Value-oriented Equity Investment Ideas for Sophisticated Investors

A Monthly Publication of BeyondProxy LLC Subscribe at manualofideas.com

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

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

Investing In The Tradition of Graham, Buffett, Klarman

Year IV, Volume III March 31, 2011

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

Top Ideas In This Report

RadioShack (NYSE: RSH) …………………….. 80

Also Inside

Editorial Commentary ………………. 4

Superinvestor Update ………………. 8

Interview with Guy Spier …………… 9

Interview with Rahul Saraogi …….. 18

Screening for Small-Cap Ideas …… 22

Analysis of 20 Companies ………… 36

This Month’s Top Web Links …….. 116

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.

SMALL- AND MICRO-CAP VALUE

► 11 small- and micro-cap investment screens ► 20 companies profiled and analyzed

► Proprietary selection of top investment candidates ► Plus: Superinvestor holdings update

► Plus: Interview with Guy Spier ► Plus: Interview with Rahul Saraogi

Companies mentioned in this issue include A. H. Belo, Aegean Marine Petrol, Alliance One, Barnes & Noble,

Benchmark Electronics, Boyd Gaming, Cache, Callaway Golf, Canadian Solar, Charming Shoppes, Charming Shoppes, Chiquita,

CIBER, Citizens Republic, Coldwater Creek, CONN’S, Corinthian Colleges, Cross Country Health, CSS Industries, Donegal Group, Doral Financial,

E.W. Scripps, Eagle Bulk Shipping, Eastman Kodak, EMC Insurance, Exceed Company, Exterran Holdings, FBR Capital Markets, Fresh Del Monte, Gaiam, Genco Shipping, GenOn Energy,

Gibraltar Industries, GigaMedia, Green Plains Renewable Energy, Hallmark Financial, Hawaiian Holdings, Horace Mann Educator,

Hutchinson Technology, Imation, Imperial Sugar, Jones Apparel, Kindred Healthcare, Leap Wireless, Liz Claiborne, Luby’s, Lydall, Maiden Holdings, MarineMax, Meadowbrook Insurance, MedCath,

Medical Action Industries, Movado, Navios Maritime, Ness Technologies, Northstar Realty, Northwest Pipe, Novatel Wireless, Office Depot,

PC Connection, Penson Worldwide, PharMerica, PHH, Phoenix Companies, Princeton Review, RadioShack, Republic Airways, REX American,

Rosetta Stone, RTI Biologics, SeaBright Insurance, SkyWest, Standard Pacific, Sterling Construction, Stewart Information Services,

SureWest Communications, Sycamore Networks, Syms Corp., Trident Microsystems, Triple-S Management, Tuesday Morning,

Ultrapetrol, United Fire Casualty, USEC, West Marine, Willbros Group, Winn-Dixie Stores, Xyratex, ZipRealty, and more.

(analyzed companies are underlined)

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 3 of 118

Table of Contents

EDITORIAL COMMENTARY ..........................................................................4

SUPERINVESTOR HOLDINGS UPDATE ......................................................8

INTERVIEW WITH GUY SPIER ......................................................................9

INTERVIEW WITH RAHUL SARAOGI ........................................................ 18

BROWSING FOR SMALL- AND MICRO-CAP OPPORTUNITIES ............. 22

CHEAPEST SMALL- AND MICRO-CAPS, BASED ON TANGIBLE BOOK VALUE TO MARKET VALUE ..... 22 CHEAPEST SMALL- AND MICRO-CAPS, BASED ON TRAILING EBIT TO ENTERPRISE VALUE ........... 24 SELECTED SMALL- AND MICRO-CAPS TRADING CLOSE TO 52-WEEK LOWS ............................... 26 “MAGIC FORMULA,” BASED ON TRAILING OPERATING INCOME (MV < $2 BILLION) ........................ 28 “MAGIC FORMULA,” BASED ON THIS YEAR’S EPS ESTIMATES (MV < $2 BILLION) ........................ 29 “MAGIC FORMULA,” BASED ON NEXT YEAR’S EPS ESTIMATES (MV < $2 BILLION) ....................... 30 VALUE WITH CATALYST: CHEAP REPURCHASERS OF STOCK (MV < $2 BILLION).......................... 31 PROFITABLE DIVIDEND PAYORS WITH DECENT BALANCE SHEETS (MV < $2 BILLION) .................. 32 DEEP VALUE: LOTS OF REVENUE, LOW ENTERPRISE VALUE (MV < $2 BILLION) ......................... 33 DEEP VALUE: NEGLECTED GROSS PROFITEERS (MV < $2 BILLION) ........................................... 34 ACTIVIST TARGETS: POTENTIAL SALES OR RECAPITALIZATIONS (MV < $2 BILLION) ..................... 35

20 SMALL- AND MICRO-CAP INVESTMENT CANDIDATES .................... 36

CACHE (CACH) – MICHAEL PRICE, IRONWOOD, MILL ROAD, RENTECH..................................... 36 CHARMING SHOPPES (CHRS) – OMEGA, ROYCE, CRESCENDO, CLEARBRIDGE ......................... 40 COLDWATER CREEK (CWTR) – KORNITZER, GAMCO, ROYCE .................................................. 44 EASTMAN KODAK (EK) – LEGG MASON, PRIMECAP................................................................. 48 GENON ENERGY (GEN) – T. ROWE, PAULSON, ORBIS, OWL CREEK, SASCO ............................. 52 HAWAIIAN HOLDINGS (HA) – ACADIAN, CANYON, RENTECH, AQR, LONESTAR .......................... 56 HUTCHINSON TECHNOLOGY (HTCH) – VAN DEN BERG, KENNEDY, RENTECH, GUGGENHEIM ...... 60 LEAP WIRELESS (LEAP) – MHR, CAP RE, PENN, H PARTNERS, PENTWATER, JAT, IRIDIAN ..... 64 LIZ CLAIBORNE (LIZ) – TREMBLANT, ALYESKA, PERRY, ELM RIDGE .......................................... 68 OFFICE DEPOT (ODP) – TIGER CONSUMER ............................................................................. 72 PRINCETON REVIEW (REVU) – BLAIR, BURNHAM, BRIDGER, PERIMETER, S SQUARED ............... 76 RADIOSHACK (RSH) – IVORY, LSV, TIGER CONSUMER ........................................................... 80 REPUBLIC AIRWAYS (RJET) – GREENLIGHT, TRAFELET, SENATOR ........................................... 84 ROSETTA STONE (RST) – TIGER CONSUMER, TAMRO, MFC, ARGYLL ....................................... 88 STEWART INFORMATION SERVICES (STC) – PRESCOTT, TOWLE, ARTISAN, IRONBRIDGE ............ 92 SYCAMORE NETWORKS (SCMR) – THIRD AVENUE .................................................................. 96 SYMS (SYMS) – FRANKLIN, KAHN, MICHAEL PRICE ............................................................... 100 WINN-DIXIE STORES (WINN) – RIVER ROAD, CONTRARIUS, PRIVATE ..................................... 104 XYRATEX (XRTX) – ROYCE, T ROWE ................................................................................... 107 ZIPREALTY (ZIPR) – PASSPORT, ANCIENT ART ..................................................................... 112

