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Value-oriented Equity Investment Ideas for Sophisticated Investors

A Monthly Publication of BeyondProxy LLC Subscribe at manualofideas.com If our efforts can further the goals of our members by giving them a discernible edge over other market participants, we have succeeded.

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.

THE SUPERINVESTOR ISSUE


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

Top Ideas In This Report


Ambassadors Group
(NYSE: EPAX) 68

Plus: Lisa Rapuanos guest write-up on Ambassadors Group Plus: Exclusive interview with John Lambert Plus: Favorite stock screens for value investors

Corning
(NYSE: GLW) .... 84

Xerox
(NYSE: XRX) 144

Also Inside
Editors 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 Months 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.

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)

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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 CHILDRENS 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 YEARS EPS ESTIMATES ................................................. 159 MAGIC FORMULA, BASED ON NEXT YEARS 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 MONTHS TOP 10 WEB LINKS ....................................................... 167

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Value-oriented Equity Investment Ideas for Sophisticated Investors

Editorial Commentary
With the February 15th institutional investor holdings SEC filing deadline behind us, we are pleased to bring you a new Superinvestor Issue of The Manual of Ideas. Weve 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)
$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. 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)
$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, 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 Cornings very strong balance sheet.
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Value-oriented Equity Investment Ideas for Sophisticated Investors

Xerox (NYSE: XRX, $8.30 per share; 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, 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 youll consider applying to attend next years 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 couldnt exist without Guys charisma and hospitality.

Well 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 Tilsons 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

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 portfolios mark-to-market performance and latest activity, click on the above-referenced link or type it into your web browser.

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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. 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 todays 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 companys choice to prepay a lot of future travel expenses. In 2010, however, working capital was positive. So lets leave working capital aside for this exercise. The companys 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.

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Value-oriented Equity Investment Ideas for Sophisticated Investors

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 didnt 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
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In light of the underlying cash generation potential and asset value of [BP], we feel it is significantly undervalued at the current price.

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 dont 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 companys assets appear materially undervalued at the current highly depressed
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[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

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?

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.

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 ones 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 cant be a good investment if bought cheaply enough. MOI: John, thanks very much for sharing your ideas and insights.

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Online Only: Three Exclusive Interviews


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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 Londonbased Metropolis Valuefund, http://youtu.be/RCfxtmxlfco

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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. We present the holdings of some of the worlds 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 investors top ten ideas right now? Rather than simply presenting each investors largest holdings as of the recently filed quarter end, the MOIs proprietary methodology ranks the companies in each investors portfolio based on the investors 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 investors 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 investors 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, Intl 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, Childrens 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

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March 2012 Page 12 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 11,878 3,925 10,335 24,875 50,284 194,903 1,403 69 6,777 10,709 Price Recent ($) 51.95 407.96 86.83 63.29 396.14 117,980 97.01 2.91 29.91 83.45 from Dec. 30 9% -2% 4% 5% 6% 3% -1% -4% -2% 4% Shares Owned Recent (000) 1,501 135 734 1,387 192 0 492 477 806 550 from Sep. 30 >100% 2% 2% 1% 2% >100% 5% >100% 0% 2% Holdings as % of Co. <1% 1% <1% <1% <1% <1% 3% 2% <1% <1% Fund* 12% 8% 10% 13% 12% 4% 7% 0% 4% 7% P/E (Est.) 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. Book 8.2x 1.6x 8.1x n/m >9.9x 2.0x 1.3x 1.4x 2.6x 5.1x

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.A Enstar Group / ESGR Primo Water / PRMW CarMax / KMX OReilly Automotive / ORLY

Top Holdings of Akre Capital By Dollar Value


Market Value ($mn) 24,875 11,878 50,284 10,335 3,925 1,403 10,709 2,956 194,903 6,777 Price Recent ($) 63.29 51.95 396.14 86.83 407.96 97.01 83.45 31.80 117,980 29.91 from Dec. 30 5% 9% 6% 4% -2% -1% 4% 16% 3% -2% Shares Owned Recent (000) 1,387 1,501 192 734 135 492 550 1,282 0 806 from Sep. 30 1% >100% 2% 2% 2% 5% 2% -11% >100% 0% Holdings as % of Co. <1% <1% <1% <1% 1% 3% <1% 1% <1% <1% Fund* 13% 12% 12% 10% 8% 7% 7% 6% 4% 4% P/E (Est.) 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. Book n/m 8.2x >9.9x 8.1x 1.6x 1.3x 5.1x n/m 2.0x 2.6x

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 OReilly Automotive / ORLY Lamar Advertising / LAMR Berkshire Hathaway / BRK.A CarMax / KMX

New Positions
Exxon Mobil / XOM

Sold Out Positions


Middleburg Financial / MBRG

Portfolio Metrics
Portfolio size

Sector Weightings
$654 million 83% $9.3 billion $46 billion 18x 15x 2.7x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

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March 2012 Page 13 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 2,189 1,242 2,877 203 250 354 715 2,591 Price Recent ($) 13.57 5.39 37.60 1.65 8.51 6.52 9.09 47.08 from Dec. 30 -7% 37% 18% -40% 38% 4% -2% 14% Shares Owned Recent (000) 3,566 6,138 1,134 6,313 1,075 1,666 1,180 2,420 from Sep. 30 51% 50% 10% 40% 63% -20% -34% -29% Holdings as % of Co. 2% 3% 1% 5% 4% 3% 2% 4% Fund* 17% 12% 15% 4% 3% 4% 4% 40% P/E (Est.) 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. Book 1.3x .7x 2.4x .1x 7.7x 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 ($mn) 2,591 2,189 2,877 1,242 354 715 203 250 561 648 Price Recent ($) 47.08 13.57 37.60 5.39 6.52 9.09 1.65 8.51 10.10 11.90 from Dec. 30 14% -7% 18% 37% 4% -2% -40% 38% 15% 50% Shares Owned Recent (000) 2,420 3,566 1,134 6,138 1,666 1,180 6,313 1,075 418 68 from Sep. 30 -29% 51% 10% 50% -20% -34% 40% 63% -90% -90% Holdings as % of Co. 4% 2% 1% 3% 3% 2% 5% 4% <1% <1% Fund* 40% 17% 15% 12% 4% 4% 4% 3% 1% 0% P/E (Est.) 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. Book n/m 1.3x 2.4x .7x n/m n/m .1x 7.7x 2.8x 3.7x

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 $1.2 billion 18x 19x 2.6x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

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March 2012 Page 14 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 3,244 460,050 197,003 14,310 31,888 6,306 190 1,809 4,392 2,379 Price Recent ($) 41.47 493.42 605.91 47.91 17.75 58.59 16.66 26.33 21.15 92.67 from Dec. 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. 30 new new 23% 7% new new 0% 49% new 0% Holdings as % of Co. <1% <1% <1% <1% <1% <1% 5% <1% <1% <1% Fund* 7% 11% 11% 9% 5% 2% 4% 4% 3% 6% P/E (Est.) 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. Book 8.4x 5.4x 4.0x n/m >9.9x n/m 1.1x 1.8x n/m 4.4x

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. / TK Level 3 Comms / LVLT Credit Acceptance / CACC

Top Holdings of Teton Capital / Ancient Art By Dollar Value


Market Value ($mn) 460,050 197,003 255,877 14,310 3,244 2,379 19,597 31,888 13,172 190 Price Recent ($) 493.42 605.91 30.50 47.91 41.47 92.67 29.90 17.75 48.55 16.66 from Dec. 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. 30 new 23% -22% 7% new 0% -20% new 0% 0% Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% <1% 5% Fund* 11% 11% 9% 9% 7% 6% 5% 5% 5% 4% P/E (Est.) 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. Book 5.4x 4.0x 6.1x n/m 8.4x 4.4x n/m >9.9x n/m 1.1x

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% $4.4 billion $46 billion 14x 12x 1.8x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 28%

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March 2012 Page 15 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

Appaloosa (David Tepper)


Tepper heads Appaloosa Management, which he founded in 1993 after leaving Goldman Sachs, where he had been the head trader on Goldmans high-yield desk. Teppers specialty is in distressed investments and special situations. MOI Signal Rank Top Current Ideas of Appaloosa
Market Value ($mn) 460,050 8,785 143,211 26,145 1,964 1,147 3,392 8,806 8,806 9,861 Price Recent from ($) Dec. 30 493.42 22% 5.93 11% 28.50 11% 8.77 38% 10.69 -5% 22.26 10% 13.88 -2% 19.90 22% 19.90 22% 30.04 39% Shares Owned Recent from (000) Sep. 30 182 >100% 7,798 new 1,219 new 11,119 0% 6,179 -22% 1,289 -3% 6,057 -45% 1,275 -5% 1,275 -5% 229 new Holdings as % of Co. Fund* <1% 10% <1% 5% <1% 4% <1% 11% 3% 8% 3% 3% 2% 10% <1% 3% <1% 3% <1% 1% P/E (Est.) 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. Book 5.4x n/m >9.9x .3x n/m 2.5x >9.9x .4x .4x 9.0x

