Stockpickr: Another Buffett Wannabe

For instance, in my article on the Dogs of the Magic Formula, I mentioned that Pabrai likes Cryptologic(CRYP Quote). This is a classic case of a company with a great balance sheet, strong cash flows and a strong underlying business that has a cloud over it at the moment, but not a big enough cloud to really ruin the business.

Another company Pabrai has invested in is Pinnacle Airlines(PNCL Quote). Pinnacle has been hit by the general malaise of the airline industry. The company is akin to an airline-for-hire in that it used to pad out the fleet for Northwest Airlines and fly many of its routes. With Northwest in bankruptcy, Pinnacle won a settlement that eliminated restrictions on its ability to fly for other major carriers.

The market has remained focused on the fact that Pinnacle's major customers went bankrupt. However, I bet Pabrai is focusing on the fact that the company managed to stay in business and clean up its balance sheet and will now win new customers over the next year while maintaining a healthy profitability.

Another Pinnacle holder is Clinton Group, which is also a hedge fund that likes distressed situations. While I've never seen Pabrai "go activist," Clinton Group regularly does. In December, for instance, it filed a 13D on Griffon(GFF Quote), stating that it owned 5.2% of Griffon's shares and that it was interested in working with management to evaluate strategic alternatives for the company.