Winter 2010

Matt Cohen recommends the purchase of SOHU.com common stock, indicating a belief in its potential for growth and value appreciation in the market.

Mason Hawkins believes that companies with growing reserves and production of natural gas in the U.S. should perform well, particularly given the current favorable pricing of natural gas compared to other hydrocarbons.

Mason Hawkins sees Pioneer Natural Resources as a strong investment due to its growing reserves and production of natural gas, which he believes will benefit from rising demand as natural gas substitutes for oil and coal.

I recommend buying the Nexstar 12% Senior Subordinated PIK Notes at 63. They are trading 18 points cheap of the 7% Senior Subordinated Notes and 14 points cheap of the 7% Senior Subordinated PIK Notes, despite being pari passu in the capital structure. The disparity is due to the lack of a guarantee from Mission, which is deemed worthless given the current financials.

The market underestimates SOHU's value by focusing on the risks of its free-to-play online gaming business and its reliance on a single hit game. By subtracting the value of its 66% stake in Changyou and its cash reserves, we find that we are effectively paying only $107 million for SOHU's other internet properties and businesses. This presents a significant upside potential, making SOHU a compelling investment opportunity at a value price.

Sohu.com is undervalued due to its significant cash reserves and ownership stake in its gaming subsidiary, Changyou. The market is pricing the non-gaming business at an extremely low multiple, suggesting that investors are paying only a fraction for its popular internet properties and advertising business. With a target price of $67 based on DCF analysis, there is substantial upside potential from current levels.

Binny & Smith was selling at under book value, had almost no debt, and was trading at around 5x earnings, which suggested a potential 20% return on debt-free equity. This made it an attractive investment opportunity.

Nestlé benefits from having over 30 billion dollar brands and generates more than 30% of its income from developing countries, which positions it well for growth in emerging markets. The company operates in categories that grow faster than the market, making it an attractive investment.

Coca-Cola FEMSA is well-positioned to sell beverages, including coke, water, and beer, to the rising middle class in Latin America, making it a strong investment opportunity in the consumer products sector.

Philip Morris International has a strong global presence in the tobacco market, which continues to generate significant revenue, particularly in emerging markets where demand is growing.

Novartis is a strong player in the pharmaceutical industry with a significant portion of its revenue coming from emerging markets, making it a solid investment choice for exposure to global healthcare growth.

Diageo, with its portfolio of alcoholic beverages, is well-positioned to benefit from the growing demand in emerging markets, making it an attractive investment in the consumer products space.

Exelon is the nation's largest merchant nuclear fleet and offers the lowest-cost source of power. A recent transaction valued Exelon's nuclear assets at approximately $55 per share, and when factoring in its regulated utility businesses, the intrinsic value is estimated to be around $66, representing a more than 20% discount to intrinsic value.

Exelon is positioned to benefit from potential carbon regulations that could increase its stock value by an estimated $15 per share. The company has a structural competitive advantage as the lowest-cost producer in the power commodity business, which is not reflected in its current stock price, especially given its attractive dividend yield of close to 5%.

3M is a high-quality industrial company that Tweedy, Browne had not been able to buy for 20 years, indicating a strong belief in its long-term value and growth potential. They purchased shares during a market downturn, suggesting confidence in its recovery and performance.

Emerson Electric is another high-quality industrial company that Tweedy, Browne bought during the market downturn, reflecting their strategy of investing in strong companies when prices are favorable. This indicates a belief in its resilience and future growth.

Burlington Northern is a railroad stock that Tweedy, Browne invested in during the market downturn, highlighting their confidence in the transportation sector's recovery and growth potential.

Union Pacific is a railroad stock that Tweedy, Browne purchased during the market downturn, indicating a belief in the strength and recovery of the transportation sector.

Norfolk Southern is another railroad stock that Tweedy, Browne bought during the market downturn, reflecting their strategy of investing in strong companies with recovery potential in the transportation sector.

ConocoPhillips was purchased by Tweedy, Browne as oil prices fell, indicating a belief in the company's long-term value and recovery potential in the energy sector.

Devon Energy was bought by Tweedy, Browne during a period of declining oil prices, suggesting confidence in its future performance and recovery in the energy market.

Total was purchased by Tweedy, Browne as part of their strategy to invest in oil stocks when prices were low, indicating a belief in the company's resilience and potential for recovery.

Henry Schein is considered a recession-resistant business and was bought by Tweedy, Browne, reflecting confidence in its stability and growth potential even in challenging economic conditions.

Cintas is part of Tweedy, Browne's portfolio, indicating a belief in its strong business model and growth potential in the uniform supply industry.

Linde was re-acquired by Tweedy, Browne after the market downturn, reflecting confidence in its long-term value and recovery potential in the industrial gas sector.

Kronos was bought by Tweedy, Browne as part of their strategy to invest in companies that had fallen in price, indicating a belief in its recovery and growth potential in the beverage equipment industry.

Warren Buffett sees BYD as a remarkable company run by a remarkable CEO, Wang Chan Fu, who has demonstrated integrity and strong business acumen. The company is the second largest cell phone battery maker in the world and has the best-selling car in China, indicating strong market positioning and operational excellence.

Buffett highlights Coca-Cola's unmatched global brand presence and consistent sales growth, with 1.6 billion servings sold daily. He emphasizes the company's pricing power, noting that even a small price increase can significantly boost revenue, making it a strong long-term investment.

Buffett describes his early investment in Disney as acquiring significant value at a low price, highlighting the company's strong content portfolio and pricing power through ESPN. He notes that Disney's control of important content leads to sustained pricing power, making it a valuable long-term investment.

Grant Bowman presented a short recommendation on Avery Dennison Corp. during the Moon Lee Prize competition, suggesting that the stock is overvalued based on his analysis of the company's fundamentals and market position.

Sidney Gargiulo presented a long recommendation on Interactive Brokers Group, arguing that the company is well-positioned to benefit from increasing trading volumes and market activity, making it a strong investment opportunity.