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 ($mn) 2,346 26,145 460,050 3,392 1,964 8,785 143,211 1,147 1,435 468 Price Recent from ($) Dec. 30 27.10 45% 8.77 38% 493.42 22% 13.88 -2% 10.69 -5% 5.93 11% 28.50 11% 22.26 10% 8.85 75% 2.99 23% Shares Owned Recent from (000) Sep. 30 5,005 -21% 11,119 0% 182 >100% 6,057 -45% 6,179 -22% 7,798 new 1,219 new 1,289 -3% 3,238 -65% 9,442 -11% Holdings as % of Co. Fund* 6% 16% <1% 11% <1% 10% 2% 10% 3% 8% <1% 5% <1% 4% 3% 3% 2% 3% 6% 3% P/E (Est.) 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. Book 2.3x .3x 5.4x >9.9x n/m n/m >9.9x 2.5x 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. (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% $6.1 billion $35 billion 11x 10x 2.3x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Technology 17%

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March 2012 Page 16 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 lifes travail) too seriously. MOI Signal Rank Top Current Ideas of Atlantic Investment Management
Market Value ($mn) 8,970 5,021 6,409 3,508 3,992 3,499 4,155 5,669 2,831 5,120 Price Recent ($) 83.75 76.13 115.35 43.98 24.28 49.85 54.02 37.50 48.68 41.38 from Dec. 30 12% -2% 16% 20% 25% 31% 37% 12% 4% 27% Shares Owned Recent (000) 2,230 2,248 1,614 3,300 8,240 590 600 748 369 300 from Sep. 30 new 23% 33% new 3% new new 4% 30% 71% Holdings as % of Co. 2% 3% 3% 4% 5% <1% <1% <1% <1% <1% Fund* 15% 14% 15% 12% 17% 2% 3% 2% 1% 1% P/E (Est.) 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. Book 7.9x n/m 5.6x 3.7x n/m 2.7x n/m n/m >9.9x 9.2x

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. / CR TRW Automotive / TRW

Top Holdings of Atlantic Investment Management By Dollar Value


Market Value ($mn) 3,992 8,970 6,409 5,021 5,019 3,508 4,155 3,499 5,669 3,419 Price Recent ($) 24.28 83.75 115.35 76.13 64.10 43.98 54.02 49.85 37.50 27.97 from Dec. 30 25% 12% 16% -2% 12% 20% 37% 31% 12% 62% Shares Owned Recent (000) 8,240 2,230 1,614 2,248 2,535 3,300 600 590 748 760 from Sep. 30 3% new 33% 23% -16% new new new 4% 1% Holdings as % of Co. 5% 2% 3% 3% 3% 4% <1% <1% <1% <1% Fund* 17% 15% 15% 14% 13% 12% 3% 2% 2% 2% P/E (Est.) 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. Book n/m 7.9x 5.6x n/m n/m 3.7x n/m 2.7x 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. / CW Jarden Corp. / JAH McKesson / MCK Nalco Holding / NLC Newell Rubbermaid / NWL Stanley Black Decker / SWK Timken / TKR

Portfolio Metrics
Portfolio size

Sector Weightings
$1.2 billion 96% $5.0 billion $6.5 billion 12x 11x 5.6x
Technology 14%

Other 5%

Top 10 as % of portfolio Median maret 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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Basic Materials 38%

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March 2012 Page 17 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 427 109 147 324 52 305 520 725 2,843 132 Price Recent ($) 22.51 29.95 5.25 10.58 5.10 61.28 27.53 40.65 33.57 6.84 from Dec. 30 -4% 11% 16% 24% 5% 7% 20% -6% 18% -2% Shares Owned Recent (000) 2,783 413 4,140 3,013 1,647 849 2,240 413 482 1,907 from Sep. 30 1% 1% 3% 15% 0% 0% 1% 12% 15% 0% Holdings as % of Co. 15% 11% 15% 10% 16% 17% 12% 2% <1% 10% Fund* 15% 3% 5% 8% 2% 12% 15% 4% 4% 3% P/E (Est.) 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. Book 1.8x n/m 8.6x n/m 1.6x >9.9x 5.6x 6.0x >9.9x .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. / ININ American Public Ed. / APEI Colfax / CFX Hallmark Financial / HALL

Top Holdings of Bares Capital Management By Dollar Value


Market Value ($mn) 427 520 305 324 147 725 766 2,843 455 132 Price Recent ($) 22.51 27.53 61.28 10.58 5.25 40.65 36.15 33.57 30.29 6.84 from Dec. 30 -4% 20% 7% 24% 16% -6% 19% 18% 16% -2% Shares Owned Recent (000) 2,783 2,240 849 3,013 4,140 413 460 482 457 1,907 from Sep. 30 1% 1% 0% 15% 3% 12% 16% 15% -42% 0% Holdings as % of Co. 15% 12% 17% 10% 15% 2% 2% <1% 3% 10% Fund* 15% 15% 12% 8% 5% 4% 4% 4% 3% 3% P/E (Est.) 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. Book 1.8x 5.6x >9.9x n/m 8.6x 6.0x 5.8x >9.9x 4.9x .9x

1 2 3 4 5 6 7 8 9 10

Company / Ticker INTL FCStone / INTL Interactive Intell. / ININ Winmark / WINA Dolan Media / DM Female Health / FHCO American Public Ed. / APEI Stratasys / SSYS Colfax / CFX Stamps.com / STMP Hallmark Financial / HALL

New Positions
Kinder Morgan Mgmt / KMR Travelzoo / TZOO

Sold Out Positions


American Dental / ADPI BIDZ.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 2.3x
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.com to request a free copy of Brians 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.

Technology 24%

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March 2012 Page 18 of 169

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.

2008-2012 by BeyondProxy LLC. All rights reserved.

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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 Moodys / 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 Berkshires 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.

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 21 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Warriors long-term performance record is believed to feature mid teens annualized investment returns.

MOI Signal Rank Top Current Ideas of Brave Warrior


Market Value ($mn) 197,003 14,310 73,362 1,448 55,363 143,211 15,905 1,601 92,635 15,430 Price Recent ($) 605.91 47.91 27.18 39.23 29.01 28.50 32.21 24.68 113.90 47.40 from Dec. 30 -6% 3% 15% 28% 7% 11% 14% 6% 12% 2% Shares Owned Recent (000) 299 4,360 4,923 2,086 2,959 1,028 1,422 1,684 274 2,157 from Sep. 30 3% 13% 4% new 3% new new 23% 7% -10% Holdings as % of Co. <1% 1% <1% 6% <1% <1% <1% 3% <1% <1% Fund* 14% 16% 10% 6% 7% 2% 4% 3% 2% 8% P/E (Est.) 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. Book 4.0x n/m n/m >9.9x 2.8x >9.9x >9.9x 1.2x >9.9x 4.1x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Google / GOOG Valeant Pharma / VRX Comcast / CMCSA VistaPrint / VPRT U.S. Bancorp / USB Oracle / ORCL Adobe Systems / ADBE Primerica / PRI Visa / V Motorola Solutions / MSI

Top Holdings of Brave Warrior By Dollar Value


Market Value ($mn) 14,310 197,003 9,047 73,362 15,430 55,363 1,448 15,699 8,922 50,284 Price Recent ($) 47.91 605.91 64.23 27.18 47.40 29.01 39.23 48.56 90.03 396.14 from Dec. 30 3% -6% 9% 15% 2% 7% 28% 4% 5% 6% Shares Owned Recent (000) 4,360 299 2,375 4,923 2,157 2,959 2,086 1,508 784 164 from Sep. 30 13% 3% -7% 4% -10% 3% new -41% -6% -40% Holdings as % of Co. 1% <1% 2% <1% <1% <1% 6% <1% <1% <1% Fund* 16% 14% 12% 10% 8% 7% 6% 6% 5% 5% P/E (Est.) 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. Book n/m 4.0x n/m n/m 4.1x 2.8x >9.9x n/m n/m >9.9x

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.S. Bancorp / USB VistaPrint / VPRT Aon / AON Lab Corp. 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
$1.3 billion 88% $16 billion $53 billion 14x 12x 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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Financial 23%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 22 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 93 12,681 6,409 6,365 687 5,019 1,924 5,656 4,921 6,008 Price Recent ($) 2.90 75.08 115.35 59.27 77.02 64.10 58.27 30.47 16.80 78.68 from Dec. 30 -24% 11% 16% 2% 13% 12% 2% -1% 3% 1% Shares Owned Recent (000) 5,935 807 1,026 1,562 388 354 397 1,633 7,166 733 from Sep. 30 0% 16% 6% 0% >100% new 0% -13% -8% -27% Holdings as % of Co. 18% <1% 2% 1% 4% <1% 1% <1% 2% <1% Fund* 2% 9% 17% 13% 4% 3% 3% 7% 17% 8% P/E (Est.) 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 1.3x n/m 5.6x 1.8x 2.6x n/m n/m n/m >9.9x >9.9x