THIS MONTH’S TOP 10 WEB LINKS ....................................................... 116

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 4 of 118

Editorial Commentary We devoted our January issue to large-cap value investment ideas, highlighting

such household names as Cisco Systems (CSCO), Pfizer (PFE) and Travelers (TRV). This month, we travel to the other end of the market capitalization spectrum, aiming to uncover opportunities among companies with market caps of less than $2 billion. The names include RadioShack (RSH),

Our team has gained quite a bit of experience in this less widely scrutinized part of the market over the years. The search for compelling ideas has taken us back to a few companies we have known for some time but may have passed on due to price or other considerations. In the November 2008 issue of The Manual of Ideas, we profiled RadioShack (RSH), a retailer with a tired brand and unimpressive financial results. RadioShack embarked on a turnaround led by an executive team with experience at Eddie Lampert’s Kmart/Sears. Fast-forward two-and-a-half years: RadioShack’s stock price is roughly where stood in late 2008, while the company has grown same-store sales, transitioned to more attractive mobile products, generated lots of free cash, and repurchased a large number of shares. In short, the company has, in our view, become an intriguing and timely opportunity.

Of course, investors in small- and micro-cap public companies are well aware of the minefield that awaits those who enter uncharted territory in search of value. Over the past few years, dozens of small companies that trade on U.S. stock exchanges but operate exclusively in China have passed various value-oriented screens due to their apparently solid balance sheets and strong earnings. Unfortunately, investors are now finding out the truth about many of those companies: The founders and sponsors were often betting on the gullibility of U.S. investors — put “China” in a name, raise money in an IPO, and then lie your way to an increasing stock price. Scores of Chinese small-caps have recently been revealed as frauds, hurting not only U.S. investors but also honest Chinese business owners. We warned about U.S.-traded Chinese education companies in our July 2009 issue, and we have eliminated most of those companies from the small- and micro-cap screens in this report.

We find the following small- and micro-caps particularly interesting at this time:

$3.70 per share; MV $2.9 billion)

$0

$5

$10

$15

$20

$25

$30

$35

$40

Mar 11Mar 10Mar 09Mar 08Mar 07Mar 06Mar 05Mar 04Mar 03Mar 02

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 5 of 118

The recent merger of has created a large, diversified U.S. producer of wholesale electricity. Fundamental challenges including low natural gas and, by proxy, power prices mask significant “normalized” earning power. Investors may also underappreciate the combined company’s diversification of “fuels” from coal toward more natural gas. will reduce capex related to environmental obligations starting in 2012.

Trading at 50% of tangible book and an estimated 35% discount to the implied enterprise value per megawatt capacity of selected peers, shares offer downside protection and material upside should fundamentals improve in the coal-fired power generation industry.

John Paulson’s hedge fund owns 7% of having bought shares at a higher implied price.

RadioShack (NYSE: RSH, $14 per share; MV $1.5 billion)

RadioShack’s performance has improved markedly over the past three years, with outgoing CEO Julian Day, formerly of Kmart, deserving much credit. RadioShack posted a 4% comparable sales increase in 2010 and has been buying back stock meaningfully below our estimate of fair value, making this one of the more compelling small-cap ideas we have encountered recently.

A long-term caveat is that consumer electronics retailing remains a business in which high returns on capital may not be sustainable.

With analysts projecting 2011 and 2012 EPS of $1.72 and $1.87, respectively, we consider RadioShack a compelling risk-reward at roughly $14 per share.

$13 per share; MV $270 million)

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

Mar 11Mar 10Mar 09Mar 08Mar 07Mar 06Mar 05Mar 04Mar 03Mar 02

$0

$5

$10

$15

$20

$25

$30

$35

Mar 11Mar 10

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 26 of 118

Selected Small- and Micro-Caps Trading Close to 52-Week Lows ∆ to Reach Market Enterpr. Book Tang. Trailing Twelve Months’ Em- 52-Week Value Value Value/ Book/ Sales/ GP/ EBIT/ FCF ploy- Ins. Price Low High ($mn) ($mn) MV MV Enterprise Value Yield ees Own.

