BOSTON ( TheStreet) -- Long/short hedge-fund manager David Tepper, who runs Appaloosa Management, added 11 new equity positions during the fourth quarter. Tepper's funds doubled in 2009 as he purchased securities of beleaguered financial firms amid the subprime meltdown. Tepper, a deep-value investor, uses a concentrated strategy, taking big positions in a handful of equities, preferred shares and debt obligations that he considers cheap.

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During the fourth quarter, Tepper scooped up shares in companies ranging from dairy-sellers to carmakers. Here is a look at Tepper's 11 new stock positions. They may outperform indices in 2011.

11. Dean Foods ( DF), the fourth worst-performing S&P 500 stock over the past 12 months, has weaseled its way into David Tepper's heart.

He purchased 11 million shares in the company. Dean sells milk, cream, half-and-half, soy milk, juice and other beverages. Its fourth-quarter net income tumbled 51% to $24 million and earnings per share plummeted 59% to 11 cents. Dean's gross margin narrowed from 28% to 24% and its operating margin tightened from 5.6% to 3.3%. The stock has fallen 32% in the past year. Of the 15 analysts covering Dean, 14 rate its stock "hold" and one ranks it "sell." None rank it "buy." Tepper is happy to play contrarian. Here is a look at the stock's valuation:

Forward Earnings Multiple: 13 (19% Industry Discount)
Trailing Earnings Multiple: 11 (53% Industry Discount)
Book Value Multiple: 1.2 (71% Industry Discount)
Cash Flow Multiple: 3.3 (83% Industry Discount)
Sales Multiple: 0.2 (90% Industry Discount)


10. Flagstar Bancorp ( FBC) is a holding company, with thrift and mortgage finance subsidiaries operating in Michigan, Indiana and Georgia.

Its stock has dropped 38% in the past six months, to less than $2 a share. Tepper purchased more than three million shares in the company during the fourth quarter, becoming its eleventh largest shareholder. Flagstar's fourth-quarter net loss more than doubled to $187 million, but it narrowed on a per-share basis to 74 cents, due to dilution. Revenue declined 9.3%. Based on projected earnings and sales per share, Flagstar is cheap. Its forward earnings multiple of 11 and sales multiple of 1 reflect 61% and 70% discounts to financial peer averages.

No analysts recommend buying Flagstar, but all 12 of its largest investors amplified their stakes during the fourth quarter. Hedge-fund Greenlight Capital is another shareholder.

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