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 ($mn) 4,921 6,409 6,365 12,681 6,008 1,807 5,656 3,829 687 1,924 Price Recent ($) 16.80 115.35 59.27 75.08 78.68 31.35 30.47 78.77 77.02 58.27 from Dec. 30 3% 16% 2% 11% 1% 5% -1% 5% 13% 2% Shares Owned Recent (000) 7,166 1,026 1,562 807 733 1,771 1,633 594 388 397 from Sep. 30 -8% 6% 0% 16% -27% -65% -13% -40% >100% 0% Holdings as % of Co. 2% 2% 1% <1% <1% 3% <1% 1% 4% 1% Fund* 17% 17% 13% 9% 8% 8% 7% 7% 4% 3% P/E (Est.) 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. Book >9.9x 5.6x 1.8x n/m >9.9x 4.0x n/m n/m 2.6x 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% $5.0 billion $5.2 billion 14x 12x 3.3x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Energy 13%

Capital Goods 20%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 23 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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
Market Value ($mn) 504 1,364 1,745 41,929 8,725 199 460,050 2,002 14,103 10,986 Price Recent ($) 8.06 30.96 56.40 39.73 62.76 8.74 493.42 28.33 12.33 7.92 from Dec. 30 15% 35% 24% 4% 14% -7% 22% 7% 0% -1%
2

1, 2

Shares Owned Recent (000) 550 235 120 90 60 150 7 125 420 450 from Sep. 30 >100% 42% 0% >100% 50% 88% 21% 0% -14% -18%

Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 6% 9% 9% 4% 5% 2% 4% 4% 7% 4%

P/E (Est.) 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.com / ACOM Coinstar / CSTR Medtronic / MDT Diamond Offshore / DO IDT Corp. / IDT Apple / AAPL Aspen Insurance / AHL Activision Blizzard / ATVI Xerox / XRX

Price/ Tang. Book .9x n/m 6.8x >9.9x 2.0x 3.8x 5.4x .6x 5.1x >9.9x

Excludes holdings of Tilson Dividend Fund, which is also managed by Zeke Ashton.
1, 2

Includes shares underlying LEAPs and other option positions.

Top Holdings of Centaur Value Fund By Dollar Value


Market Value ($mn) 31,888 1,364 1,745 14,103 504 106,953 711 8,725 460,050 41,929 Price Recent ($) 17.75 30.96 56.40 12.33 8.06 19.90 15.61 62.76 493.42 39.73

Shares Owned from Dec. 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.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. 30 -8% 42% 0% -14% >100% -54% -10% 50% 21% >100%

Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 10% 9% 9% 7% 6% 5% 5% 5% 4% 4%

P/E (Est.) 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. Book >9.9x n/m 6.8x 5.1x .9x 3.5x 1.2x 2.0x 5.4x >9.9x

Excludes holdings of Tilson Dividend Fund, which is also managed by Zeke Ashton.

Includes shares underlying LEAPs and other option positions.

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.F. Changs / PFCB Transatlantic Petro / TAT Western Digital / WDC
*

Portfolio Metrics
Portfolio size

Sector Weightings
$80 million 64% $1.7 billion $25 billion 14x 12x 1.8x
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. Excludes portfolio cash, certain non-U.S. holdings, and non-equity securities.

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March 2012 Page 24 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 9,861 2,650 10,874 2,221 8,357 695 39,896 659 3,244 Price Recent ($) 30.04 51.44 55.67 22.83 41.65 14.83 25.50 6.96 41.47 from Dec. 30 39% 3% 16% 4% 19% 3% 26% 32% 9% Shares Owned Recent (000) 12,116 2,107 1,550 10,768 9,397 2,229 1,242 3,956 45 from Sep. 30 new >100% >100% 0% 0% 0% 6% 0% 0% Holdings as % of Co. 4% 4% <1% 11% 5% 5% <1% 4% <1% Fund* 28% 8% 7% 19% 30% 3% 2% 2% 0% P/E (Est.) 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. Book 9.0x 2.6x >9.9x 1.5x 1.0x 2.2x n/m .4x 8.4x

1 2 3 4 5 6 7 8 9

Company / Ticker Delphi Automotive / DLPH 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 ($mn) 8,357 9,861 2,221 2,650 10,874 695 39,896 659 26,145 599 Price Recent ($) 41.65 30.04 22.83 51.44 55.67 14.83 25.50 6.96 8.77 21.50 from Dec. 30 19% 39% 4% 3% 16% 3% 26% 32% 38% 5% Shares Owned Recent (000) 9,397 12,116 10,768 2,107 1,550 2,229 1,242 3,956 1,508 162 from Sep. 30 0% new 0% >100% >100% 0% 6% 0% -41% -91% Holdings as % of Co. 5% 4% 11% 4% <1% 5% <1% 4% <1% <1% Fund* 30% 28% 19% 8% 7% 3% 2% 2% 1% 0% P/E (Est.) 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. Book 1.0x 9.0x 1.5x 2.6x >9.9x 2.2x n/m .4x .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 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
$1.3 billion 100% $3.2 billion $9.6 billion 13x 12x 1.9x
Consumer Cyclical 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
*

Services 12%

Financial 55%

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 25 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

Childrens Investment (Chris Hohn)


Chris Hohn is the founder of London-based The Childrens 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 Childrens Investment Fund
Market Value ($mn) 26,145 47,979 29,330 74,293 22,322 143,211 53,590 Price Recent ($) 8.77 19.18 54.25 41.45 64.17 28.50 111.63 from Dec. 30 38% 8% 2% 11% -3% 11% 5% Shares Owned Recent (000) 1,301 51,557 4,283 16,797 673 1,641 926 from Sep. 30 0% -4% -25% -12% -48% -39% -74% Holdings as % of Co. <1% 2% <1% <1% <1% <1% <1% Fund* 1% 47% 11% 33% 2% 2% 5% P/E (Est.) This FY n/a 14x n/a 14x 8x 12x 14x Next FY n/a 11x n/a 12x 8x 11x 12x Price/ Tang. Book .3x >9.9x n/m >9.9x >9.9x >9.9x 2.9x

1 2 3 4 5 6 7

Company / Ticker Royal Bank Scotland / RBS News Corp. / NWSA Viacom / VIA Walt Disney / DIS WellPoint / WLP Oracle / ORCL Union Pacific / UNP

Top Holdings of Childrens Investment Fund By Dollar Value


Market Value ($mn) 47,979 74,293 29,330 53,590 143,211 22,322 26,145 Price Recent ($) 19.18 41.45 54.25 111.63 28.50 64.17 8.77 from Dec. 30 8% 11% 2% 5% 11% -3% 38% Shares Owned Recent (000) 51,557 16,797 4,283 926 1,641 673 1,301 from Sep. 30 -4% -12% -25% -74% -39% -48% 0% Holdings as % of Co. 2% <1% <1% <1% <1% <1% <1% Fund* 47% 33% 11% 5% 2% 2% 1% P/E (Est.) This FY 14x 14x n/a 14x 12x 8x n/a Next FY 11x 12x n/a 12x 11x 8x n/a Price/ Tang. Book >9.9x >9.9x n/m 2.9x >9.9x >9.9x .3x

1 2 3 4 5 6 7

Company / Ticker News Corp. / 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
$2.1 billion 100% $39 billion $51 billion 14x 12x 2.9x

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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 90%

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March 2012 Page 26 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 7,374 194,903 81,797 142,909 162 181 759 100,338 159,577 71 Price Recent ($) 57.99 117,980 8.07 37.61 6.96 13.24 7.60 37.23 30.26 1.25 from Dec. 30 -4% 3% 45% 13% -11% 5% -22% 2% 10% 28% Shares Owned Recent (000) 635 0 8,950 1,279 2,310 451 1,294 410 998 1,584 from Sep. 30 0% 0% 40% 0% 0% new 29% 0% 0% >100% Holdings as % of Co. <1% <1% <1% <1% 10% 3% 1% <1% <1% 3% Fund* 8% 8% 17% 11% 4% 1% 2% 3% 7% 0% P/E (Est.) 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. Book n/m 2.0x .6x 1.2x >9.9x n/m 1.0x n/m 1.8x .2x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Watson Pharma / WPI Berkshire Hathaway / BRK.A Bank of America / BAC JPMorgan Chase / JPM Overstock.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 ($mn) 81,797 142,909 1,545 7,374 194,903 159,577 5,084 56,183 162 100,338 Price Recent ($) 8.07 37.61 15.28 57.99 117,980 30.26 47.57 114.12 6.96 37.23 from Dec. 30 45% 13% 5% -4% 3% 10% 50% 26% -11% 2% Shares Owned Recent (000) 8,950 1,279 2,659 635 0 998 584 165 2,310 410 from Sep. 30 40% 0% -1% 0% 0% 0% 21% 0% 0% 0% Holdings as % of Co. <1% <1% 3% <1% <1% <1% <1% <1% 10% <1% Fund* 17% 11% 9% 8% 8% 7% 6% 4% 4% 3% P/E (Est.) 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. Book .6x 1.2x .5x n/m 2.0x 1.8x 1.6x .9x >9.9x 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.A Wells Fargo / WFC Sears Holdings / SHLD Goldman Sachs / GS Overstock.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% $7.1 billion $38 billion 10x 8x 1.3x
Services 24% Health Care 13%

*, **

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. 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.