OPTI OPTi 2.08 0% 105% 24 3 93% 93% 1533% n/m 1321% 64% 1 10% TLB Talbots 4.87 0% 265% 343 410 54% 21% 302% 118% 19% 6% 3,400 3% BKS Barnes & Noble 8.89 0% 178% 536 814 163% -41% 854% 219% -6% -25% 40,000 2% COIN Converted Organics 0.30 0% 323% 27 27 -65% -72% 12% -1% -57% -123% 46 2% OCNF OceanFreight 0.64 0% 289% 49 265 478% 478% 39% 21% -68% -417% 6 KANP Kaanapali Land 20.00 0% 30% 36 29 286% 286% 18% -3% n/a -24% 35 CRDE Cardinal Ethanol 3500 0% 324% 51 111 168% 168% 211% 16% n/a 13% 48 1% OB OneBeacon Insurance 12.80 0% 38% 1,209 1,595 102% 102% 105% -47% n/a -25% 1,500 1% ARDNA Arden Group 75.67 0% 50% 239 192 33% 33% 218% n/m n/a 7% 1,274 TIS Orchids Paper 11.20 0% 65% 84 102 83% 83% 91% 15% n/a -12% 296 0% CPLA Capella Education 50.61 -1% 94% 825 632 25% 25% 67% 41% n/a 7% 2,968 6% TLAB Tellabs 4.99 -1% 89% 1,810 675 103% 86% 243% 117% 27% 11% 3,413 5% CEP Constellation Energy 2.47 -1% 57% 59 218 344% 344% 84% 68% 7% 63% 136 6% HGIC Harleysville Group 30.56 -1% 24% 828 946 93% 93% 104% 10% n/a 3% 1,706 2% ICAD iCAD 1.05 -1% 132% 48 30 133% 31% 87% 75% -11% 9% 99 14% OSG Overseas Shipholding 30.29 -1% 76% 923 2,636 196% 186% 40% 8% -3% -57% 3,500 1% RSYS RadiSys Corp. 8.11 -1% 36% 197 118 70% 66% 241% 74% 2% 6% 719 1% RSH RadioShack 14.10 -1% 70% 1,492 1,562 56% 54% 286% 129% 24% 2% 35,100 1% MLNK ModusLink 5.17 -2% 78% 226 72 128% 124% 1267% 132% -1% 7% 4,400 2% FARM Farmer Brothers 10.45 -2% 87% 169 170 86% 73% 262% 106% n/a -3% 2,030 26% TECUA Tecumseh Products 8.58 -2% 81% 157 157 276% 276% 595% 63% -10% -35% 7,600 0% VCI Valassis Comms 27.41 -2% 40% 1,386 1,847 38% -25% 126% 33% 12% 30% 6,735 1% AMRI Albany Molecular 4.16 -2% 116% 126 97 233% 193% 204% 43% -12% -5% 1,266 0% GAI GlobalTech Appliance 7.40 -2% 69% 24 2 332% 319% 4459% 659% 23% -76% 3,420 MSW Mission West Prop. 6.56 -2% 18% 147 496 97% 95% 20% 15% n/a 38% 6 BEBE bebe stores 5.46 -2% 84% 459 276 77% 77% 179% 70% 0% -16% 1,398 0% FRO Frontline 24.49 -2% 59% 1,881 4,599 40% 40% 25% 12% 7% -20% 51 CHINA CDC 2.46 -2% 291% 87 67 304% -24% 471% 211% -11% 4% 317 BTH Blyth 30.97 -2% 94% 255 249 94% 88% 370% 206% 21% -1% 2,300 28% ELNK EarthLink 7.91 -2% 18% 858 465 89% 78% 134% 82% 40% 19% 560 1% CENT Central Garden & Pet 8.96 -2% 32% 533 843 95% 40% 182% 61% 14% 12% 3,900 1% GNK Genco Shipping 10.95 -2% 124% 394 1,854 278% 278% 24% 20% 12% -131% 791 ORN Orion Marine 10.59 -2% 87% 286 263 86% 75% 134% 25% 12% -5% 303 1% SUPX Supertex 20.85 -3% 52% 271 133 73% 73% 65% 34% 12% 6% 350 7% ICA Empresas ICA 8.65 -3% 32% 1,388 3,583 101% 101% 72% 10% 5% -11% 26,587 PAET PAETEC Holding 3.35 -3% 58% 485 1,345 34% -57% 121% 61% 4% 3% 3,792 6% MPWR Monolithic Power 13.31 -3% 90% 470 292 53% 53% 75% 42% 12% 5% 889 7% CEDC Central European 11.58 -3% 245% 804 1,980 195% -64% 36% 17% 5% -5% 4,150 0% INOD Innodata Isogen 2.50 -3% 79% 63 42 63% 62% 146% 34% -3% 5% 5,060 MMUS MakeMusic 4.64 -3% 51% 23 11 71% 44% 153% 128% 4% 11% 100 0% ZOOM Zoom Technologies 3.44 -3% 160% 60 98 76% 61% 222% 19% n/a -8% 1,400 BKR Michael Baker 27.83 -3% 49% 257 170 76% 50% 295% 58% n/a 8% 2,517 0% TRID Trident Microsystems 1.00 -3% 156% 178 85 126% 79% 656% 138% -204% -74% 1,522 1% FMD First Marblehead 2.00 -3% 104% 202 8,529 159% 136% 2% n/m n/a 94% 393 5% HTH Hilltop Holdings 9.29 -3% 31% 525 20 125% 118% 662% 105% 46% 1% 134 0% UEPS Net1 UEPS 9.29 -3% 104% 423 472 79% -10% 62% 45% 18% 8% 2,192 1% TKLC TEKELEC 7.44 -3% 167% 511 290 119% 74% 146% 87% 9% 1% 1,291 1% MXL MaxLinear 8.08 -3% 141% 258 164 41% 40% 42% 29% n/a 1% 210 0% SHIP Seanergy Maritime 0.62 -3% 174% 37 392 736% 690% 24% 16% 5% 76% 3 EMITF Elbit Imaging 11.12 -3% 117% 288 923 72% 67% 35% 11% 0% -32% 240

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 27 of 118

∆ to Reach Market Enterpr. Book Tang. Trailing Twelve Months’ Em- 52-Week Value Value Value/ Book/ Sales/ GP/ EBIT/ FCF ploy- Ins. Price Low High ($mn) ($mn) MV MV Enterprise Value Yield ees Own.

