Federated Investors (FII) is a company widely bashed by the sell side, and subject to panic swings by investors worried about money market fund regulation. Indeed, Stern Agee just placed FII at the bottom of its list of money managers, with a sell rating despite the fact that this company:

1) trades at a multiple ~15% cheaper than its peers in the industry (around 13x earnings),

2) has a sum of the parts valuation at least 50% higher than where the stock is trading today,

3) grew its equity AUM by 8% in Q1, and its fixed income assets by 16% yoy, and

4) has paid out an astonishing $10.30 in cash dividends (almost half of its current share price) just in the past 5 years. That is over a pretty tumultuous period too. You would have thought the money management business got creamed in 2008 and 2009. As

Neutral Tandem (IQNT), a telecom switching provider, is a bombed out stock with significant potential upside and minimal downside considering its exceedingly low valuation on trough numbers. This is a turnaround story with quite a bit of hair, but a significant margin of safety. Management has guided to EBITDA for 2013 of $31mm, compared to $72mm last year, the drop primarily the result of a difficult contract renegotiation with its biggest customer, AT&T (T).

With a market cap of $97mm, and $31mm of net cash, the TEV of Neutral Tandem is a mere $65mm. It's trading at 2.4x 2013 EBITDA and at an 11% Free Cash Flow (FCF) yield. Even better, if the company were to sell its non-core Tinet business for around 2x EBITDA or $25mm (25% of what they paid for it 2 years ago), then FCF could approach $13mm. That implies an investor can purchase its core

Conrad Industries (CNRD.PK), a barge/ferry boat builder with 4 shipyards in Southern Louisiana and Texas, is a small cap stock that is simply ridiculously cheap. Because it is 47% owned by the Conrad family, CNRD has limited float and no sellside research coverage, but piles of cash and hard assets on the balance sheet as well as a business model that throws off scads of free cash flow.

Conrad has not lost money since 2004, and given its high FCF characteristics, has accumulated a hefty $11 in cash per share on the balance sheet (including a soon to be paid BP settlement of a couple bucks a share). All in, almost half of Conrad's market cap is in cash. Net of this, Conrad trades a miniscule 3.6x earnings, or 2.1x EBITDA.

Even better, the company is very shareholder friendly, paying a $2 dividend last December as well as authorizing a

EchoStar (SATS) is an undervalued satellite owner that provides high speed Internet for consumers/businesses, as well as broadcasting services for pay TV companies. With a set top box business also in the mix, EchoStar seems to be an amalgamation of lots of disparate businesses. With little sell-side coverage, insiders controlling over half the stock, and confusing segment disclosures, it is largely an unknown company despite a $4.3BB TEV. The good news is that this lack of awareness also makes for an underappreciated, undervalued stock.

Importantly, EchoStar last year launched an upgraded satellite capable of delivering high speed data services to a significant portion of the US. The EchoStar XVI/Jupiter satellite, operating on the high capacity Ka band, now offers significantly improved Internet speeds to rural America, most of whom are stuck in the dinosaur of age of America Online or some other slow dial-up Internet services. Remember 56k baud rates?

Pioneer Southwest Energy (PSE), an oil and gas MLP based in Texas, has sold off lately along with many energy partnerships amidst weak commodity prices and legitimate concerns surrounding accounting practices in the industry. The good news for Pioneer is that, different from Linn Energy (LINE), PSE does not spend dollars purchasing puts to hedge its portfolio. It enters into costless collars and swap contracts to hedge its output. Therefore, there is zero concern at PSE regarding overstated distributable cash flow.

Even better, PSE trades at a bargain 9.04% yield, far higher than Linn's 7.5% yielding units, and sports a reasonable Distributable Cash Flow coverage ratio of 1.06x (almost identical to Linn's supposed DCF coverage ratio of 1.07x). More on Linn's true coverage ratio below.

