The Intrepid All-Cap Fund ( ICMCX) pursues value as it seeks long-term capital appreciation, but portfolio manager Greg Estes doesn't advocate being completely diversified and owning the market. "For us, it's about selecting individual securities that through their cash flows or assets are worth more than what the market has priced them at," Estes says. "Where we're seeing more opportunity -- and we're looking across the entire capital range -- is in large caps. There is a discount in larger-cap stocks for value investors." As of Dec. 31, the Intrepid All-Cap Fund outpaced the S&P 500 over the past one- and three-year time periods. Since its inception in October 2007, the fund has an average annualized return of 3.4%, better than a 4.2% decline on the S&P 500. The $30 million Intrepid All-Cap Fund had 37 stocks as of Dec. 31 with an annual turnover of 86%. The fund has a heavy sector allocation to information technology, health care, financials and consumer discretionary, each accounting for more than 10% of the portfolio. The fund takes a slightly contrarian stance, and one of the most contrarian names in the portfolio currently is Johnson & Johnson ( JNJ). Estes points out the company's recall problems, which range from its flagship Tylenol product to hip replacements. "Certainly, J&J has made some missteps, but we think they'll get through their issues," Estes says. "If you take a longer-term view and you look at the cash flow the company produces, it's pretty attractive. It's a great company that typically gets priced along with the market. But there is a dislocation between what we think it is worth and what the market is pricing it at." Similarly, Estes likes Dell ( DELL) as it is strictly a free cash flow story to him. Estes notes that the company has a net cash position and that founder Michael Dell has recently bought $250 million of the company's shares. "That's a big move and it's a good signal, especially when someone who already had a big ownership position," Estes says. "People get overly fixated with the idea that they're no longer the top desktop manufacturer, but they don't make money off the desktops for personal computing. They make their money on their business relationships and now in storage and networking. It's all about improving the operating margin." Estes also likes insurance companies, specifically Dow component Travelers Co. ( TRV). "Travelers has a management team that is thorough and they explain what is on their books and what they're buying with their money," Estes says. "They did not experience the same issues that a lot of financial firms did when subprime was an issue. They're good at buying back shares and it's trading right at book value. For a financial, that's cheap." Lastly, Estes is a fan of Gilead Sciences ( GILD) due to its leadership position in HIV drugs and good patent protection that extends out for an extended time period. "In addition, the company has a decent pipeline," Estes says. "Gilead is cheaply priced, it has cash flows and a net cash position. Those are all very important things for a pharmaceutical business to have." -- Written by Robert Holmes in Boston. >To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: email@example.com.