SKX Skechers 18.46 -3% 143% 890 739 102% 101% 272% 123% n/a -14% 2,517 6% ESLR Evergreen Solar 1.22 -3% 525% 47 413 -129% -129% 82% -13% -27% -230% 1% PRGN Paragon Shipping 2.99 -3% 69% 177 460 277% 277% 24% 19% 7% -105% 270 BIOS BioScrip 4.15 -4% 137% 225 531 89% -69% 308% 49% 6% -18% 885 1% GFIG GFI Group 4.57 -4% 53% 558 378 94% 37% 228% 80% 11% 10% 1,990 42% BWS Brown Shoe 10.65 -4% 87% 467 689 89% 74% 364% 146% 12% -15% 12,080 4% NTRI NutriSystem 13.56 -4% 84% 363 352 21% 21% 145% 81% 15% 6% 573 3% PETS PetMed Express 14.68 -4% 68% 331 259 31% 31% 89% 33% 14% 6% 227 1% USAK USA Truck 12.15 -4% 55% 128 229 108% 108% 201% 100% 0% 4% 2,900 22% JNY Jones Apparel 12.36 -4% 100% 1,091 1,427 104% 23% 255% 88% 13% 8% 6,370 3% NLP NTS Realty 3.33 -4% 65% 38 268 136% 136% 18% 11% n/a -29% 0 0% PICO PICO Holdings 28.29 -4% 40% 642 573 88% 88% 6% 5% -1% -10% 57 1% MCEM Monarch Cement 24.75 -4% 23% 63 72 162% 162% 168% 22% 0% 4% 145 0% AXR AMREP Corp. 9.75 -4% 62% 59 54 151% 124% 187% 26% -3% 17% 1,300 WWE World Wrestling Ent. 12.01 -4% 58% 889 725 36% 36% 66% 28% 11% -6% 585 3% RSOL Real Goods Solar 2.35 -4% 104% 43 35 74% 73% 222% 62% 6% 3% 200 ICFI ICF International 21.80 -4% 29% 427 509 83% 1% 150% 57% n/a 14% 3,700 3% BGFV Big 5 Sporting Goods 11.26 -4% 63% 246 292 61% 59% 307% 102% 12% 4% 8,900 1% PTP Platinum Underwriter 36.29 -4% 28% 1,358 620 140% 140% 159% 60% 84% 0% 144 2% LWAY Lifeway Foods 8.44 -4% 43% 140 145 25% 11% 43% 15% 5% 3% 200 50% ALIF Artificial Life 0.68 -4% 109% 43 44 146% 70% 73% 53% 23% -22% 50 14% HALL Hallmark Financial 8.37 -4% 43% 168 167 140% 96% 183% 62% 10% 20% 321 0% SCIL Scientific Learning 2.93 -4% 89% 55 40 8% -2% 109% 80% -14% -11% 212 1% ACU Acme United 9.41 -4% 39% 29 36 88% 88% 176% 65% 8% -11% 134 14% PAR 3PAR 4.90 -4% 50% 74 71 118% 67% 336% 88% 5% 4% 1,649 19% BRID Bridgford Foods 11.35 -5% 49% 106 94 34% 34% 125% 48% n/a -3% 530 76% RST Rosetta Stone 13.19 -5% 108% 277 155 64% 48% 168% 142% 8% 8% 1,084 1% CWT California Water 35.48 -5% 12% 739 1,202 59% 59% 38% 18% n/a -10% 1,127 2% KFS Kingsway Financial 1.06 -5% 157% 56 56 269% 182% 553% -601% -254% -997% 2,600 TNK Teekay Tankers 9.68 -5% 44% 587 1,028 75% 73% 14% 13% n/a 0% 0 GSAT Globalstar 1.05 -5% 101% 305 873 180% 180% 8% 3% -5% -92% 332 0% LLEN L&L Energy 7.22 -5% 107% 232 227 55% 54% 94% 34% n/a 17% 1,400 26% ENZ Enzo Biochem 3.50 -5% 94% 134 103 69% 35% 95% 43% -14% -10% 527 0% RMTR Ramtron 2.05 -5% 103% 58 60 63% 58% 117% 61% 6% 7% 109 3% ACFN Acorn Energy 3.68 -5% 83% 64 58 52% 25% 61% 23% -10% -43% 178 5% DSWL Deswell Industries 3.06 -5% 74% 48 14 234% 233% 627% 68% n/a -18% 3,474 CBEY Cbeyond 12.19 -5% 48% 379 353 46% 46% 128% 87% -1% 5% 1,913 2% BCRX BioCryst Pharma 3.44 -5% 143% 155 94 48% 48% 67% 67% -35% -9% 79 1% EPAX Ambassadors Group 10.25 -5% 23% 185 105 47% 40% 72% 63% 10% 6% 244 2% AMSC Am. Superconductor 22.84 -5% 70% 1,158 915 43% 39% 44% 17% 7% -1% 714 6% WEYS Weyco Group 23.47 -5% 14% 267 259 65% 60% 88% 35% n/a -3% 553 11% RODM Rodman & Renshaw 1.96 -5% 144% 65 14 80% 79% 610% 538% -52% -14% 114 16% POZN POZEN 4.68 -5% 171% 140 76 43% 43% 90% n/m n/a -4% 31 0% BMI Badger Meter 38.41 -5% 18% 578 588 29% 22% 47% 17% n/a -1% 1,293 3% XRTX Xyratex 11.02 -5% 86% 334 243 110% 107% 660% 115% 51% 11% 2,150 CALM Cal-Maine Foods 27.67 -5% 41% 660 605 59% 54% 152% 34% n/a 7% 1,950 23% GNVC GenVec 0.38 -5% 718% 49 14 66% 66% 119% n/m -91% -21% 90 CHRS Charming Shoppes 3.00 -5% 130% 346 382 128% 67% 530% 263% -11% -20% 6,500 0% UFCS United Fire Casualty 18.54 -5% 33% 486 306 147% 147% 193% 33% 70% 14% 640 0% JBSS John B. Sanfilippo 11.77 -5% 38% 125 226 149% 132% 276% 38% 8% 1% 1,350 3%

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 29 of 118

“Magic Formula,” based on This Year’s EPS Estimates (MV < $2 billion) Companies with high returns on capital employed, trading at high earnings yields (based on this FY EPS estimates)

▼ ▼ Move To This FY EBIT/ Price to Insiders Price 52-Week MV EV EV/ EPS Capital Tax Tangible % Buys/ Company Ticker ($) Low High ($mn) ($mn) Sales Yield Employed Rate Book Own. Sells

1 * New Energy Systems NEWN 4.17 -2% 121% 52 43 .5x 34% 235% 22% 3.5x 0% - / -

2 ITT Educational ESI 67.74 -26% 80% 1,921 1,758 1.1x 14% infinite 39% >9.9x 0% 12 / 2

3 * inTEST INTT 3.39 -58% 38% 35 30 .7x 23% 141% 1% 2.9x 3% - / 3

4 Bridgepoint Edu. BPI 18.02 -29% 53% 957 678 1.0x 13% infinite 41% 4.1x 1% 7 / 7

5 Lihua International LIWA 9.46 -23% 38% 283 195 .5x 19% 133% 27% 1.8x 48% 2 / -

6 Metropolitan Health MDF 4.42 -34% 20% 180 132 .4x 12% 2665% 38% 2.9x 3% 4 / 4

7 ePlus PLUS 25.72 -36% 18% 218 194 .2x 12% infinite 39% 1.2x 9% 7 / 8

8 Power-One PWER 8.35 -59% 56% 870 697 .7x 14% 243% 41% 3.3x 2% 2 / 4

9 Career Education CECO 20.77 -21% 73% 1,607 1,160 .5x 12% 789% 33% 3.7x 0% 7 / 5

10 * Zoo Entertainment ZOOG 3.87 -14% n/a 24 23 .3x 15% 156% >99% 2.6x 0% 1 / -

11 VirnetX VHC 12.47 -68% 60% 618 540 n/m 12% infinite 45% >9.9x 0% 2 / 3

12 * BioDelivery Sciences BDSI 3.22 -34% 33% 78 55 .8x 11% infinite 1% >9.9x 0% - / -

13 GT Solar SOLR 10.55 -54% 13% 1,318 1,136 1.4x 11% infinite 36% >9.9x 0% 10 / 14

14 * Biostar Pharma BSPM 1.84 -12% 199% 50 33 .5x 34% 78% 29% 1.2x 0% - / -

15 * ZST Digital Networks ZSTN 5.96 -26% 58% 70 46 .3x 37% 74% 27% 1.0x 40% 1 / -