Pioneer Basics

($ in millions, except per share data)

Pioneer Description

Pioneer Southwest is an MLP formed by Pioneer Natural Resources (PXD) in

Wells Fargo & Company (WFC) is a play on the market regaining confidence in the banking sector, as well as investing in one of the best run banks at a bargain valuation. Despite having spent most of my career in New York in the financial industry, I confess that I rarely purchased financial stocks. They were simply never that cheap pre-crisis, and having started my career at a prop desk at an investment bank, I knew firsthand that banks were run for the benefit of the employees, not the shareholders. Some may dispute this, but when 50-60% of revenue goes to employees via comp, and 10-20% to the shareholders, it doesn't take a genius to realize that top management knows where its bread is buttered.

Sure, stock options and stock grants were always awarded to incent the masses, but back in the day, these percentages were low, say 10-20%. Anyway,

DineEquity (DIN) reported fourth quarter figures this week as well as a new capital allocation strategy. Essentially management plans to put all of the company's future Free Cash Flow into the hands of shareholders. DineEquity, franchisor of over 1,800 Applebee's restaurants and over 1,500 IHOP restaurants, is one of the largest full service franchise restaurant operators in the world. Since the acquisition of Applebee's in 2007, the company has been selling off owned Applebee's restaurants, converting to a pure franchisor of their restaurants (99% as of end of December).

As I will explain, the franchisor model is far more attractive than owning/operating restaurants. Margins are higher, operating leverage non-existent, fees quite stable, and capital expenditure needs are extremely low. In fact, zero capex is required for growth. It's on the franchisee's dime.

Indeed, these businesses should and do trade at premium multiples. In a wild day of trading post

National Oilwell Varco (NOV), a seller of oil rig equipment, has seen its stock price falter lately on concerns of lower rig demand, as well as margin pressure in its Rig Technology Group. From a one-year high of almost $90 a share, NOV now suffers in the high 60s. Investors fear that growth is slowing, that rig orders have peaked, and that declining rig counts in the US will impact margins too. But despite these concerns, the reality is that National Oilwell is one of the highest quality E&P service companies in the world, boasts top management, and long term is a solid secular growth story despite today's low valuation.

In fact, based on 2012 reported earnings, NOV trades at a bargain 11.7x earnings, significantly lower than its peers at 16x earnings, and its own historical average of 18x. National Oilwell has a remarkable 60%

First of all, let me state for the record that I am not a gold bug. I do not linger in my basement salivating over gold bars while babbling about imminent inflation and world chaos. Gold as insurance seems a weak argument to me honestly, as I would rather own Coke or MasterCard, which have pricing power plus a return on capital. (Yes, I own both.) I feel quite confident that people will be using plastic (credit cards) and drinking plenty of caffeinated syrup water 50 years from now. I don't feel too confident that gold will outperform inflation, as stocks tend to do over time. Perhaps keep up with inflation, but not outdo it.

However, given the continued decimation of mining stocks over the past couple of years, amidst a positive secular gold price macro environment (e.g. continued central bank debt monetization), I decided some exposure made sense.

So,

Calamos Asset Management (CLMS), is a classic "cigar butt" Buffett-type investment, ignored by Mr. Market because of its small cap size and convoluted ownership structure. With a family management team that seemingly cares not where the stock trades, Calamos equity is languishing at a price so low, that essentially you are able to buy it and get its asset management business almost for free. That is, at $10 per share, investors get the company's Holdco cash and deferred tax assets, plus the company's Opco cash & investments totaling $8.38, then get an asset management business that will do over $0.70 in EPS.

Translation: net of the cash, you are paying 3.5x earnings for the actual Calamos Asset Management business. There are lots of ways to slice and dice this, but essentially a mere 10x multiple on the company's asset management business (lower than lowest level of the comps) would imply

Crocs, Inc.

