.1% 31 1.8% 2005 2.00 0.699 266 477 648 38% 7.138 1.2% 1.cvrenergy.00 82 143 3 14 129 7. 281-207-3200 Consensus EPS Estimates Latest $0.57 # of Ests 4 4 4 4 3 n/a Estimate $1.00 86 86 86 187 146 83 51 61 82 240 269 87 -54 -123 -3 13.467 304 592 1.080 2.967 5.0% 9.42 32% Fiscal Years Ended December 31.31 0.04 88% Ten-Year Stock Price Performance and Trading Volume Dynamics $35 $30 $25 $20 $15 $10 $5 $0 Nov 02 Nov 03 Nov 04 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 © 2008-2012 by BeyondProxy LLC. 2006 2007 2008 3.9% 2.38 0.081 1.35 0.137 228 499 35 3% 0. investments PP&E.031 89 51 36 23 0.11 Market value: $2.467 304 592 1.72 0.4x 4x 2.86 0.4% 0.093 1.352 251 212 189 109 1.27 0.192 1.01 27% 12.3% 2.6% 37 1.6% 1.7% 1.00 87 183 22 26 158 18.365 230 775 -1 0% -0.7% 2.manualofideas.6% 4.1% 899 1.6 million Ownership Data Insider ownership: 2% Insider buys (last six months): 17 Insider sales (last six months): 12 Institutional ownership: 100% SUGAR LAND TX. All rights reserved.3 billion Shares outstanding: 86.3% 1.10 15% 2010 4.04 46% FQE 9/30/10 1.28 2.7% 2.3% 4.6 billion Enterprise value: $2.080 271 92 44 30 0.038 2.50 -0.7% 1.1% 11.435 333 271 -86 -59 -0.4% 65 773 1.7% 7.1% 1.9% 42 1.

perhaps suggesting an expectation that the company will indeed be sold or broken into separate firms. The facility includes a 1. likely in an attempt to provide an alternative way to return some value to shareholders.136 93% 7% 170 49 6% 23% 12% 7% 3% 2% 3% 2% 1. Icahn has stated the value of CVR is at least $37 per share. All rights reserved.08 per share quarterly dividend and stated an intention to sell a portion of its investment in CVR Partners. -$16 million in 2010.22 -0. CVR has yet to make a recommendation on the offer to shareholders on the Icahn offer. We would reevaluate CVR in case Icahn’s bid failed and the company’s shares declined materially in price.699 12% 5% 15% 64% 9% 0% 28% 19% 38% 0. • Nitrogen fertilizer business consists of a fertilizer manufacturing facility that is the only operation in North America that utilizes a petroleum coke. The company also owns the GP and ~70% of the common units of CVR Partners. making this a special situation that is difficult to assess on investment merit alone. net 74% 67% Payables 10% 10% ST debt 0% 1% LT debt 56% 27% Other LT liabilities 27% 22% Tangible equity 0% 20% Diluted EPS (cont. -$2. MAJOR HOLDERS CEO <1% | Other insiders 10% | Appaloosa 6% | DFA 4% | Icahn 14% | Steadfast 4% | Corvex 3% | Gilder Gagnon 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 Carl Icahn has put refiner CVR Energy in play.2 million barrels of associated company-owned storage tanks. INVESTMENT RISKS & CONCERNS • If Icahn bid unravels. gasification process to produce nitrogen fertilizer.134 96% 4% 105 20 3% 11% 7% 2% 1% 1% 2% 1% 1. -$43 million in 2007. In April 2011.80 – 8 15 110 86 0% YTD 2010 9/30/11 30% 75% -25% 386% 8% 49% 5% 61% 5% 61% 4.573 2% 4% 17% 72% 7% 1% 30% 19% 39% 0. an unlikely scenario given Icahn’s formal tender offer. with 1.467 36% 4% 13% 44% 8% 0% 24% 21% 42% 3. • Petroleum business includes 115.) ($) 2.7 million in 2009.1 million YTD’11.90 – 7 7 88 86 0% 2009 -37% 14% 0% 13% 13% 3. SUBSCRIBE TODAY! www.038 2. capital-intensive businesses. and (3) a 145.S. a partnership that acts as an independent producer and marketer of upgraded nitrogen fertilizer products in North America. • Operates in cyclical. • CVR initiated an $0.000 bpd complex full coking medium-sour crude refinery in Coffeyville.784 Selected items as % of tangible assets: Cash.016 95% 5% 32 117 1% 44% 6% 4% 6% 4% 2% 2% 1. (2) a rack marketing division.025 ton-per-day UAN unit.225 ton-per-day ammonia unit and 2. Icahn also intends to nominate nine directors to the Board. Whether Icahn’s ultimate goal is to acquire CVR or drive it into the hands of a strategic buyer is unclear. Potential buyers include larger competitors Valero (VLO) and Tesoro (TSO). Management does not view a separation of the refining and fertilizer businesses as a move that would enhance value for shareholders. © 2008-2012 by BeyondProxy LLC. -$61 million in 2008. raising $353 million. CVR shares could fall materially as they traded below $20 in December. the partnership completed an IPO.Value-oriented Equity Investment Ideas for Sophisticated Investors BUSINESS OVERVIEW CVR is an independent petroleum refiner and marketer of high value transportation fuels in the mid-continental U.com March 2012 – Page 93 of 169 .71 – 13 21 450 86 0% Adjusted for unusual items of -$23 million in 2006.365 1. and Icahn unsolicited tender offer appears structured in a way that essentially invites a strategic buyer to acquire CVR for $37 per share.080 5. or pet coke. We find it difficult to assess the probabilities associated with various potential outcomes of this fluid situation and therefore find ourselves on the sidelines. investments 3% 2% Receivables 7% 11% Inventory 12% 14% PP&E. CVR’s stock price has appreciated to nearly $30 per share. Kansas. POTENTIAL CATALYSTS • $30 Icahn bid draws in additional bidders for CVR SELECTED OPERATING DATA FYE December 31 2006 2007 ∆ revenue 25% -2% ∆ gross profit 19% -3% ∆ assets 19% 29% ∆ book value -30% 419% ∆ BV per share -34% 418% Revenue ($mn) 3.manualofideas. CVR also owns (1) a 35. LP (NYSE: UAN).000 bpd crude oil gathering system.16 – 8 19 633 86 0% 95% 5% 469 94 12% 43% 16% 13% 11% 6% 1% 1% 2. -$4. though the latter appears to be more likely.967 % of revenue by segment: Petroleum refining 95% 94% Nitrogen fertilizer 5% 6% Operating income by segment ($mn): Petroleum refining 246 145 Nitrogen fertilizer 37 47 Operating margin by segment: Petroleum refining 9% 5% Nitrogen fertilizer 23% 28% Selected items as % of revenue: Gross profit 13% 13% EBIT (adjusted)1 9% 8% Pretax income (adjusted)1 11% -4% Net income (adjusted)1 7% -1% D&A 2% 2% Capex 8% 9% Tangible assets ($mn) 1. INVESTMENT HIGHLIGHTS • Carl Icahn commenced a hostile tender offer for the company at $30 per share on February 23.78 Dividends per share ($) – – BV per share (end) ($) 1 5 Share price (end) ($) 25 4 Volume (mn shares) 26 138 Shares out (avg) (mn) 86 86 ∆ shares out (avg) 6% 0% 1 2008 69% -17% -14% 34% 34% 5.000 bpd pipeline system that transports crude to the refinery.569 1% 8% 9% 75% 7% 1% 31% 20% 34% 1.