16 * IDT Corp. IDT 23.69 -74% 27% 545 327 .2x 11% infinite 6% 2.9x 13% 6 / 1

17 Exceed Company EDS 6.83 -14% 53% 134 39 .1x 27% 78% 8% .6x 0% - / -

18 Nephros NEP 4.56 -39% 121% 135 77 .8x 22% 82% 20% 1.2x 23% - / 2

19 * China Electric Motor CELM 3.07 -1% 222% 67 31 .3x 28% 72% 27% 1.0x 0% - / -

20 Kulicke and Soffa KLIC 8.60 -39% 23% 614 511 .7x 14% 104% 2% 2.2x 2% 14 / 12

21 Lincoln Educational LINC 14.77 -34% 91% 331 354 .6x 13% 117% 41% 3.0x 5% 9 / 8

22 * Vertro VTRO 3.50 -52% 107% 25 19 .5x 10% infinite n/m 6.0x 9% 6 / 6

23 Veeco Instruments VECO 48.06 -39% 13% 1,952 1,417 1.5x 11% 248% 4% 2.8x 1% 4 / 6

24 China Valves CVVT 5.26 -3% 182% 188 167 .9x 30% 66% 25% 1.4x 0% - / -

25 * LTX-Credence LTXC 8.45 -41% 34% 418 293 1.1x 13% 101% n/m 2.8x 2% - / 5

26 Gulf Resources GFRE 7.01 -10% 74% 244 175 1.1x 26% 65% 26% 1.3x 14% 6 / 1

27 SkyPeople Juice SPU 4.37 -10% 69% 112 76 .9x 21% 66% 31% 1.1x 0% - / -

28 America’s Car-Mart CRMT 24.37 -16% 24% 258 316 .9x 10% 192% 37% 1.4x 1% 1 / 1

29 China Ceramics CCCL 6.62 -24% 53% 109 80 .5x 36% 58% 26% .8x 0% - / -

30 * LGL Group LGL 13.91 -72% 150% 31 28 .6x 28% 61% n/m 1.7x 13% 9 / 2

31 Actuate BIRT 4.83 -18% 26% 222 183 1.4x 10% infinite 26% 7.2x 4% 6 / 7

32 SciClone Pharma SCLN 3.94 -47% 14% 188 135 1.7x 12% 97% 4% 2.4x 0% - / -

33 Xyratex XRTX 11.02 -5% 86% 334 243 .2x 20% 61% n/m .9x 0% - / -

34 * Primoris Services PRIM 9.14 -39% 9% 451 413 .4x 10% 126% 40% 6.1x 3% 3 / 2

35 * PMC-Sierra PMCS 7.60 -10% 28% 1,773 1,676 2.6x 9% infinite 27% 6.0x 0% 5 / 8

36 * Amtech Systems ASYS 21.54 -62% 43% 203 150 .9x 10% 99% 39% 2.4x 2% 8 / 7

37 * Entropic Comms ENTR 7.55 -44% 85% 644 498 2.4x 11% 69% n/m 2.6x 0% 8 / 8

38 * Integrated Silicon ISSI 8.92 -27% 56% 237 163 .6x 14% 57% 1% 1.3x 0% 1 / 1

39 * Synaptics SYNA 26.85 -11% 26% 910 696 1.2x 9% 126% 11% 2.9x 0% 6 / 6

40 * Evolving Systems EVOL 6.91 -10% 21% 74 64 1.7x 9% 413% 12% 5.8x 2% 5 / 2

41 Cornerstone CRTX 5.80 -13% 31% 149 98 .8x 11% 70% n/m 3.2x 56% 2 / 3

42 Medicis Pharma MRX 29.92 -30% 9% 1,818 1,283 1.8x 8% infinite 40% 3.4x 1% - / 2

43 Amedisys AMED 35.73 -36% 80% 1,054 1,115 .7x 9% 173% 39% >9.9x 1% - / 3

44 * Advanced Battery ABAT 3.67 -18% 19% 281 169 1.7x 16% 48% 16% 1.5x 0% - / 1

45 * Full House Resorts FLL 3.66 -39% 37% 66 53 1.6x 9% 171% 24% 2.8x 3% 1 / 2

Company website SEC Y! Price Charts Proxy Y!

* New additions are highlighted.

Screening criteria: ► MV < $2 billion ► ADRs and banks excluded ► Enterprise value to MV < 1.5

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 80 of 118

RadioShack (RSH) – Ivory, LSV, Tiger Consumer Services: Retail (Technology), Member of S&P 500

Fort Worth, TX, 817-415-3011 radioshackcorporation.com

Trading Data Consensus EPS Estimates Valuation Price: $14.10 (as of 3/18/11) Month # of P/E FYE 12/31/10 8x 52-week range: $13.90 - $24.00 Latest Ago Ests P/E FYE 12/31/11 8x Market value: $1.5 billion This quarter $0.36 $0.39 14 P/E FYE 12/30/12 8x Enterprise value: $1.6 billion Next quarter 0.40 0.43 14 P/E FYE 12/30/13 6x Shares out: 105.8 million FYE 12/31/11 1.72 1.80 16 EV/ LTM revenue 0.3x

Ownership Data FYE 12/30/12 1.86 1.95 14 EV/ LTM EBIT 4x Insider ownership: <1% FYE 12/30/13 2.24 2.32 2 P / tangible book 1.9x Insider buys (last six months): 8 LT growth 8.0% 8.0% 2 Greenblatt Criteria Insider sales (last six months): 6 EPS Surprise Actual Estimate LTM EBIT yield 24% Institutional ownership: 92% 2/22/11 $0.51 $0.53 LTM pre-tax ROC 45%