Crocs Inc (CROX) today is a solid value stock, trading under 9x trailing earnings, generating impressive 25% ROEs, and growing revenue in the high single digits. With a net cash balance sheet of $3 per share, the stock trades at an 11% FCF yield on TTM figures, and well over 12% on 2013 FCF (that is including growth capex too).

Net of cash, CROX's 7.6x forward P/E ratio is half the level of its peers, who trade today on average at 15x 2013 expected earnings. That is despite better margins and higher ROEs at CROX.

Overview:

Background:

From the website:

"Celebrating its 10th anniversary in 2012, Crocs, Inc. is a world leader in innovative casual footwear for men, women and children. Crocs offers several distinct shoe collections with more than 300 four-season footwear styles. All Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that

An investment in Assisted Living (ALC) is a simple real estate play based on the company's owned assisted living facilities. This summer, after the former CEO was abruptly terminated, as well as an acquisition of leased facilities to quash a lawsuit, ALC's stock was punished severely. From a high of almost $19 a share in May 2012, ALC has fallen over 50% to today's $9.27 level.

At these prices, investors are able to purchase owned assisted living units at a price of $50,000 per unit, well below virtually any individual sales price, new build cost, or comp trading level on the Street. Not to mention the fact that an investor also gets the operating businesses (the leased facilities) for free. With real estate prices heading back up, the real estate value here also likely grows.

Also last month, management announced that a Special Committee of the Board would "explore strategic

While a bit lumpy overall, 2012 was a pretty good year. The S&P is up approximately 14% year-to-date, and a number of names I personally own did quite well too. Admittedly, there were a few losers in the bunch, notably with Tronox (TROX) dropping 25% within a matter of weeks after my recommendation, but it has bounced back lately and was recently touted in Barron's as a solid pick for 2013 (I am sure because they read my article on it). Generally, though, it is impossible for even the best investors to pick winners 100% of the time.

Personally, I develop a thesis on why a stock is cheap and will outperform. They are written up here much of the time. The problem is, there are far too many un-knowables in this world, and unforeseeable events can wreck even the most well thought out stock thesis. As I am

Ellington Financial (EFC), a partnership investing in non-Agency and Agency mortgages, is an investment in a hedge fund-like structure with one of the best mortgage teams in the business. At a price 11% below book value, Ellington trades cheaper than almost all of its peers, yet has generated far better Returns on Equity (ROEs) averaging 13% per year since December 31, 2007. Even better, EFC offers a current yield of 13% today.

Given what the Fed has recently announced in terms of purchasing mortgage backed securities and long dated treasuries, Ellington looks to be a solid pick for 2013 based on its historical track record and current focus on lower priced, non-Agency paper that will continue to directly benefit from higher prepayments and improving home prices.

This is not a company that has juiced its ROEs with massive leverage either. Indeed, Ellington is the least levered mortgage

Atlas Pipeline Partners (APL) last week announced a $600mm acquisition of Cardinal Midstream, and the stock promptly gave up a surprising $250mm in market cap. That is despite the fact that the deal is expected to actually be accretive on a Cash Flow per Share basis by 3-5% next year, and 8-10% in 2014. After announcing the acquisition and an equity offering to pay for it, Atlas priced a stock deal of 11mm units at $31.00, well below prices near $36 just a few weeks ago, and down 21% from the highs in early 2012.

On the whole, fears of equity dilution, overpaying for Cardinal, and MLP tax treatment worries have driven Atlas to unwarranted levels. The facts are compelling though: this is a quality midstream MLP with tons of organic growth potential, operating in solid regions of the US and trading at a very attractive 7.4% dividend

North Atlantic Drilling Limited (NATDF.PK), operator of eight offshore drilling rigs, trades at a substantial 45% discount to its offshore drilling peers at only 7x earnings, and sports a hefty 9% dividend yield. Given that the Norwegian company listed only 24% of its shares via a private placement in February 2011, this minority-owned stake has traded in limited fashion on the pink sheets in the US. With a grand total of one sell-side analyst covering NATDF on the Street today, awareness has been virtually nil and, with a recent price at $2.00 per share, the stock has been ignored by many who might view this as a micro-cap penny stock.