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 27 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 $5 billion in assets invested in equities. Curry has a long term-oriented investment approach and looks for out-of-favor companies that trade at a significant discount to intrinsic value. MOI Signal Rank Top Current Ideas of Eagle Capital Management
Market Value ($mn) 154,308 15,699 18,384 211,989 255,877 32,122 55,718 61,072 4,980 2,621 Price Recent ($) 67.94 48.56 61.20 61.90 30.50 107.16 53.32 87.14 36.21 306.00 from Dec. 30 -3% 4% 6% 4% 17% 0% 5% 7% 5% 7% Shares Owned Recent (000) 8,035 11,258 7,966 9,589 20,596 4,197 8,018 4,881 10,733 7 from Sep. 30 4% 6% 9% 4% 4% 3% 5% 7% 4% >100% Holdings as % of Co. <1% 3% 3% <1% <1% 1% <1% <1% 8% <1% Fund* 5% 5% 5% 6% 6% 4% 4% 4% 4% 0% P/E (Est.) 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. Book >9.9x n/m >9.9x 4.5x 6.1x >9.9x 2.0x 8.9x 1.3x 1.0x

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.R. Berkley / WRB Alleghany / Y

Top Holdings of Eagle Capital Management By Dollar Value


Market Value ($mn) 255,877 211,989 15,699 154,308 18,384 73,362 32,122 55,718 61,072 47,979 Price Recent ($) 30.50 61.90 48.56 67.94 61.20 27.18 107.16 53.32 87.14 19.18 from Dec. 30 17% 4% 4% -3% 6% 15% 0% 5% 7% 8% Shares Owned Recent (000) 20,596 9,589 11,258 8,035 7,966 17,933 4,197 8,018 4,881 21,095 from Sep. 30 4% 4% 6% 4% 9% -19% 3% 5% 7% -11% Holdings as % of Co. <1% <1% 3% <1% 3% <1% 1% <1% <1% <1% Fund* 6% 6% 5% 5% 5% 5% 4% 4% 4% 4% P/E (Est.) 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. Book 6.1x 4.5x n/m >9.9x >9.9x n/m >9.9x 2.0x 8.9x >9.9x

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. / NWSA

New Positions
Charles Schwab / SCHW Oracle / ORCL

Sold Out Positions


American Public Ed. / 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 2.5x
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. 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 28 of 169

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 Barrons Roundtable. She is a value-oriented equity investor and runs a concentrated portfolio. MOI Signal Rank Top Current Ideas of Eagle Value
Market Value ($mn) 7,840 1,331 2,888 4,155 9,861 1,063 1,053 4,803 779 177 Price Recent ($) 16.07 28.73 29.04 54.02 30.04 14.16 48.69 68.04 13.07 8.15 from Dec. 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. 30 0% 0% 0% 3% new 1% 0% 0% 0% 0% Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 9% 16% 10% 16% 3% 8% 8% 5% 3% 1% P/E (Est.) 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. Book 1.8x n/m 3.2x n/m 9.0x 2.4x 3.6x 6.2x 4.4x 2.2x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Calpine / CPN Macquarie Infrastr. / MIC Packaging Corp. / 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 ($mn) 1,331 4,155 2,591 2,888 7,840 1,053 1,063 4,803 779 9,861 Price Recent ($) 28.73 54.02 47.08 29.04 16.07 48.69 14.16 68.04 13.07 30.04 from Dec. 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. 30 0% 3% -23% 0% 0% 0% 1% 0% 0% new Holdings as % of Co. <1% <1% <1% <1% <1% <1% <1% <1% <1% <1% Fund* 16% 16% 15% 10% 9% 8% 8% 5% 3% 3% P/E (Est.) 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. Book n/m n/m n/m 3.2x 1.8x 3.6x 2.4x 6.2x 4.4x 9.0x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Macquarie Infrastr. / MIC Rockwood Holdings / ROC Six Flags / SIX Packaging Corp. / 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% $1.5 billion $3.8 billion 14x 12x 3.2x
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. 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 29 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 16,761 25,035 106,953 10,901 4,541 26,919 186,029 255,877 135,931 211,989 Price Recent ($) 12.95 70.30 19.90 60.84 14.33 55.71 29.57 30.50 26.70 61.90 from Dec. 30 21% 6% 10% 14% 14% 19% 19% 17% 10% 4% Shares Owned Recent (000) 16,498 1,393 17,626 3,249 19,577 5,421 11,176 9,853 8,111 19 from Sep. 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.) 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. Book 2.3x n/m 3.5x 5.2x 1.7x >9.9x 1.5x 6.1x 4.5x 4.5x

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.R. 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 ($mn) 106,953 186,029 26,919 255,877 4,541 135,931 16,761 10,901 81,797 25,035 Price Recent ($) 19.90 29.57 55.71 30.50 14.33 26.70 12.95 60.84 8.07 70.30 from Dec. 30 10% 19% 19% 17% 14% 10% 21% 14% 45% 6% Shares Owned Recent (000) 17,626 11,176 5,421 9,853 19,577 8,111 16,498 3,249 14,469 1,393 from Sep. 30 -12% -5% -3% -9% -13% -40% 4% -12% -10% -16% Holdings as % of Co. <1% <1% 1% <1% 6% <1% 1% 2% <1% <1% Fund* 14% 14% 12% 12% 12% 9% 9% 8% 5% 4% P/E (Est.) 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. Book 3.5x 1.5x >9.9x 6.1x 1.7x 4.5x 2.3x 5.2x .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.R. 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
$2.4 billion 99% $26 billion $77 billion 11x 10x 2.9x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Capital Goods 28%

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March 2012 Page 30 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 ESLs capital at rates of more than 25% per annum for many years. His largest investment was the much-publicized taking control of Kmart during Kmarts 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 Value ($mn) 659 4,767 22,193 2,887 10,543 8,357 4,288 13,937 5,084 Price Recent ($) 6.96 36.11 48.28 44.00 21.59 41.65 8.74 354.10 47.57 from Dec. 30 32% -2% 14% 17% 16% 19% 33% 9% 50% Shares Owned Recent (000) 2,695 54,410 5,094 1,653 31,172 5,135 9,412 2,969 48,031 from Sep. 30 41% -12% -14% -12% -14% -11% -13% -67% 0% Holdings as % of Co. 3% 41% 1% 3% 6% 3% 2% 8% 45% Fund* 0% 29% 4% 1% 10% 3% 1% 15% 34% P/E (Est.) 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. Book .4x 7.5x 1.4x 3.9x 4.2x 1.0x .3x n/m 1.6x

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 ($mn) 5,084 4,767 13,937 10,543 22,193 8,357 11,754 4,288 2,887 659 Price Recent ($) 47.57 36.11 354.10 21.59 48.28 41.65 26.20 8.74 44.00 6.96 from Dec. 30 50% -2% 9% 16% 14% 19% 60% 33% 17% 32% Shares Owned Recent (000) 48,031 54,410 2,969 31,172 5,094 5,135 6,977 9,412 1,653 2,695 from Sep. 30 0% -12% -67% -14% -14% -11% -28% -13% -12% 41% Holdings as % of Co. 45% 41% 8% 6% 1% 3% 2% 2% 3% 3% Fund* 34% 29% 15% 10% 4% 3% 3% 1% 1% 0% P/E (Est.) 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. Book 1.6x 7.5x n/m 4.2x 1.4x 1.0x 4.9x .3x 3.9x .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
$6.8 billion 100% $9.4 billion $29 billion 12x 11x 1.8x

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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

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March 2012 Page 31 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Fairfaxs 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 Value ($mn) 135,931 176,413 162 8,087 1,545 4,392 4,020 338 55,363 159,577 Price Recent ($) 26.70 64.60 6.96 15.44 15.28 21.15 4.04 22.72 29.01 30.26 from Dec. 30 10% -1% -11% 6% 5% 24% -22% 4% 7% 10% Shares Owned Recent (000) 11,500 5,947 3,389 12,798 17,504 12,931 18,620 970 4,448 4,512 from Sep. 30 new 15% 0% 8% 0% 0% 0% 0% 0% 0% Holdings as % of Co. <1% <1% 15% 2% 17% 6% 2% 7% <1% <1% Fund* 14% 18% 1% 9% 12% 13% 3% 1% 6% 6% P/E (Est.) 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. Book 4.5x 6.5x >9.9x 1.1x .5x n/m n/m 1.1x 2.8x 1.8x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Intel / INTC Johnson & Johnson / JNJ Overstock.com / OSTK Research In Motion / RIMM AbitibiBowater / ABH Level 3 Comms / LVLT Frontier Comms / FTR Baldwin & Lyons / BWINB U.S. Bancorp / USB Wells Fargo / WFC

