5-Star Stocks Begging to Be Bought

"I will tell you how to become rich.
Close the doors.
Be fearful when others are greedy
Be greedy when others are fearful."
 -- Warren Buffett

Can't argue with that, can you? I don't need to remind you of how much fear is in the market these days. It's a real gut check, but that fear is creating opportunities for investors patient and diligent enough to search for the babies thrown out with the bathwater.

Using our Motley Fool CAPS ranking system's screening tool, I scanned for bargain companies with the following characteristics:

• Maximum five-star ratings.
• Estimates of profitability in 2009.
• Price-to-book ratios no greater than 1.
• Dreadful performance over the past 52 weeks. Yes, almost every stock meets this condition, but I'm looking for the biggest of the big. The complete capitulators. The mothers and fathers of all bargains.

Among others, I dug up these six, which have been shredded so deeply that it's hard to keep ignoring them:

Company	52-Week  Price Change	Price/Book Ratio	Recent Price	2009 Earnings Estimates
American Oriental Bioengineering (NYSE: AOB  )	(53%)	0.93	$4.20	$0.78
Cemex (NYSE: CX  )	(76%)	0.24	$6.47	$0.61
Dawson Geophysical (Nasdaq: DWSN  )	(78%)	0.61	$15.21	$1.97
Dynamic Materials (Nasdaq: BOOM  )	(80%)	0.95	$9.49	$1.32
Focus Media (Nasdaq: FMCN  )	(83%)	0.42	$6.99	$1.47

Data from Motley Fool CAPS, Yahoo! Finance, as of March 26, 2009.

None of these are necessarily recommendations -- just good starting points for you to dig a little deeper. You can rerun an update of this screen yourself, if you like.

New hope for Cemex?
I've been hesitant about Cemex for a while now. