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EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Look to Buffett's Teacher

This article originally appeared on May 3, 2013 on Real Money. To read more content like this + see inside Jim Cramer's multi-million dollar portfolio for FREE. Click Here NOW.

I want to wrap up my theme for the week and the resulting investable stock ideas. As the annual capitalist Woodstock approaches, my overriding thought is that most investors would be better off paying attention to the man who taught Warren Buffett the important concepts of value investing than to Warren himself. Most of us cannot do what Warren does. If we try to do so with a portfolio of less than several billions and billions of dollars of free money in the form of float, we are pretty much doomed to failure. However, we can easily adapt the principles of Ben Graham that Warren used to pile up the first few hundred million of his fortune.

I ran a screen earlier this week that identified issues that were bargains based on asset value and that also had strong fundamentals, which offer a margin of safety. It has been an interesting and revealing exercise. In The intelligent Investor, Graham mentions that often investors will find businesses for which they have no particular enthusiasm but the bargain nature and margin of safety make them worth buying anyway. That has certainly been my experience with this list.

Trans World Entertainment (TWMC) is a company for which I have no enthusiasm at all. The company operates video and music stores, which is just not a very good business. The company is undergoing something of a transformation with more focus on selling trendy products, including clothing, and it has developed an online presence as well.

The founder and CEO still owns about 50% of the stock, so he has a vested interest in getting things turned around. In the meantime, the stock trades at 75% of tangible book value and has an F Score of 6. The Z-score is 3.4 and the company's market cap pretty much equals its cash balances.

There are some signs of a housing turnaround, although I suspect hedge fund buying of single family homes is skewing the numbers. If housing does rebound strongly, then the furniture business should improve markedly. That will be great news for two of the companies on our list of cheap stocks.

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