I’ll try as much as possible to keep this tradition up every quarter. Today is the day that the 13F’s are released for funds managing over $100m. Below is a list of 4 picks that I find interesting:

1. WellCare Health Plans (WCG) — Pabrai Investments, Fairholme Fund — I don’t know much about healthcare companies, but Wellcare seems like it might be a very low risk, high uncertainty situation. Recently, a summary of Pabrai’s thesis on Wellcare was posted on the Value Investing Congress Blog. Using the last quarter with information available, WCG is trading at an EV/EBIT of about 1.8x (!).

2. EchoStar Corp. (SATS) — Greenlight Capital, Fairholme Fund (spin-out) — Spun off from Dish Network (formerly EchoStar) back in January. Has multiple holdings, including a set-top box business, SlingMedia, and 7 satellites. SATS could be extremely undervalued if you add up the valuations of its separate companies. See the VIC Writeup for more details. Charlie Ergan, Chairman and major shareholder, is extremely smart and should never be underestimated.

3. WellPoint Inc. (WLP) — Springhouse Capital, Greenlight Capital, Fairholme Fund, Berkshire Hathaway, Baupost Group — Quite the lineup. Another beat-down healthcare company, but with less uncertainty. If you net out cash and unrelated investments, enterprise value is about $16B. Pre-tax income in the past year was $5.3B. So, even if WLP has lower earnings going forward, it’s trading for only 3x EBIT. It may pay to find out. (By the looks of it, healthcare companies must have a thing for logos with little swively waves in them.)

4. American Woodmark (AMWD) — Stadium Capital, Akre Capital, Fine Capital — A manufacturer and distributer of wood cabinets. Trading at about 8x TTM pre-tax free cash flow. It looks like they haven’t done well in the last few years, but if they can get back on track this is a very cheap stock. I don’t know a lot about wood prices, but it looks like gross margins have fluctuated widely in the past.

13F buys archive: Third Quarter 2007; Fourth Quarter 2007
Related link: Search for filings on the SEC website

Disclosure: We own a small position in SATS. This is not a recommendation to buy or sell any security.

On Wednesday the 7th, Dr Pepper Snapple Group (DPS) officially began to trade. Its $25 price tag is lower than many expected after the soft-drink maker was spun-off of its parent company, Cadbury Schweppes.

Because spin-offs in general beat the market (and can make for excellent hunting grounds), I’m always looking for potential purchases. DPS stands out because of its well recognized brand names, competitive advantage, and unique spin-off situation.

Cadbury, its prior owner, trades on the London Stock Exchange. But when DPS was spun-off, it traded on the NYSE. This is a problem for mutual funds and institutions in the UK that owned Cadbury. They can’t or don’t want to hold a foreign-traded security. So more than likely (this may have already started), these institutions will sell their newly received DPS shares without regard to price.

Some of the brands of DPS include: Dr Pepper, Snapple, 7 UP, Motts, Sunkist, A&W, Hawaiian Punch. This post isn’t meant to be a complete analysis of the investment, just my initial thoughts on a potential opportunity.

Comparisons

The table below compares DPS with other soft-drink and consumer goods companies.

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ValueVision Media (VVTV) – $5.58

Although I planned on writing up my entire thesis for VVTV, things got a little busy and I never ended up finishing it. Thankfully, someone over at Value Investors Club has done my job for me. Click here to see david101′s writeup on ValueVision (available via a 45-day delay).

I would also reiterate that under $6 per share this is a very “heads I win, tails I don’t lose much” type of investment. There is uncertainty surrounding a few different aspects of the investment (like cable distribution costs, the transition to digital, new internet ventures) but little to no downside based on hard assets and cash. If a few things go right ValueVision could be worth 2-3x its current price. In addition to the information provided in the above writeup, I’ll add a few of my thoughts below:

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There have been a lot of articles and blog posts recently regarding the split-up of IAC/InterActiveCorp (IACI). Basically, IAC is an internet/retail/media conglomerate that has been trading at a discount because of its complexity. Last Monday, Barry Diller announced that IAC will be splitting up into 5 separately traded public companies. I won’t go into too much detail as it has been discussed more thoroughly elsewhere. (A few good descriptions can be found here and here).

The two divisions that I’m most interested in as businesses are HSN and Ticketmaster. Below I go over HSN in more detail. Out of all five, I think that (depending on timing) HSN, Interval and LendingTree will have the most downside pressure once spun off.

I don’t know much about LendingTree. But with what’s going on in the housing and mortgage sectors right now, investors will probably dump it in favor of IAC’s more desirable properties. Namely Ticketmaster and the IAC internet properties.

Home Shopping Network

The Home Shopping Network (HSN) is the largest division of IAC in terms of sales. Out of the businesses that IAC currently owns, HSN was also the first to be acquired by Barry Diller. It sells a variety of products over the air, 24 hours a day, in over 89 million homes across the world. HSN has a 30% share of the home shopping market, with QVC(owned by John Malone/Liberty Media) and ShopNBC accounting for the other 60% and 10%, respectively.

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MAIR Holdings (MAIR) – $5.17

MAIR is a very low risk / high uncertainty opportunity that has identifiable catalysts to unlock value in a reasonable amount of time. MAIR is a holding company that at the moment owns a very small regional airline (Big Sky Airlines) but is a majority cash and investments. It previously owned Mesaba Airlines, which went bankrupt in 2005, and was subsequently sold to Northwest Airlines (NWA) in April of this year. The current valuation numbers are below: ($Millions)

I look at this value as the downside, assuming management doesn’t do something stupid with the cash. There are two activist investors (owning over 14% of the company) pushing MAIR to distribute excess cash and sell Big Sky, so I’m hoping this helps things out a bit. The restricted cash account is collateral for a plane hangar MAIR guaranteed to Mesaba bondholders. As long as MAIR finds a sublessor for the hangar by March 2008, the $13mm will be released.

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