Top Holdings of Fairfax By Dollar Value


Market Value ($mn) 176,413 135,931 4,392 1,545 8,087 31,888 159,577 55,363 1,473 4,020 Price Recent ($) 64.60 26.70 21.15 15.28 15.44 17.75 30.26 29.01 13.99 4.04 from Dec. 30 -1% 10% 24% 5% 6% 21% 10% 7% 38% -22% Shares Owned Recent (000) 5,947 11,500 12,931 17,504 12,798 9,152 4,512 4,448 6,794 18,620 from Sep. 30 15% new 0% 0% 8% -60% 0% 0% 0% 0% Holdings as % of Co. <1% <1% 6% 17% 2% <1% <1% <1% 6% 2% Fund* 18% 14% 13% 12% 9% 7% 6% 6% 4% 3% P/E (Est.) 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. Book 6.5x 4.5x n/m .5x 1.1x >9.9x 1.8x 2.8x 9.4x 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. Bancorp / USB USG / USG Frontier Comms / FTR

New Positions
Intel / INTC
*

Sold Out Positions


None
*, **

Portfolio Metrics
Portfolio size

Sector Weightings
$2.2 billion 93% $4.2 billion $38 billion 12x 12x 1.8x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 19%

**

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

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 32 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 81,797 159,577 2,303 1,489 50,633 194,903 8,357 7,137 3,189 Price Recent ($) 8.07 30.26 11.92 16.14 26.66 117,980 41.65 29.18 17.50 from Dec. 30 45% 10% 3% 10% 15% 3% 19% 28% 33% Shares Owned Recent (000) 112,753 850 46,531 26,185 116,574 6 18,617 18,279 52 from Sep. 30 1% 87% -4% -1% -7% -35% -4% -1% 0% Holdings as % of Co. 1% <1% 24% 28% 6% <1% 9% 7% <1% Fund* 12% 0% 7% 5% 39% 9% 10% 7% 0% P/E (Est.) 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. Book .6x 1.8x 1.0x 1.7x .6x 2.0x 1.0x 1.2x .7x

1 2 3 4 5 6 7 8 9

Company / Ticker Bank of America / BAC Wells Fargo / WFC MBIA / MBI St. Joe / JOE AIG / AIG Berkshire Hathaway / BRK.A CIT Group / CIT Leucadia National / LUK Assured Guaranty / AGO

Top Holdings of Fairholme By Dollar Value


Market Value ($mn) 50,633 81,797 8,357 5,084 194,903 2,303 7,137 1,489 96,263 159,577 Price Recent ($) 26.66 8.07 41.65 47.57 117,980 11.92 29.18 16.14 32.93 30.26 from Dec. 30 15% 45% 19% 50% 3% 3% 28% 10% 25% 10% Shares Owned Recent (000) 116,574 112,753 18,617 16,108 6 46,531 18,279 26,185 2,110 850 from Sep. 30 -7% 1% -4% -1% -35% -4% -1% -1% -92% 87% Holdings as % of Co. 6% 1% 9% 15% <1% 24% 7% 28% <1% <1% Fund* 39% 12% 10% 10% 9% 7% 7% 5% 1% 0% P/E (Est.) 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. Book .6x .6x 1.0x 1.6x 2.0x 1.0x 1.2x 1.7x .7x 1.8x

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.A MBIA / MBI Leucadia National / LUK St. 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.A Telefonica / TEF Verizon / VZ Vodafone / VOD Winthrop Realty / FUR Regions Financial / RF

Portfolio Metrics
Portfolio size

Sector Weightings
$7.9 billion 99% $56 billion $72 billion 10x 9x 1.2x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

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March 2012 Page 33 of 169

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 Cohens SAC Capital. MOI Signal Rank Top Current Ideas of Force Capital Management
Market Value ($mn) 23,152 659 5,084 499 3,790 1,966 10,324 33,932 12,742 628 Price Recent ($) 22.05 6.96 47.57 12.38 36.84 47.14 14.76 27.09 74.63 9.23 from Dec. 30 5% 32% 50% -9% -4% 15% 6% 7% 10% 15% Shares Owned Recent (000) 685 3,591 1,308 164 188 379 377 461 156 304 from Sep. 30 new 49% 74% >100% new 25% new new new >100% Holdings as % of Co. <1% 4% 1% <1% <1% <1% <1% <1% <1% <1% Fund* 4% 7% 16% 1% 2% 5% 1% 3% 3% 1% P/E (Est.) 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. Book 2.7x .4x 1.6x .8x 3.0x 1.7x 4.0x 2.0x 2.8x .6x

1 2 3 4 5 6 7 8 9 10

Company / Ticker CSX Corp. / CSX iStar Financial / SFI Sears Holdings / SHLD State Auto Financial / STFC Williams-Sonoma / WSM Alexander & Baldwin / ALEX Staples / SPLS Lowes / LOW Can. Pacific Railway / CP Ashford Hospitality / AHT

Top Holdings of Force Capital Management By Dollar Value


Market Value ($mn) 5,084 1,019 659 3,025 6,306 81,797 1,966 1,456 6,674 23,152 Price Recent ($) 47.57 11.76 6.96 46.47 58.59 8.07 47.14 32.40 74.83 22.05 from Dec. 30 50% 15% 32% -3% 3% 45% 15% 26% 12% 5% Shares Owned Recent (000) 1,308 3,023 3,591 514 388 2,267 379 538 215 685 from Sep. 30 74% -5% 49% -46% -14% -10% 25% 6% -9% new Holdings as % of Co. 1% 3% 4% <1% <1% <1% <1% 1% <1% <1% Fund* 16% 9% 7% 6% 6% 5% 5% 5% 4% 4% P/E (Est.) 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. Book 1.6x 1.0x .4x 8.7x n/m .6x 1.7x 4.7x 1.2x 2.7x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Sears Holdings / SHLD First Indust. 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. / CSX

New 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 Lowes / LOW News Corp. / 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.C. Penney / JCP Lamar Advertising / LAMR Shutterfly / SFLY TransDigm / TDG WABCO Holdings / WBC Winthrop Realty / FUR

Portfolio Metrics
Portfolio size

Sector Weightings
$384 million 66% $2.0 billion $9.3 billion 17x 16x 1.8x
Transportation 14% Financial 8%

Top 10 as % of portfolio Median maret value Average market value Median P/E (this FY) Median P/E (next FY) Median P / tangible book
*

Other 10%

Services 68%

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 34 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 453 5,019 653 10,901 1,859 28 210 4,996 209 2,096 Price Recent ($) 30.07 64.10 17.77 60.84 15.88 0.71 12.39 27.07 15.63 22.60 from Dec. 30 15% 12% 18% 14% 19% -24% 1% 5% -2% 17% Shares Owned Recent (000) 1,880 935 3,261 748 3,582 2,242 1,118 882 1,212 898 from Sep. 30 new 6% 2% 89% >100% 8% 50% new 0% new 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.) 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. Book n/m n/m 2.3x 5.2x >9.9x .6x 1.0x n/m 1.2x 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. / RELL Xylem / XYL Vishay Precision / VPG ITT Corp. / ITT

Top Holdings of Gates Capital By Dollar Value


Market Value ($mn) 3,419 4,048 7,851 5,019 653 1,859 818 453 3,548 10,901 Price Recent ($) 27.97 54.83 83.97 64.10 17.77 15.88 16.77 30.07 60.98 60.84 from Dec. 30 62% 19% 11% 12% 18% 19% 15% 15% 20% 14% Shares Owned Recent (000) 4,348 1,267 761 935 3,261 3,582 3,378 1,880 890 748 from Sep. 30 -13% -23% -27% 6% 2% >100% -1% new -18% 89% Holdings as % of Co. 4% 2% <1% 1% 9% 3% 7% 12% 2% <1% Fund* 13% 8% 7% 6% 6% 6% 6% 6% 6% 5% P/E (Est.) 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. Book n/m >9.9x n/m n/m 2.3x >9.9x n/m n/m 6.5x 5.2x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Solutia / SOA W.R. 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.W. Scripps / SSP ITT Corp. / ITT Nortek / NTK Xylem / XYL

Sold Out Positions


C.R. Bard / BCR

Portfolio Metrics
Portfolio size

Sector Weightings
$924 million 70% $1.9 billion $3.0 billion 14x 13x 1.9x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Capital Goods 27%