Operating Performance and Financial Position ($ millions, except Fiscal Years Ended December 31, LTME FQE FQE per share data) 2004 2005 2006 2007 2008 2009 2010 12/31/10 12/31/09 12/31/10 Revenue 4,841 5,082 4,778 4,252 4,225 4,276 4,473 4,473 1,318 1,368 Gross profit 2,435 2,267 2,129 2,026 1,923 1,963 2,011 2,011 579 561 Operating income 560 350 157 382 322 369 375 375 132 103 Net income 337 267 73 237 189 205 206 206 76 57 Diluted EPS 2.08 1.81 0.54 1.74 1.47 1.63 1.68 1.69 0.60 0.51 Shares out (avg) 161 148 136 135 129 125 121 121 126 110 Cash from operations 353 363 315 379 275 246 155 155 122 (2) Capex 229 171 91 45 86 81 80 80 19 33 Free cash flow 123 192 224 334 189 165 75 75 103 (35) Cash & investments 438 224 472 510 815 908 569 569 908 569 Total current assets 1,775 1,627 1,600 1,567 1,792 2,016 1,779 1,779 2,016 1,779 Intangible assets 47 40 8 5 37 39 41 41 39 41 Total assets 2,517 2,205 2,070 1,990 2,254 2,429 2,175 2,175 2,429 2,175 Short-term debt 56 41 195 61 39 42 357 308 42 308 Total current liabilities 957 986 984 748 637 655 908 908 655 908 Long-term debt 507 495 346 348 660 628 332 332 628 332 Total liabilities 1,595 1,616 1,416 1,220 1,393 1,381 1,333 1,333 1,381 1,333 Preferred stock 0 0 0 0 0 0 0 0 0 0 Common equity 922 589 654 770 861 1,048 843 843 1,048 843 EBIT/capital employed 52% 35% 19% 54% 47% 51% 44% 45% n/m n/m Ten-Year Stock Price Performance and Trading Volume Dynamics

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

Mar 11Mar 10Mar 09Mar 08Mar 07Mar 06Mar 05Mar 04Mar 03Mar 02

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 81 of 118

BUSINESS OVERVIEW RadioShack retails consumer electronics in North America. The company, founded in 1967, employs 35,000 people. Seasonality is strongest during the Q4 holiday season, accompanied by a pre-seasonal inventory buildup. INVESTMENT HIGHLIGHTS

• 4,700 company-operated stores in the U.S. and Mexico, 1,265 mobile phone kiosks in the U.S., and 1,220 dealer outlets worldwide. Stores are located in major malls and strip centers, as well as individual storefronts. Each store sells private-label and third-party branded electronics, including mobile and wireline phones, TVs, DVD players, etc.

• Sales and comparable sales up 4.6% and 4.4%, respectively, in 2010, driven by growth in the Sprint and AT&T postpaid wireless businesses, prepaid handsets and airtime, and wireless accessories.

• “The Shack” brand positioning holds promise, as it deemphasizes the tired RadioShack brand.

• Guiding for 2011 EPS of $1.60-1.90. Management expects sales to increase in the low- to mid-single-digit percent range in 2011, driven by wireless.

• Buybacks boosting value. RadioShack repurchased $400 million of stock at $20 per share in 2010.

INVESTMENT RISKS & CONCERNS

• Management transition. Chairman and CEO Julian Day, a highly regarded retail executive who was previously COO of Kmart and Sears, will retire in May. James Gooch (43), who joined from Kmart as CFO in 2006, will become president. Board member Daniel Feehan will become non-exec. chairman.

• Disappointing performance of T-Mobile postpaid business in Q4. RadioShack alleges that T-Mobile has “materially breached” its deal with RadioShack.

• Kiosk segment EBIT to decline $10-15 million in 2011, reflecting the impact of discontinuing Sam’s Club kiosks, partially offset by ramping up Target Mobile kiosks. Kiosk EBIT should grow in 2012.

• Capex to increase to $100-125 million in 2011, up from $80 million in 2010 and $81 million in 2009.

• Competition from other electronics retailers and discounters, including Walmart and Best Buy. The company’s wireless phone kiosks compete against providers such as AT&T and Sprint Nextel.

• Commoditization due to Internet-based price discovery. While some consumers may value the service of RadioShack, many turn to the Internet to save money on big-ticket items. Some may come to a store to get educated but ultimately buy online.

SELECTED OPERATING DATA FYE December 31 2005 2006 2007 2008 2009 2010 ∆ sales +5.0% -6 0% -11.0% -0.6% +1.2% +4.6% ∆ comparable sales +0.9% -5.6% -8.2% -0.6% +1.3% +4.4% % of revenue by segment: Company stores 88% 85% 86% 85% 85% 85% Kiosks 5% 7% 7% 7% 6% 6% Other 7% 7% 7% 8% 9% 9% Sales growth by major segment: Company stores 0% -9% -11% -1% 1% 4% Kiosks 370% 30% -13% -5% -12% 9% Number of locations (period end): Company stores1 4,972 4,467 4,447 4,653 4,680 4,697 Dealer, other outlets 1,711 1,596 1,484 1,411 1,321 1,219 Kiosks2 777 772 739 688 562 1,267 Total locations 7,460 6,835 6,670 6,752 6,563 7,183 Change (y-y) 0% -8% -2% 1% -3% 9% EBIT margin by segment: Company stores 20% 17% 21% 20% 19% 18% Kiosks -5% -7% 5% 3% 6% 8% Other 10% 0% 17% 13% 11% 11% Unallocated -11% -11% -10% -11% -9% -8% Total EBIT margin 7% 3% 9% 8% 9% 8% % of revenue by product category: Wireless 34% 35% 33% 33% 38% 48% Accessories 20% 23% 24% 27% 24% 19% Personal electronics 15% 16% 15% 13% 11% 9% Modern home 13% 13% 13% 13% 14% 12% Other 17% 14% 14% 14% 13% 12% ∆ shares out (avg) -8% -8% 0% -5% -2% -3% ∆ shares out (end) -15% 1% -3% -5% 0% -16%

1 Average store size: 2,482 sq. ft. for company-operated U.S. stores (4,486 at yearend 2010) and 1,289 sq. ft. for company-operated Mexican stores. 2 Average store size: 49 sq. ft. as of yearend 2010. COMPARABLE PUBLIC COMPANY ANALYSIS

P / This Next MV EV EV / Tang. FY FY ($mn) ($mn) Rev. Book P/E P/E BBY 12,430 13,330 .3x 3.9x 10x 9x GME 3,170 3,240 .3x 6.3x 8x 7x HGG 560 580 .3x 1.9x 13x 11x CONN 140 560 .7x .4x 22x 11x RSH 1,490 1,560 .3x 1.9x 8x 8x

MAJOR HOLDERS CEO and chairman Day 3% | Other insiders 1% | FMR 13% | BlackRock 7% | Ivory 5% | LSV 5% | Tiger Consumer 3% RATINGS VALUE Intrinsic value materially higher than market value? DOWNSIDE PROTECTION Low risk of permanent loss? MANAGEMENT Capable and properly incentivized? FINANCIAL STRENGTH Solid balance sheet? MOAT Able to sustain high returns on invested capital? EARNINGS MOMENTUM Fundamentals improving? MACRO Poised to benefit from economic and secular trends?

