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Value Pack This fund thinks portfolio diversity is overrated.

By Dian Vujovich

Opinions expressed by Entrepreneur contributors are their own.

Don Yacktman has been a fan of value investing for years-and hisYacktman Focus fund (YAFFX) shows it. Through December 13, thefund--with only 25 stocks in its portfolio--was up more than 14percent, while other mid-cap value funds were underwater by about16 percent, according to Lipper Analytical Services.

"We buy profitable businesses that have returns on sales,low prices, and management teams that do a good job at capitalallocation," says Yacktman, who's managed the fund sinceits inception in 1997.

What you won't find in this portfolio are highly cyclicalbusinesses, like auto or airline stocks. "We also don'tinvest in capital goods kinds of companies so that keeps us out ofa lot of technology businesses that are shooting stars or Romancandles," he adds.

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