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March 2012 Page 35 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

Glenview (Larry Robbins)


Larry Robbins founded Glenview after working for buyout specialist Leon Coopermans 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 Value ($mn) 96,263 14,029 21,002 1,415 9,078 12,149 181 8,922 6,860 10,986 Price Recent ($) 32.93 49.31 55.52 15.80 57.54 27.83 2.10 90.03 2.29 7.92 from Dec. 30 25% 10% 23% 17% -1% 26% 33% 5% -2% -1% Shares Owned Recent (000) 8,561 7,232 4,649 5,619 1,046 8,770 2,568 1,082 11,049 25,382 from Sep. 30 >100% 12% 8% >100% new 12% >100% 41% 24% 7% Holdings as % of Co. <1% 3% 1% 6% <1% 2% 3% 1% <1% 2% Fund* 5% 6% 4% 1% 1% 4% 0% 2% 0% 3% P/E (Est.) 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. Book .7x n/m n/m 5.1x n/m n/m 5.0x n/m n/m >9.9x

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. of America / LH Sprint Nextel / S Xerox / XRX

Top Holdings of Glenview Capital By Dollar Value


Market Value ($mn) 8,830 20,018 14,029 96,263 21,002 4,785 12,149 22,703 6,446 8,580 Price Recent ($) 49.55 81.34 49.31 32.93 55.52 6.97 27.83 49.25 39.25 28.65 from Dec. 30 27% 4% 10% 25% 23% 23% 26% 5% 20% 8% Shares Owned Recent (000) 13,781 4,613 7,232 8,561 4,649 36,934 8,770 4,475 5,409 7,325 from Sep. 30 -3% -22% 12% >100% 8% -11% 12% -24% -4% -8% Holdings as % of Co. 8% 2% 3% <1% 1% 5% 2% <1% 3% 2% Fund* 12% 6% 6% 5% 4% 4% 4% 4% 4% 4% P/E (Est.) 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. Book 1.9x >9.9x n/m .7x n/m 2.3x n/m >9.9x 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
$5.9 billion 52% $12 billion $22 billion 12x 11x 2.3x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 22%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 36 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 firms 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 Value ($mn) 19,597 2,819 2,996 6,306 3,481 Price Recent ($) 29.90 5.72 8.69 58.59 14.61 from Dec. 30 10% 12% 29% 3% 9% Shares Owned Recent (000) 469 12,257 1,530 66 993 from Sep. 30 new -9% -17% -85% -81% Holdings as % of Co. <1% 2% <1% <1% <1% Fund* 12% 61% 11% 3% 13% P/E (Est.) This FY 16x 13x 11x n/m 7x Next FY 13x 12x 10x >99x 7x Price/ Tang. Book n/m >9.9x .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 ($mn) 2,819 3,481 19,597 2,996 6,306 Price Recent ($) 5.72 14.61 29.90 8.69 58.59 from Dec. 30 12% 9% 10% 29% 3% Shares Owned Recent (000) 12,257 993 469 1,530 66 from Sep. 30 -9% -81% new -17% -85% Holdings as % of Co. 2% <1% <1% <1% <1% Fund* 61% 13% 12% 11% 3% P/E (Est.) This FY 13x 7x 16x 11x n/m Next FY 12x 7x 13x 10x >99x Price/ Tang. Book >9.9x n/m n/m .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. / 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 $6.9 billion 11x 10x 2.3x
Services 28%

Top 10 as % of portfolio Median maret 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. 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 37 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

Greenhaven (Ed Wachenheim)


Ed Wachenheim manages a $3+ billion value hedge fund with a long term-oriented, concentrated investment approach. MOI Signal Rank Top Current Ideas of Greenhaven Associates
Market Value ($mn) 26,112 33,932 19,039 29,961 20,785 15,340 74,005 8,774 392 69,879 Price Recent ($) 64.65 27.09 90.40 95.27 47.62 44.14 76.69 59.03 4.66 45.33 from Dec. 30 4% 7% 6% 14% -2% 26% 5% 7% -13% 8% Shares Owned Recent (000) 4,728 12,118 3,459 4,424 4,517 3,261 3,924 2,355 1,877 2,094 from Sep. 30 17% 9% 1% 1% >100% >100% 9% 5% 4% 34% Holdings as % of Co. 1% <1% 2% 1% 1% <1% <1% 2% 2% <1% Fund* 9% 10% 10% 13% 7% 4% 9% 4% 0% 3% P/E (Est.) 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. Book 1.7x 2.0x 4.0x 2.2x 2.3x 6.6x >9.9x >9.9x n/m 4.2x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Devon Energy / DVN Lowes / 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 ($mn) 29,961 33,932 61,072 19,039 26,112 74,005 20,785 7,324 15,340 8,774 Price Recent ($) 95.27 27.09 87.14 90.40 64.65 76.69 47.62 49.01 44.14 59.03 from Dec. 30 14% 7% 7% 6% 4% 5% -2% -11% 26% 7% Shares Owned Recent (000) 4,424 12,118 3,616 3,459 4,728 3,924 4,517 3,159 3,261 2,355 from Sep. 30 1% 9% -3% 1% 17% 9% >100% -2% >100% 5% Holdings as % of Co. 1% <1% <1% 2% 1% <1% 1% 2% <1% 2% Fund* 13% 10% 10% 10% 9% 9% 7% 5% 4% 4% P/E (Est.) 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. Book 2.2x 2.0x 8.9x 4.0x 1.7x >9.9x 2.3x 2.1x 6.6x >9.9x

1 2 3 4 5 6 7 8 9 10

Company / Ticker FedEx / FDX Lowes / 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. Independence / AMIC Lennox International / LII Mohawk Industries / MHK

Sold Out Positions


None

Portfolio Metrics
Portfolio size

Sector Weightings
$3.2 billion 82% $16 billion $30 billion 15x 13x 3.3x
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%

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 14%

Energy 17%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 38 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 236 77 39,896 460,050 31,888 255,877 9,861 11,754 10,986 10,589 Price Recent ($) 14.05 0.63 25.50 493.42 17.75 30.50 30.04 26.20 7.92 85.15 from Dec. 30 -11% -7% 26% 22% 21% 17% 39% 60% -1% 9% Shares Owned Recent (000) 10,733 27,169 19,009 1,464 14,100 15,171 8,195 14,449 16,952 980 from Sep. 30 0% 0% 29% 11% new 0% new 0% new new Holdings as % of Co. 64% 22% 1% <1% <1% <1% 2% 3% 1% <1% Fund* 3% 0% 9% 13% 4% 8% 4% 7% 2% 1% P/E (Est.) 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. Book >9.9x .9x n/m 5.4x >9.9x 6.1x 9.0x 4.9x >9.9x 2.6x

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 ($mn) 460,050 39,896 255,877 11,754 5,716 12,869 9,365 31,888 9,861 3,332 Price Recent ($) 493.42 25.50 30.50 26.20 25.43 55.80 16.05 17.75 30.04 21.14 from Dec. 30 22% 26% 17% 60% 0% 19% 16% 21% 39% 28% Shares Owned Recent (000) 1,464 19,009 15,171 14,449 12,153 5,052 17,374 14,100 8,195 9,611 from Sep. 30 11% 29% 0% 0% -5% 9% 4% new new -3% Holdings as % of Co. <1% 1% <1% 3% 5% 2% 3% <1% 2% 6% Fund* 13% 9% 8% 7% 5% 5% 5% 4% 4% 4% P/E (Est.) 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. Book 5.4x n/m 6.1x 4.9x 4.5x 1.7x 3.3x >9.9x 9.0x 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
$5.6 billion 64% $6.3 billion $26 billion 13x 11x 2.4x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 16%

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March 2012 Page 39 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

H Partners (Rehan Jaffer)


Rehan Jaffer honed his investment approach at Dan Loebs 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. Hes got a good nose. Hes very intelligent. So hes 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 Value ($mn) 153 786 536 2,591 4,048 Price Recent ($) 1.52 9.10 3.79 47.08 54.83 from Dec. 30 -12% 22% 13% 14% 19% Shares Owned Recent (000) 14,616 3,400 677 13,310 1,110 from Sep. 30 0% 2% 0% 0% 0% Holdings as % of Co. 14% 4% <1% 24% 2% Fund* 3% 4% 0% 84% 8% P/E (Est.) This FY 76x >99x 8x 84x 13x Next FY 19x 34x 7x 64x 12x Price/ Tang. Book n/m 1.8x n/m n/m >9.9x

Company / Ticker 1 2 3 4 5 Sealy Corp. / ZZ Boyd Gaming / BYD Cumulus Media / CMLS Six Flags / SIX W.R. Grace / GRA