THE BOTTOM LINE RadioShack’s performance has improved markedly over the past three years, with CEO Julian Day, formerly of Kmart, deserving much credit. RadioShack posted a 4% comparable sales increase in 2010 and has been buying back stock below our estimate of fair value, making this one of the more compelling small-cap ideas we have encountered recently. A caveat is that consumer electronics retailing remains a business in which high returns on capital may not be sustainable.

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 82 of 118

RADIOSHACK – OUR ESTIMATE OF THE EQUITY FAIR VALUE RANGE

Conservative Base Case Aggressive

Valuation methodology 8x 2011E EPS 8% trailing FCF yield 6x EV to trailing adjusted EBITDA 1

Consensus estimate of 2011 EPS 2 $1.72 per share Assumed fair value multiple 8x Resulting fair value of equity $13.76 per share Shares outstanding at yearend 2010 106 million Trailing net income $206 million $206 million D&A $84 million $84 million Capex -$80 million Trailing free cash flow $210 million Assumed FCF yield 10% Interest expense, net of interest income $39 million Income tax expense $130 million Trailing adjusted EBITDA $460 million Assumed fair value multiple of adjusted EBITDA 6x Fair enterprise value $2.8 billion Cash and equivalents $569 million Current maturities of long-term debt -$308 million Long-term debt -$332 million

Estimated fair value of the equity of RadioShack $1.5 billion $2.1 billion $2.7 billion $13.80 per share $19.90 per share $25.40 per share

Implied upside to recent stock price ($13.95 per share) -1% 43% 82% Implied valuation metrics based on trailing financials: EV to revenue ($4.5 billion) 0.3x 0.5x 0.6x EV to gross profit ($2.0 billion) 0.8x 1.1x 1.4x EV to adjusted EBITDA ($460 million) 3.3x 4.7x 6.0x Trailing free cash flow yield ($210 million) 14% 10% 8% Implied valuation metrics based on estimated forward financials: Price to low end of management’s 2011 EPS guidance ($1.60) 9x 12x 16x Price to high end of management’s 2011 EPS guidance ($1.90) 7x 10x 13x Price to consensus EPS estimate for 2011 ($1.72) 8x 12x 15x Price to consensus EPS estimate for 2012 ($1.86) 7x 11x 14x Other implied valuation metrics: Price to tangible book ($801 million) 1.8x 2.6x 3.4x EV per full-time employee (35,100) $44,000 $62,000 $79,000 EV per retail location (incl. kiosks) (7,183) $213,000 $302,000 $384,000 EV per square foot (excl. dealer/other outlets) (11.5 million) $130 $190 $240

1 Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for other income or loss. 2 Consensus estimate of 2011 EPS of $1.72 is close to the midpoint of management guidance of $1.60-1.90. Source: Company filings, The Manual of Ideas analysis, assumptions and estimates.

RADIOSHACK – RETAIL LOCATIONS AT YEAREND 2010

Average Store Size At December 31, (sq. ft.) 2010 2009 2008 U.S. RadioShack company-operated stores 2,482 4,486 4,476 4,453 Kiosks 1, 2, 3 49 1,267 562 688 Mexico RadioShack company-operated stores 1,289 211 204 200 Dealer and other outlets 4 n/a 1,219 1,321 1,411 Total number of retail locations 5 7,183 6,563 6,752 1 In April 2009 the company agreed with Sprint to cease an arrangement to jointly operate Sprint-branded kiosks in operation at that date. The agreement allowed RadioShack to operate the kiosks under the Sprint name for a reasonable period of time, allowing it to transition the kiosks to a new format. In August 2009, the company transitioned the kiosks to multiple wireless carrier RadioShack-branded locations. 2 In February 2009, the company signed a contract extension with Sam’s Club through March 31, 2011, with a transition period ending June 30, 2011, to continue operating kiosks in certain Sam’s Club locations. As of December 31, 2010, the company operated 417 of these kiosks. This transition will begin on April 1, 2011, and conclude on June 30, 2011, with the assignment to Sam’s Club of all kiosks operated by the company in Sam’s Club stores. 3 In 2009 the company conducted a test program of kiosk locations in approximately 100 Target stores. In Q3 2010 RadioShack signed a multi-year agreement with Target to operate wireless kiosks in certain Target stores. In August 2010, the company began to open Target Mobile kiosks with the objective of operating kiosks in the majority of Target stores nationwide by mid-2011. As of December 31, 2010, the company operated 850 Target Mobile kiosks, and it expects to operate kiosks in approximately 1,450 Target stores by June 30, 2011. 4 Dealer and other outlets decreased by 102 and 90 locations, net, in 2010 and ‘09, respectively. The declines were driven by the closure of lower volume outlets. 5 In 2010, the company opened 871 retail locations and closed 251 retail locations. In 2009, the company opened 202 retail locations and closed 391 retail locations. In 2008, the company opened 131 retail locations, acquired 200 Mexico company-operated stores, and closed 249 retail locations. Source: Company data.

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 83 of 118

RADIOSHACK – RETAIL LOCATIONS IN THE U.S. AND TERRITORIES The real estate associated with almost all stores is leased rather than owned by RadioShack.

U.S. RadioShack Stores Kiosks Dealers and

Other* Total % of

Grand Total Alabama 49 11 30 90 1% Alaska -- -- 23 23 0% Arizona 76 -- 24 100 1% Arkansas 26 3 38 67 1% California 552 236 39 827 12% Colorado 63 15 31 109 2% Connecticut 70 20 2 92 1% Delaware 19 1 -- 20 0% Florida 302 35 28 365 5% Georgia 102 23 34 159 2% Hawaii 24 -- -- 24 0% Idaho 19 -- 15 34 0% Illinois 173 79 32 284 4% Indiana 98 36 40 174 3% Iowa 34 21 47 102 1% Kansas 37 15 26 78 1% Kentucky 54 5 36 95 1% Louisiana 67 20 17 104 2% Maine 22 7 12 41 1% Maryland 98 13 7 118 2% Massachusetts 114 31 5 150 2% Michigan 120 77 43 240 3% Minnesota 61 80 35 176 3% Mississippi 38 7 18 63 1% Missouri 71 30 52 153 2% Montana 7 -- 27 34 0% Nebraska 20 11 20 51 1% Nevada 38 -- 7 45 1% New Hampshire 32 12 5 49 1% New Jersey 160 41 6 207 3% New Mexico 31 5 14 50 1% New York 330 74 16 420 6% North Carolina 125 22 38 185 3% North Dakota 6 4 5 15 0% Ohio 188 38 27 253 4% Oklahoma 39 -- 29 68 1% Oregon 52 -- 20 72 1% Pennsylvania 211 53 24 288 4% Rhode Island 21 4 -- 25 0% South Carolina 54 8 18 80 1% South Dakota 11 2 12 25 0% Tennessee 67 15 29 111 2% Texas 376 143 83 602 9% Utah 28 8 19 55 1% Vermont 9 -- 8 17 0% Virginia 124 14 36 174 3% Washington 91 6 30 127 2% West Virginia 28 3 8 39 1% Wisconsin 70 38 45 153 2% Wyoming 6 1 16 23 0% District of Columbia 13 -- -- 13 0% Puerto Rico 56 -- -- 56 1% U.S. Virgin Islands 4 -- -- 4 0% 4,486 1,267 1,176 6,929 100%

Source: Company data.

