Portfolios of Great Managers

Baron Asset
Manager Ron Baron buys companies he thinks can double in price over the next four years, focusing on steady growers trading at prices that don't yet reflect their potential.

Clipper
This fund's management searches for established companies with dominant franchises but only buys ones trading at discounts of at least 30% to its estimates of intrinsic value. Management uses discounted cash-flow analysis to estimate a company's worth but uses the sale price of comparable companies if the latter value is more conservative.

Dodge & Cox Stock
This fund invests in mid- and large-cap stocks that look cheap on a range of valuation measures. It favors companies with good management, dominant competitive positions, and good growth potential.

FPA Capital
Manager Bob Rodriguez is a dyed-in-the-wool value investor. He looks for companies that are extremely cheap but that also have clean balance sheets, strong cash flows, and dominant market shares in their industries.

Gabelli Asset
Mario Gabelli first looks for firms trading at less than his estimates of the price a private buyer would pay for them. He buys those with improving fundamentals and clear catalysts that can drive their share prices higher.

ICAP Select Equity
ICAP screens a group of 450 large-cap U.S. and European names for stocks with attractive valuations, consistent-to-improving earnings, and catalysts for future growth such as new product launches.

Legg Mason Opportunity
Bill Miller has free rein here. Although he typically seeks companies trading at discounts to his estimates of their intrinsic values, that often includes names that others consider expensive. This fund's prospectus also allows Miller to buy growth companies without regard to value and to short securities.

Legg Mason Value
Manager Bill Miller looks at value relative to a firm's future growth potential, not on an absolute basis.

Longleaf Partners
This fund takes value seriously. Its comanagers scour the markets for companies trading at discounts of 40% or more to the team's estimates of their intrinsic value, using discounted cash-flow analysis, asset values, or sales of comparable firms to determine the latter.

Longleaf Partners Small Cap
This fund is a true-blue bargain-hunter. Its comanagers scour the market for small-cap companies trading at discounts of 40% or more to the team's estimates of their intrinsic values. To arrive at the latter, the team uses several methods.

Marsico Focus
Tom Marsico combines top-down analysis with bottom-up stock-picking. He fills the bulk of the portfolio with steady-growth stocks that he intends to hold for the long haul, but also has owned more-explosive growth names in the tech and telecom areas.

Oakmark Select
Lead manager Bill Nygren looks for companies trading at significant discounts to what a rational businessperson would pay for them. Although there is no question that Nygren is a value manager, he has historically been willing to invest in nontraditional value areas, including biotechnology.

Scudder-Dreman High Return
Like any good contrarian, manager David Dreman focuses on out-of-favor companies trading at below-market valuations, which leads him to cheaper stocks than what most of his peers favor.

Selected American
The managers try to buy great companies when their shares are temporarily depressed.

Sequoia
Comanagers Bill Ruane and Robert Goldfarb aren't afraid to play favorites. The fund typically holds anywhere between 10 and 20 stocks. When their high standards aren't met, it holds as much as 30% of assets in Treasuries. Companies with top-quality management, long-lasting competitive advantages, and simple businesses qualify for entry into the portfolio.

Sound Shore
Management seeks out beaten-down stocks with strong fundamentals. It researches each company that meets an initial valuation screen, favoring those whose earnings prospects look cheap by historical and current market standards.

Third Avenue Value
Manager Marty Whitman sniffs out bargains among beaten-down and unloved companies. He tries to buy asset plays at discounts of at least 20% to NAV and earnings-driven companies at no more than 10 times peak earnings. Although he wants to buy cheap companies, he also wants them to be safe. The strength of a company's balance sheet is thus a key factor in his investment decisions.

Third Avenue Small-Cap Value
Curtis Jensen does things a bit differently here than firm founder Marty Whitman does at sibling Third Avenue Value. He still tries to invest in companies with strong balance sheets at $0.50 on the dollar, and he uses a tax-efficient, buy-and-hold strategy. But at this fund, he focuses exclusively on small caps and runs a more concentrated portfolio.

Tweedy Browne American Value
Longtime managers William Browne, Christopher Browne, and John Spears are old-school value investors who follow the disciplines of Ben Graham and Warren Buffett.

Vanguard Primecap
The fund's three managers follow a contrarian-growth approach. They look for swiftly growing firms, but they like to buy them on the cheap--usually when they're out of favor.

Weitz Value
Manager Wally Weitz looks mainly for securities that are cheap on a cash-flow basis. He has no qualms about loading up on individual sectors and holding cash when he can't find stocks that meet his criteria.