Stocks Value Investing Legends Are Buying

Scraping together enough coin to win the annual luncheon auction with Warren Buffett is probably beyond the means of most investors. With the proceeds going to benefit charity, last year's winning bidder forked over $1.68 million for the privilege.

But many investors would love the chance to chow down with Buffett and pick his brain on his investment philosophy and stocks he's considering buying. The same could probably be said for many other value investing legends, too.

Feast or famine
Maybe we can't break bread with the greats, but we can peek at their stock ideas through their SEC filings. What we'll do here is pore over the reports of some of the top investors and see which stocks they've chosen as their best investments. We'll then check in with Motley Fool CAPS members to see if they agree.

Obviously, there are a few caveats with a strategy of piggybacking on the masters.

• There's a delay from when the stocks were bought and when they file their paperwork. If they were a good deal back then, are they still a good deal today? Have they sold out since?

• These legends may be hot investors now, but that can change in an instant. Bill Miller was a wunderkind for beating the market 15 years in a row -- then he went cold for three. He came back in 2009, but we don't know what 2010 will bring.

Contrary to popular opinion
That's why we say you'll need to do further research, but with those points in mind let's take a look at Jean-Marie Eveillard, senior advisor at First Eagle Investment Management, whose funds have about $39 billion in assets under management. Eveillard is a well-known value investor in the broad range of opinion between the Benjamin Graham and Warren Buffett schools of thought.

Jean-Marie Eveillard's investing philosophy employs bottom-up fundamental analysis, broad diversification, and a long-term mindset. It can perhaps best be summed up by The First Eagle Funds core values:

We believe that preserving capital is the foundation to growing wealth. We don’t need to win everyday; we just need to win over time.

Fund: First Eagle Investment Management
Website: www.feim.com
No. of Stocks Owned: 328
Top 5 Holdings: Berkshire Hathaway (NYSE: BRK-A), Gold Fields, American Express (NYSE: AXP), Microsoft (Nasdaq: MSFT), 3M
Top Sectors: Financials, Basic Materials, Consumer Discretionary, Information Technology

Unlike some of the investing legends we've looked at, Eveillard's portfolio is highly diversified adding dozens of new positions at a time, but you can look at some of his best ideas below. These five companies represent completely new additions to his portfolio at the time of the filing and were some of the largest purchases relative to the size of the portfolio.

Source: SEC Filings.

Naturally, we want you to look a bit closer at these stocks before buying. You can get low-priced appliances in the dent-and-ding section of your home-remodeling superstore, but their quality might not be so good. Same thing here: Make sure there's nothing seriously wrong with the company before you plug it into your own portfolio.

Price is what you pay
"In gold we trust" seems to be Eveillard's motto these days, as he added junior gold miner Northgate Minerals to his portfolio of gold stocks. Gold Fields was already one of his top holdings, but he also owns stakes in Kinross Gold, Goldcorp (NYSE: GG), Newmont Mining (NYSE: NEM), Barrick Gold, and seven other players.

Considering he's not a fan of Fed chairman Ben Bernanke or his inflationary monetary policies, this isn't so surprising. Eveillard hews to the line of the late economist Peter Bernstein, that gold is "insurance against extreme outcomes." Bernanke now, but also Alan Greenspan before him, is leading us toward such extremes.

You probably won't find any argument from CAPS member bottomtroll, who sees Northgate Minerals as being a key component of any investor's arsenal:

A junior gold, sure, but one with potential to survive a tough 1st half of 2010. Commodities will be back, and stronger, or we all may as well say farewell. If we EVER get out of this financial joke of a world system, NXG will be there.
I'm really starting to not care about stocks at all, favoring hands-on metals, guns and food...and tools!

Value is what you get
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service, and tell us whether these stocks are as good a value as these investing legends think they are.