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 116 of 118

This Month’s Top 10 Web Links A Selection of Our Favorite Freely Accessible Internet Resources Click on the link next to each title, or type the Web address into your Web browser:

Prem Watsa’s Letter to Fairfax Shareholders http://bit.ly/icb7Sr

Warren Buffett’s Media Conference in India http://bit.ly/e7CHJ7

Ray Dalio Explains Macroeconomic Concepts http://bit.ly/i6FF8f

Vito Maida of Patient Capital on Holding Cash http://bit.ly/ecDChG

Eric Sprott on Why He Is Bullish on Silver http://bit.ly/gVOIaH

Julian Robertson’s Latest Macro Comments http://bit.ly/if0bXi

Ravi Nagarajan on Investing in Japan http://bit.ly/gyqBtj

Howard Marks: “On Regulation” http://bit.ly/hIDwUk

Notes from Warren Buffett Meeting on March 11th http://bit.ly/fX944M

Value-oriented Equity Investment Ideas for Sophisticated Investors

© 2008-2011 by BeyondProxy LLC. All rights reserved. SUBSCRIBE TODAY! www.manualofideas.com March 31, 2011 – Page 117 of 118

About THE MANUAL OF IDEAS © 2009-’10 by BeyondProxy LLC. All rights reserved. All content is protected by U.S. and international copyright laws and is the property of BeyondProxy and any third-party providers of such content. The U.S. Copyright Act imposes liability of up to $150,000 for each act of willful infringement of a copyright. THE MANUAL OF IDEAS is published monthly by BeyondProxy. Subscribers may download content to their computer and store and print materials for their individual use only. Any other reproduction, transmission, display or editing of the content by any means, mechanical or electronic, without the prior written permission of BeyondProxy is strictly prohibited. Terms of use: Use of this newsletter and its content is governed by the Terms of Use described in detail at www.manualofideas.com. See a summary of key terms below. Contact information: For all customer service, subscription or other inquiries, please visit www.manualofideas.com, or contact us at BeyondProxy, 427 N Tatnall St #27878, Wilmington, DE 19801-2230; telephone: 415-412-8059. Editor-in-chief: John Mihaljevic, CFA. Annual subscription price: $1,285 and up; for detailed information, visit www.manualofideas.com/pmr.html To subscribe, visit www.manualofideas.com/pmr.html General Publication Information and Terms of Use THE MANUAL OF IDEAS is published by BeyondProxy. Use of this newsletter and its content is governed by the Terms of Use described in detail at www.manualofideas.com/terms.html. For your convenience, a summary of certain key policies, disclosures and disclaimers is reproduced below. This summary is meant in no way to limit or otherwise circumscribe the full scope and effect of the complete Terms of Use. No Investment Advice This newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. This newsletter is

distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. It does not constitute a general or personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. The price and value of securities referred to in this newsletter will fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of all of the original capital invested in a security discussed in this newsletter may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Disclaimers There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth in this newsletter. BeyondProxy will not be liable to you or anyone else for any loss or injury resulting directly or indirectly from the use of the information contained in this newsletter, caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in this newsletter. Related Persons BeyondProxy’s officers, directors, employees and/or principals (collectively “Related Persons”) may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter. John Mihaljevic, Chairman of BeyondProxy, is also a principal of Mihaljevic Capital Management LLC (“MCM”), which serves as the general partner of a private investment partnership. MCM may purchase or sell securities and financial instruments discussed in this newsletter on behalf of the investment partnership or other accounts it manages. It is the policy of MCM and all Related Persons to allow a full trading day to elapse after the publication of this newsletter before purchases or sales of any securities or financial instruments discussed herein are made. Compensation BeyondProxy receives compensation in connection with the publication of this newsletter only in the form of subscription fees charged to subscribers and reproduction or re-dissemination fees charged to subscribers or others interested in the newsletter content.

The Manual of Ideas research team is gratified to have won high praise for our investment idea generation process and analytical work.

“I highly recommend MOI — the thoroughness of the product coupled with the quality

of the content makes it an invaluable tool for the serious investor.” —TIM DAVIS, MANAGING DIRECTOR, BLUESTEM ASSET MANAGEMENT

“We do similar work ourselves.”

—GLENN GREENBERG, MANAGING DIRECTOR, BRAVE WARRIOR CAPITAL

“The Manual of Ideas is a tremendous effort and very well put together.” —MOHNISH PABRAI, MANAGING PARTNER, PABRAI INVESTMENT FUNDS

“Outstanding.”

—JONATHAN HELLER, CFA, EDITOR, CHEAP STOCKS

“Your reports provide serious investors with a plethora of bargain stocks and sound advice. I highly recommend them.”

—MIGUEL BARBOSA, EDITOR, SIMOLEON SENSE

“Very impressive.” —SHAI DARDASHTI, MANAGING PARTNER, DARDASHTI CAPITAL MANAGEMENT

“It’s little surprise MOI is a winner. When you start with superior stock screening and

combine it with good judgment, you put yourself in a great position to outperform.” —MARKO VUCEMILOVIC, FOUNDER AND MANAGING DIRECTOR, ALKAR GLOBAL

“This is the best institutional-quality equity research to come along in a long time. It not only unearths companies with compelling risk-reward profiles but also analyzes them with a clear understanding of business economics and competitive dynamics.”

—PAVEL SAVOR, ASSISTANT PROFESSOR OF FINANCE, THE WHARTON SCHOOL

“I am (as always) impressed with your work.” —MARK SPROULE, SCOPIA CAPITAL

“Keep up the great work, you are quickly becoming one of my must-read sources.”

—CORY JANSSEN, FOUNDER, INVESTOPEDIA.COM

FIND OUT WHAT THE BUZZ IS ABOUT.

WWW.MANUALOFIDEAS.COM