2012. 2012. SUBSCRIBE TODAY! www. © 2008-2012 by BeyondProxy LLC.Value-oriented Equity Investment Ideas for Sophisticated Investors CVR ENERGY – PRO FORMA SNAPSHOT Source: Company presentation dated February 8. All rights reserved.manualofideas.com March 2012 – Page 94 of 169 . CVR ENERGY – PRO FORMA ORGANIZATIONAL STRUCTURE Carl Icahn’s unsolicited bid for CVR Energy could lead to a separate strategic transaction that highlights the value of the refining and fertilizer businesses. Source: Company presentation dated February 8.

including Tesoro and Western Refining. 2008-2011 ($ in millions) Source: Company presentation dated February 8. SUBSCRIBE TODAY! www. 2012. CVR ENERGY – COMBINED COMPANY OPERATING EXPENSE DATA CVR Energy has lower operating costs than most competitors. © 2008-2012 by BeyondProxy LLC. All rights reserved.Value-oriented Equity Investment Ideas for Sophisticated Investors CVR ENERGY – CALCULATION OF ADJUSTED EBITDA.manualofideas. BY SEGMENT. 2012. Source: Company presentation dated February 8.com March 2012 – Page 95 of 169 .

470 2.454 3.693 1.656 2.63 17.18 2.523 3.008 8.818 9.291 1. All rights reserved.823 5.365 10.146 1.583 1.656 2.49 2. investments Receivables Inventory LT investments PP&E.031 3.492 1.751 747 4.47 0.293 851 5.36 Market value: $31.240 3.6% 11.4% 14.949 1.852 22.0% 5.136 1.1% 14.18 6.776 2.1% 1.66 LTME 2/3/12 62.1% 5.431 4.2% 4.99 FQE 2/3/12 16.778 1.867 6.323 21.373 663 3. SUBSCRIBE TODAY! www.365 10.602 1.223 1. Weitz  Technology: Computer Hardware.136 1.385 931 907 764 0.796.803 1.898 1.51 2.0% 1.838 11.133 61.672 21.1% 7. IVA .dell.240 3.222 3% 0.43 (as of 2/24/12) 52-week range: $13.43 1.838 11.90 1.070 5.69 FQE 1/28/11 15.404 4.354 2.639 1.953 32.9% 5.