The strategy can mean doing catch-and-release multiple times with one stock, as has been the case with the for-profit education giant Apollo Group (APOL), which they've bought three times. It can also mean waiting many years for the opportunity to catch a coveted stock, as was recently the case with Monsanto (MON). "In some ways [Apollo's] countercyclical," Coats explains. "As people go through transition periods in their professional lives, they want to improve their opportunities." Enrollment pushed past 420,000 in the company's third quarter, a 22.5% gain from the previous year, boosting the company's revenue 26%. The stock trades at about $64, up from 58 when Coats bought it in May.

Avon Products (AVP) is another stock that Oak Value has held many times in the past 15 years, and has recently gone from being a smaller holding to a top five. "Historically, it has been valued for its distribution model, but they've also been recognized as developing a brand," co-manager Phillips says. Avon, at $32.32, is up more than 34% this year. Oak Value added shares last October at around $21.

A newcomer to the fund this year is agribusiness giant Monsanto. The company is by no means new to Oak Value. Coats & Co. have wanted to add the stock for years, but it was expensive. They were impressed with Monsanto's weed-killer Roundup, but what they really liked was the company's seed business. They previously had concluded that Monsanto's earnings were being skewed by one-time price increases for Roundup that weren't likely to be duplicated. In June, when the generic producers ramped up production and hit Roundup's profits, Coats found his "inflection point," and picked up shares around $75 -- well below the 2008 peak above $145. They now trade a little over $82. The company has a forward price-earnings ratio of around 19. "We don't have any expectation that we have picked the bottom of the stock," Coats says, but "the business has evolved as we thought."

A favorite holding is luxury goods makers Coach (COH). It may seem an odd choice in the current economic environment, which champions spending on essentials, rather than luxuries. "We believe that the odds favor a continued workout for the U.S. economy...the consequences are less-than-robust consumer spending," Coats admits. Recent data support that view. Although the recession appears to have ended at the close of the second quarter, surprisingly weak July retail sales served as a reminder that consumers won't be driving this recovery as they have in the past. In response, Coach has added pricing flexibility in the form of its new Poppy line, with lower-priced handbags in the $200 to $300 range. "Traditional luxury buyers are trading down to Coach," while usual Coach shoppers "are trading down to the factory outlet," he says. Coats also likes Coach's China prospects. The stock trades near $28.50, up 37% on the year. Coats picked it up for under $14 at the end of 2008.