Approaching investment decisions by focusing on individual securities and picking those that are undervalued is a bottom-up approach. A bottom-up stock picker would start by analysing potentially interesting companies (preferably as many as possible) to find those that are undervalued.
Using such an approach implies that an investor is attempting to outperform the market by picking shares (or other securities) that are undervalued, whether in absolute terms or relative to their sector.
A bottom up approach does not mean neglecting diversification, but it does require discipline to ensure that a bottom up portfolio is well diversified.
The opposite of a bottom-up strategy is a top down strategy.