However, the TEV of this company is a solid $4.6B, and a 5-for-1 reverse stock split has turned a $2 share price into a $10 share price. Even better, the company has recently filed an S-1 Registration statement with

Aircastle Limited (AYR) is a lessor of freighter and passenger aircraft, substantially underappreciated by the market on residual liquidity fears and poor technicals. Its biggest holder and the founder of the business, Fortress Investment Group (FIG), has finally exited its position after a secondary offering this summer, as well as via direct share buybacks in the third quarter of this year.

Going forward, the lack of selling pressure from Fortress as well as a $50mm buyback plan should provide support for AYR stock. Even better, Aircastle's earnings prospects look particularly strong over the next 12 months as lower cost debt in addition to growth in new aircraft indicate that earnings next year likely beat Street estimates of $1.70.

In fact, in the third quarter, Aircastle reported $0.59 in EPS (excluding unusual charges) as well as generating exactly $0.59 in FCF per share (that is assuming D&A is a decent proxy

A Great 7% Cash Alternative Bond

Nexen Inc (NXY), a Canadian oil and gas entity on the verge of being acquired by China's CNOOC, has an investment grade rated 7.35% subordinate bond issue that is a solid cash alternative. Trading on the NYSE, these Nexen bonds can purchased under the ticker NXYPRB at near par.

Nexen is under 1.0x levered, has tons of cash on the balance sheet with virtually no maturities until 2017, and is a great place to park cash at a 7% yield with limited volatility. While this subordinated bond is redeemable at any time, arguably it's safer than US Treasuries given Nexen's strong balance sheet and prized assets (assets that CNOOC eagerly wants).

These 7.35's trade a hair over par, at $25.31 (par is $25), which implies a current yield of 7.3%. On a 1 year yield to worst basis, the yield is 7%, a nice

What would you say if I told you that you could buy Japan's best wireless telecom carrier (growing at 8%), coupled with the Google of Japan, for only 3.3x EBITDA? Investment grade rated with 40% ROEs, the firm has tripled its EPS since 2008. Oh, and I would throw in an $11BB stake in Alibaba for FREE, an extremely capable founder/CEO who owns tons of stock, plus an option to buy 70% of Sprint shares for $6.25, which are likely worth $10+ in 2 years.

This is the value proposition for Softbank (SFTBY.PK) today, ticker 9984 out of Tokyo, also with an ADR that trades under the ticker symbol SFTBY in the US.

This week, Sprint (S) and Softbank confirmed that talks were in the works for Softbank to acquire a majority plus stake in Sprint. Reportedly, management of the Japanese conglomerate would like to pay less than

Tronox (TROX), a producer of Titanium Dioxide (TiO2) primarily used to whiten paint and plastic, has been severely pummeled over the past few months. From its April peak of $38 per share, the stock now trades around $22.65, having given up over 40% of its value despite the fact that EBITDA looks likely to fall only 10-15% this year from its 2011 levels (on a proforma basis).

With the stock at an estimated 19% FCF yield (5.2x cash earnings), and a 4.4% dividend yield, TROX is a compelling buy at today's prices.

Basics

Company: Tronox Limited

Ticker: TROX

Recent Price: $22.65

Shares: 112mm (proforma for Exxaro acquisition and post share buyback)

Market Cap: $2,534mm

Debt, net of cash: $959mm (added $400m for recent buybacks)

TEV: $3,493mm

EBITDA guidance 2012 midpoint: $831mm (919mm less Minority Interest EBITDA)

TEV/ EBITDA:4.2x (proforma for Exxaro deal)

FCF 2012e: ~$4.33/share

FCF 2013e: ~$3.00/share

Note:Tronox implemented