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Use This Filing to Trade Like Jeff Berkowitz

Now let's take a look at some of the larger positions in the portfolio.

Collector's Universe (CLCT) is an authentication service for online auctions (and non-online) of collectibles like coins and autographs. The company has a $129 million market cap, $55 million in net cash, and $8.5 million in cash flows over the past 12 months. This stock, which I have in TheStreet.com Internet Review, is down a bit on last weekend's Barron's article. But it's worth noting that today, Shamrock Activist Fund filed a 13D stating it's been averaging down every bit of the way -- in the $16s, $15s, and yesterday in the $14s.

Blue Coat Systems (BCSI) is a provider of security appliances for networks that carries a $267 million market cap, $70 million in net cash, and EBITDA of $15 million. Also, Blue Coat has had 43% year-over-year revenue growth and a return on equity of 18%.

The security software company McAfee (MFE) has a $3.2 billion market cap, $1.2 billion in cash with no debt, and EBITDA of $287 million, giving it a multiple of enterprise value over cash flows of less than 9.

Microsoft (MSFT) consistently finds itself in the value bucket these days, with its $275 billion market cap, $34 billion in cash, no debt, and cash flows of $15 billion and growing while still keeping a return on equity at 28%.

EMC (EMC) offers a $33 billion market cap, $4 billion in net cash and $2.2 billion in cash flows.

In general, Berkowitz & Co. seems more than willing to load up on beaten-down stocks that have great balance sheets that might not be best of breed. However...

In some cases, the fund seems to take a top-down approach, starting with a stance on the growth prospects of a sector and then trying to find the fastest-growing companies in that sector and placing its bets on several of the stocks. For instance, consider its stakes in the online-homebuying sector.

Ziprealty (ZIPR) has an $185 million market cap, $89 million in net cash and $8.7 million in cash flows over the past 12 months. (Note that even in the top-down approach, the firm still picks the stocks that have the bottom-up characteristics described above.)

Housevalues.com (SOLD) offers a $343 million market cap, $88 million in net cash and $24 million in cash flows.

Homestore.com (HOMS) carries a $923 million market cap, $58 million in net cash and $20 million in cash flows from operations. (This is the smallest of the three positions.)

I plan to do more of these types of articles, and please send me an email and tell me your thoughts on this one.

P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to TheStreet.com's RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

At the time of publication, Altucher and/or his fund was long CLCT, although positions may change at any time.

James Altucher is a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of Trade Like a Hedge Fund and Trade Like Warren Buffett. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback; click here to send him an email.

Interested in more writings from James Altucher? Check out his newsletter, TheStreet.com Internet Review. For more information, click here.

TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.

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