5 More Turnaround Stocks

We're only one day away from my favorite day of the year. That's right. Christmas Eve Eve. What happens on Christmas Eve Eve? Usually I go to a bar with some friends. But this year's even better -- my wife and I are going to see LeBron and the Cavs play Dwight Howard and the Orlando Magic in Cleveland.

Where the heck am I going with this and why do you care?

Fair question. Basically, it's a joyous season. We're all happy; we're doing fun things; and we're all in a giving mood.

It's in that vein that I present this week's 5 Turnaround Stocks. And boy is it a good week to be doing so. This week alone we've seen Circuit City (NYSE:CC) drop 16% in a day and formerly high-flying International Asset Acceptance (NASDAQ:IAAC) drop 33%.

Because remember: Fortunes are made by the investors who succeed in buying great stocks while they're down. Seriously. And they're able to do so because they're willing take a hard look at every falling knife and bet big on the stocks they're sure will turn around.

Meet the masters
The names behind this strategy include Buffett, Munger, Weitz, Olstein, and many more. It's also the strategy the Fool's own Philip Durell preaches at Motley Fool Inside Value. But you don't need to be a master investor or an Inside Value subscriber to be a value investor. All you need is patience, a willingness to be contrary, and some good ideas.

We probably can't help you with your patience or your contrarian spirit, but here are five ideas from Motley Fool CAPS, a brand-new community-intelligence database that asks investors to rate stocks. In turn, every investor is ranked, as is every stock. So as more people participate and more time passes, we hope to be able to determine the best investor and the best stock in America -- and potentially the world (though, admittedly, we'll have to roll this thing out of beta testing before we can start talking about global domination).

And now for the stocks ...
These are stocks that, despite being down more than 10% over the past year, have received a five-star rating from our pool of individual and professional investors.

So, without further ado:

It should be noted that Ron Baron holds shares of Symyx and Vanguard's Edward Owens holds shares of Barr. While that's something to like about both those stocks, it should be said (and so I'm saying it) that these are not recommendations. Instead, they're ideas that CAPS has generated, which I'm offering up in the name of further research.

After all, when you go digging for dirt cheap stocks, it's absolutely crucial to do your due diligence. If you'd like to get started doing just that, come and see what our CAPS investors are actually saying about these companies. To do so, just click here to join the free beta test of CAPS today.

Tim Hanson does not own shares of any company mentioned. The Fool's disclosure policy assures you that no stocks were harmed in the penning of this article.