Stockpickr: Buffett's Final Four Hopefuls

My interest of late in Warren Buffett's quest to find a potential apprentice is not just for curiosity's sake. The candidates are value-oriented investors, the best kind of investors to piggyback. Here's why:

• They are typically long-term buy-and-hold investors. They don't like to sell a stock until it has reached what they feel is the "intrinsic value" of the company.
• They do an enormous amount of due diligence and research. For example, candidate Ken Shubin Stein's Spencer Capital had several researchers put three months of nonstop work into Tyco(TYC Quote - Cramer on TYC - Stock Picks). This is more than I'm willing to do. And I don't have a bunch of analysts working for me, either.
• They tend to be focused investors, not afraid to take big stakes in a company. I highlighted this trait in my prior articles on Stein and Mohnish Pabrai.
• They tend to average down on dips. They do this with the theory that if the stock price is going lower, the company's shares are simply better values at that point. Most long-term investors do not play with stop-losses. The only type of stop-loss they have is an "information stop-loss" -- that is, if new information about the company comes out that catches them unprepared, they get out of the stock.

Now let's take a look at four more potential candidates for Buffett's job.

First up is super-investor Bruce Sherman, who probably has invested in more companies that Buffett ended up buying than anyone else. He started his Private Capital fund in 1986 and has had an average return of 20% annually ever since.

He recently loaded up on Avid Technology(AVID Quote - Cramer on AVID - Stock Picks), purchasing 4.9 million shares of the digital media software company at an average price of approximately $37.25 per share. The company has a pristine balance sheet, with $172 million in cash in the bank and almost $100 million in cash flows. Avid currently trades at just 12 times cash flows, with analysts expecting revenue to improve over the next year.

Sherman also has been a holder of software giant CA(CA Quote - Cramer on CA - Stock Picks) and hardware name Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks). For the rest of his value picks, check out the Private Capital portfolio page on Stockpickr.

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