Top Holdings of H Partners By Dollar Value


Market Value ($mn) 2,591 4,048 786 153 536 Price Recent ($) 47.08 54.83 9.10 1.52 3.79 from Dec. 30 14% 19% 22% -12% 13% Shares Owned Recent (000) 13,310 1,110 3,400 14,616 677 from Sep. 30 0% 0% 2% 0% 0% Holdings as % of Co. 24% 2% 4% 14% <1% Fund* 84% 8% 4% 3% 0% P/E (Est.) This FY 84x 13x >99x 76x 8x Next FY 64x 12x 34x 19x 7x Price/ Tang. Book n/m >9.9x 1.8x n/m n/m

Company / Ticker 1 2 3 4 5 Six Flags / SIX W.R. Grace / GRA Boyd Gaming / BYD Sealy Corp. / 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 $1.7 billion 40x 18x 1.8x

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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 89%

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March 2012 Page 40 of 169

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. 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 Value ($mn) 193 1,497 626 10,519 680 1,514 7,840 337 331 4,092 Price Recent ($) 5.34 28.91 13.26 73.55 4.88 7.05 16.07 11.38 3.64 33.85 from Dec. 30 -17% 6% 5% 18% 22% -33% -2% 14% 18% 18% Shares Owned Recent (000) 7,032 28,066 7,000 450 117,425 3,500 676 546 1,398 475 from Sep. 30 2% 0% 0% 0% 0% 30% 0% 0% 0% 0% Holdings as % of Co. 19% 54% 15% <1% 84% 2% <1% 2% 2% <1% Fund* 2% 50% 6% 2% 35% 2% 1% 0% 0% 1% P/E (Est.) 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. Book 1.7x n/m n/m 2.4x n/m 1.0x 1.8x .4x 2.3x 2.7x

1 2 3 4 5 6 7 8 9 10

Company / Ticker N.A. 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 ($mn) 1,497 680 626 193 10,519 1,514 4,092 7,840 337 331 Price Recent ($) 28.91 4.88 13.26 5.34 73.55 7.05 33.85 16.07 11.38 3.64 from Dec. 30 6% 22% 5% -17% 18% -33% 18% -2% 14% 18% Shares Owned Recent (000) 28,066 117,425 7,000 7,032 450 3,500 475 676 546 1,398 from Sep. 30 0% 0% 0% 2% 0% 30% 0% 0% 0% 0% Holdings as % of Co. 54% 84% 15% 19% <1% 2% <1% <1% 2% 2% Fund* 50% 35% 6% 2% 2% 2% 1% 1% 0% 0% P/E (Est.) 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. Book n/m n/m n/m 1.7x 2.4x 1.0x 2.7x 1.8x .4x 2.3x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Spectrum Brands / SPB Harbinger Group / HRG Crosstex Energy / XTXI N.A. 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. / FST Huntsman / HUN
*

Lone Pine Resources / LPR Research In Motion / RIMM WD-40 Company / WDFC
*, **

Portfolio Metrics
Portfolio size

Sector Weightings
$1.6 billion 99% $1.5 billion $2.8 billion 12x 12x 1.7x
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. 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.

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 41 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 521 570 222 2,140 3,874 21 1,239 5,773 251 2,971 Price Recent ($) 63.40 19.84 3.15 44.06 45.07 1.20 23.65 17.42 8.77 19.37 from Dec. 30 12% 11% 18% 33% -8% -7% -5% -15% 5% 6% Shares Owned Recent (000) 279 320 2,977 69 200 1,872 206 203 887 661 from Sep. 30 68% new 9% new 0% 0% 0% -31% 0% 0% Holdings as % of Co. 3% 1% 4% <1% <1% 11% <1% <1% 3% <1% Fund* 20% 7% 11% 3% 10% 3% 5% 4% 9% 14% P/E (Est.) 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. Book 2.9x 1.3x >9.9x >9.9x 2.0x .4x 2.8x >9.9x 2.3x .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 ($mn) 521 2,971 222 3,874 251 570 144 12,970 1,239 5,773 Price Recent ($) 63.40 19.37 3.15 45.07 8.77 19.84 2.35 17.78 23.65 17.42 from Dec. 30 12% 6% 18% -8% 5% 11% 28% 14% -5% -15% Shares Owned Recent (000) 279 661 2,977 200 887 320 2,182 288 206 203 from Sep. 30 68% 0% 9% 0% 0% new 0% -50% 0% -31% Holdings as % of Co. 3% <1% 4% <1% 3% 1% 4% <1% <1% <1% Fund* 20% 14% 11% 10% 9% 7% 6% 6% 5% 4% P/E (Est.) 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. Book 2.9x .9x >9.9x 2.0x 2.3x 1.3x .9x n/m 2.8x >9.9x

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 $4.2 billion 17x 12x 2.1x
Consumer NonCyclical 20%

Other 6%

Top 10 as % of portfolio Median maret 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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 35%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 42 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 197,003 14,310 39,896 10,207 2,719 13,413 17,128 4,392 2,238 699 Price Recent ($) 605.91 47.91 25.50 98.37 23.46 21.03 29.06 21.15 26.68 47.11 from Dec. 30 -6% 3% 26% 10% 30% 2% 8% 24% 11% -7% Shares Owned Recent (000) 85 1,988 1,380 457 1,619 451 961 2,106 330 688 from Sep. 30 68% 7% new 98% 63% new new 30% new 3% Holdings as % of Co. <1% <1% <1% <1% 1% <1% <1% 1% <1% 5% Fund* 7% 13% 5% 6% 5% 1% 4% 6% 1% 5% P/E (Est.) 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. Book 4.0x n/m n/m >9.9x 3.1x >9.9x 2.2x n/m 2.6x 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 ($mn) 14,310 4,048 2,504 197,003 12,869 10,207 4,392 5,886 2,719 39,896 Price Recent ($) 47.91 54.83 42.73 605.91 55.80 98.37 21.15 116.19 23.46 25.50 from Dec. 30 3% 19% 7% -6% 19% 10% 24% 21% 30% 26% Shares Owned Recent (000) 1,988 1,686 1,399 85 913 457 2,106 329 1,619 1,380 from Sep. 30 7% -2% -11% 68% -28% 98% 30% -15% 63% new Holdings as % of Co. <1% 2% 2% <1% <1% <1% 1% <1% 1% <1% Fund* 13% 13% 8% 7% 7% 6% 6% 5% 5% 5% P/E (Est.) 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. Book n/m >9.9x 9.0x 4.0x 1.7x >9.9x n/m n/m 3.1x n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Valeant Pharma / VRX W.R. Grace / GRA Carters / CRI Google / GOOG Ensco / ESV Sherwin-Williams / SHW Level 3 Comms / LVLT TransDigm / TDG Kronos Worldwide / KRO General Motors / GM

New Positions
Angies 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% $5.1 billion $28 billion 17x 12x 3.1x
Other 37%

Top 10 as % of portfolio Median maret 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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Health Care 18%

Basic Materials 19%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 43 of 169

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. Carl publishes an activist investing blog entitled The Icahn Report at www.icahnreport.com. MOI Signal Rank Top Current Ideas of Icahn Entities
Market Value ($mn) 3,164 203 20,961 15,430 1,709 605 1,586 1,773 3,870 1,543 Price Recent ($) 45.79 1.65 27.18 47.40 17.28 28.32 14.49 39.98 39.02 27.09 from Dec. 30 21% -40% 2% 2% 17% 18% 7% 9% 9% -28% Shares Owned Recent (000) 7,251 18,042 72,279 38,292 76,385 11,849 16,120 7,131 79,238 5,692 from Sep. 30 >100% 0% 10% 0% 1% 0% 0% 0% 0% >100% Holdings as % of Co. 10% 15% 9% 12% 77% 55% 15% 16% 80% 10% Fund* 3% 0% 16% 15% 11% 3% 2% 2% 25% 1% P/E (Est.) 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. Book n/m .1x 4.8x 4.1x n/m 2.0x 5.8x n/m 2.5x 3.5x

1 2 3 4 5 6 7 8 9 10

Company / Ticker Navistar / NAV Dynegy / DYN El Paso Corp. / 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 ($mn) 3,870 20,961 15,430 1,709 11,815 8,375 605 3,164 1,773 2,512 Price Recent ($) 39.02 27.18 47.40 17.28 39.45 31.54 28.32 45.79 39.98 17.17 from Dec. 30 9% 2% 2% 17% 2% 4% 18% 21% 9% 51% Shares Owned Recent (000) 79,238 72,279 38,292 76,385 30,193 26,362 11,849 7,251 7,131 14,382 from Sep. 30 0% 10% 0% 1% -10% 1% 0% >100% 0% 0% Holdings as % of Co. 80% 9% 12% 77% 10% 10% 55% 10% 16% 10% Fund* 25% 16% 15% 11% 10% 7% 3% 3% 2% 2% P/E (Est.) 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. Book 2.5x 4.8x 4.1x n/m 3.2x 3.0x 2.0x n/m n/m n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker Icahn Enterprises / IEP El Paso Corp. / 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% $1.8 billion $4.4 billion 16x 14x 3.1x
Capital Goods 17% Other 35%

*, **

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. 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.

Consumer Cyclical 18%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 44 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

International Value Advisers (Charles de Vaulx)


IVA was formed in 2007 and recently managed $16 billion. CIO Charles de Vaulx was previously portfolio manager of the First Eagle Global, Overseas, U.S. Value, Gold and Variable Funds. At First Eagle, de Vaulx was mentored by, and ultimately succeeded, Jean-Marie Eveillard. de Vaulx is a value investor in the tradition of Graham and Dodd. MOI Signal Rank Top Current Ideas of International Value Advisers
Market Value ($mn) 127,111 26,112 456 10,324 1,037 35 2,106 3,003 6,148 5,739 Price Recent ($) 53.65 64.65 10.13 14.76 23.17 23.90 96.98 389.02 16.32 66.93 from Dec. 30 5% 4% 32% 6% 20% 3% 9% 3% 3% 8% Shares Owned Recent (000) 5,721 4,743 12,380 12,586 3,370 115 788 530 2,588 856 from Sep. 30 17% 9% 0% 14% 39% 3% new 0% 27% 35% Holdings as % of Co. <1% 1% 28% 2% 8% 8% 4% 7% <1% <1% Fund* 6% 6% 3% 4% 2% 0% 2% 4% 1% 1% P/E (Est.) 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. Book 1.7x 1.7x >9.9x 4.0x n/m .0x 1.2x 5.0x 2.0x 2.5x

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 ($mn) 47,979 127,111 26,112 255,877 56,721 31,888 50,284 3,003 10,324 194,903 Price Recent ($) 19.18 53.65 64.65 30.50 28.70 17.75 396.14 389.02 14.76 117,980.00 from Dec. 30 8% 5% 4% 17% 11% 21% 6% 3% 6% 3% Shares Owned Recent (000) 16,633 5,721 4,743 8,769 9,186 13,571 547 530 12,586 2 from Sep. 30 -1% 17% 9% -16% -4% -16% -15% 0% 14% 0% Holdings as % of Co. <1% <1% 1% <1% <1% <1% <1% 7% 2% <1% Fund* 7% 6% 6% 6% 5% 5% 4% 4% 4% 4% P/E (Est.) 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. Book >9.9x 1.7x 1.7x 6.1x n/m >9.9x >9.9x 5.0x 4.0x 2.0x

1 2 3 4 5 6 7 8 9 10

Company / Ticker News Corp. / NWSA TOTAL / TOT Devon Energy / DVN Microsoft / MSFT Hewlett-Packard / HPQ Dell / DELL MasterCard / MA Washington Post / WPO Staples / SPLS Berkshire Hathaway / BRK.A

New Positions
Seacor Holdings / CKH

Sold Out Positions


Iron Mountain / IRM Vodafone / VOD
*

Portfolio Metrics
Portfolio size

Sector Weightings
$4.8 billion 52% $13 billion $39 billion 13x 11x 2.3x
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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

Services 31%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 45 of 169

Value-oriented Equity Investment Ideas for Sophisticated Investors

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 Value ($mn) 4,480 197,003 20,018 7,930 1,098 876 1,330 2,645 1,390 630 Price Recent ($) 68.56 605.91 16.14 16.30 28.36 11.32 25.39 26.61 30.69 11.10 from Dec. 30 32% -6% 0% 10% 36% 14% 10% 10% 19% 21% Shares Owned Recent (000) 687 130 3,490 3,389 777 2,104 252 821 494 364 from Sep. 30 >100% 0% 0% 0% new 16% new 0% 0% new Holdings as % of Co. 1% <1% <1% <1% 2% 3% <1% <1% 1% <1% Fund* 10% 16% 11% 11% 4% 5% 1% 4% 3% 1% P/E (Est.) 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. Book 3.9x 4.0x 2.4x .9x 1.6x 5.7x 3.4x 3.6x 4.0x n/m

1 2 3 4 5 6 7 8 9 10

Company / Ticker SINA Corp. / SINA Google / GOOG Yahoo! / YHOO Katy Industries / KT Veeco Instruments / VECO TAL Education / XRS Changyou.com / CYOU Hexcel / HXL Home Inns & Hotels / HMIN 21Vianet Group / VNET

Top Holdings of Joho Capital By Dollar Value


Market Value ($mn) 4,180 197,003 20,018 7,930 4,480 22,060 876 1,098 2,645 1,390 Price Recent ($) 26.85 605.91 16.14 16.30 68.56 56.90 11.32 28.36 26.61 30.69 from Dec. 30 12% -6% 0% 10% 32% 1% 14% 36% 10% 19% Shares Owned Recent (000) 4,311 130 3,490 3,389 687 792 2,104 777 821 494 from Sep. 30 -25% 0% 0% 0% >100% -16% 16% new 0% 0% Holdings as % of Co. 3% <1% <1% <1% 1% <1% 3% 2% <1% 1% Fund* 24% 16% 11% 11% 10% 9% 5% 4% 4% 3% P/E (Est.) 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. Book 7.5x 4.0x 2.4x .9x 3.9x >9.9x 5.7x 1.6x 3.6x 4.0x

1 2 3 4 5 6 7 8 9 10

Company / Ticker New Oriental Edu. / EDU Google / GOOG Yahoo! / YHOO Katy Industries / KT SINA Corp. / SINA Estee Lauder / EL TAL Education / XRS Veeco Instruments / VECO Hexcel / HXL Home Inns & Hotels / HMIN

New Positions
21Vianet Group / VNET Changyou.com / CYOU Veeco Instruments / VECO
*

Sold Out Positions


7 Days Group / SVN Renren / RENN

Portfolio Metrics
Portfolio size

Sector Weightings
$492 million 98% $3.4 billion $22 billion 21x 17x 3.7x
Services 43% Consumer NonCyclical 9%

Top 10 as % of portfolio Median maret 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. 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 46 of 169

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. MOI Signal Rank Top Current Ideas of Lane Five Capital
Market Value ($mn) 86 81 1,796 753 78 545 3,925 50,284 424 698 Price Recent ($) 4.90 11.07 18.85 4.55 5.74 15.13 407.96 396.14 5.00 13.98 from Dec. 30 9% 0% 7% 26% -16% -3% -2% 6% 130% 15% Shares Owned Recent (000) 1,189 667 279 1,125 726 293 10 12 2,020 338 from Sep. 30 >100% 0% 0% 0% 0% 0% 0% 0% 6% 0% Holdings as % of Co. 7% 9% <1% <1% 5% <1% <1% <1% 2% <1% Fund* 6% 7% 5% 5% 4% 4% 4% 5% 10% 5% P/E (Est.) 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. Book 1.3x 4.6x n/m 3.7x 2.1x n/m 1.6x >9.9x 2.2x .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 ($mn) 424 81 86 1,796 753 50,284 698 545 78 3,925 Price Recent ($) 5.00 11.07 4.90 18.85 4.55 396.14 13.98 15.13 5.74 407.96 from Dec. 30 130% 0% 9% 7% 26% 6% 15% -3% -16% -2% Shares Owned Recent (000) 2,020 667 1,189 279 1,125 12 338 293 726 10 from Sep. 30 6% 0% >100% 0% 0% 0% 0% 0% 0% 0% Holdings as % of Co. 2% 9% 7% <1% <1% <1% <1% <1% 5% <1% Fund* 10% 7% 6% 5% 5% 5% 5% 4% 4% 4% P/E (Est.) 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. Book 2.2x 4.6x 1.3x n/m 3.7x >9.9x .8x n/m 2.1x 1.6x

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% $1.4 billion $5.3 billion 17x 15x 2.1x
Consumer Cyclical 17% Financial 16% Other 13%

Top 10 as % of portfolio Median maret 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. 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 47 of 169

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

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 ($mn) 3,236 1,797 427 320 Price Recent ($) 15.71 47.02 22.51 2.77 from Dec. 30 14% 22% -4% 7% Shares Owned Recent (000) 58,006 10,423 1,618 994 from Sep. 30 3% 0% 0% 0% Holdings as % of Co. 28% 27% 9% <1% Fund* 63% 34% 3% 0% P/E (Est.) This FY 13x 19x 9x n/m Next FY 10x n/a n/a 7x Price/ Tang. Book 1.1x 2.1x 1.8x .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. / GLPW

Portfolio Metrics
Portfolio size

Sector Weightings
$1.4 billion 100% $427 million $1.2 billion 16x 10x 1.8x
Basic Materials 34%

*, **

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. Excludes portfolio cash, leverage, certain non-U.S. holdings, and non-equity securities.

**

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

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 48 of 169

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%

2008-2012 by BeyondProxy LLC. All rights reserved.

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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 Intl / 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%

2008-2012 by BeyondProxy LLC. All rights reserved.

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March 2012 Page 50 of 169

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