Great investors go where others won't. They're dedicated to turning over as many stones as necessary to uncover those few gems that provide the difference between winning and losing. One way to find them is studying what others own. Often I'll peruse the websites of pension funds looking for investment ideas I hadn't thought about. Recently, an article at Institutional profiling the Alaska Permanent Fund and its chief investment officer, Jeff Scott, lead me to check out its website. What I found was without a doubt the best state-run pension fund presentation I have ever seen. Go and check it out for yourself. In the meantime, here are a few nuggets from my visit.

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Micro Cap - The Dixie Group (Nasdaq:DXYN)
The Alaska Permanent fund owns 29 textile and apparel stocks. Its greatest unrealized loss is from the Dixie Group, a Tennessee-based carpet manufacturer whose $39 million market cap is 60% of its net tangible assets, which are $65 million, or $5.06 a share. Its second-quarter results were decent. Revenues showed double-digit growth and the company delivered a small operating profit. Alaska paid $12.81 a share for the company so it'll be holding them for a while. It will take quite some time for Dixie's shares to recover, but the good news is that the last time the stock traded this high was in June 2007. My guess is it'll edge toward a full recovery sometime in 2013. If you can wait this long, the potential returns are enticing.

Small Cap - American Eagle Outfitters (NYSE:AEO)
As of the end of June, Alaska's 141 retail investments totaled $729 million. The fund owns 280,037 shares of American Eagle and sits on unrealized losses of $496,000, which is better than where it sat at the end of the second quarter. AEO's stock is up 25% since June 30 compared to 8.8% for the S&P 500. Although its second-quarter gross margin dropped by 250 basis points to 36.8% and operating margins fell by 80 basis points to 7.1%, there's a lot to be positive about, including a lack of debt, $433 million in cash and Chairman Jay Schottenstein's purchase of 500,000 shares on September 8 at $13.58 a share. Once AEO gets past the recent failure of its Martin + Osa brand concept, it'll be fine.

Mid Cap - Safeway (NYSE:SWY)
The Alaska fund also owns several grocery stores, including Kroger (NYSE:KR), SuperValu (NYSE:SVU) and Safeway among its 117 food and beverage holdings. It paid about $27 a share for its Safeway stock and as of September 14, had an unrealized loss of $3 million. Last September, I picked Safeway when it was trading at below $19 even though there were questions about its business. Noted value investor Charles Brandes also owns 14.4 million shares. While questions still exist about Safeway's profitabillity as it continues to struggle with lower profits from increased pricing competition, I believe that pricing pressures will eventually dissipate and higher profits will return. In the meantime, don't expect much from the stock, up or down. (For more information on how to assess Safeway's stock, see Evaluating Grocery Store Stocks.)

Large Cap - General Electric (NYSE:GE)
Of its top 50 stock holdings, General Electric is the Alaska Permanent fund's biggest loser. Once the largest investment of the bunch, it's now 11th in the fund. GE's stock's been eroding in recent years as GE Capital faced a capital crisis. Some analysts believe the worst is behind it and that the financing arm will contribute half the earnings growth in 2011. I have no opinion either way. I'm only looking at this from a historical perspective. GE's stock peaked at $60 and change back in September 2000. It's been on a downhill slide ever since. At some point, it has to turn around, doesn't it?

Bottom Line
With the exception of the Dixie Group, I failed to uncover any earth-shattering investments in Alaska's fund. Let's hope that a more thorough examination of its holdings will turn up something other than fool's gold.

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