BOSTON ( TheStreet) -- Bruce Berkowitz, Morningstar's U.S. stock manager of 2009, has half of his fund's assets in "hated financial-services and real-estate-related companies."

A value-investing guru, Berkowitz is greedy when others are fearful.

The investor runs Fairholme Capital, a mutual fund company with only two funds: the flagship Fairholme Fund ( FAIRX) and the Fairholme Focused Income Fund ( FOCIX), which debuted this year.
Bruce Berkowitz
Bruce Berkowitz of Fairholme Capital

Fairholme Fund has delivered a 255% return since its 2000 inception, compared with a 15% loss for the S&P 500. Berkowitz has delivered outstanding results, in up and down years for the market, by holding a concentrated equity portfolio and a cash coffer, with about 20% of assets in short-maturity corporate debt and cash equivalents. Value-conscious Berkowitz concedes that timing is difficult, so he always has cash on hand to scoop up securities under duress.

Fairholme's mantra: Ignore the crowd.

At the end of the latest quarter, Berkowitz held 23 securities in his equity portfolio. Many of his value picks are laggards, such as AIG ( AIG) and Sears Holdings ( SHLD).

View Berkowitz's Portfolio

Here are 10 cheap, unloved stocks that Berkowitz owns. They've performed miserably over a three-year span and analysts mostly pan them. Still, they may have tremendous potential. The stocks are ordered by book-value multiple, from cheap to cheapest.

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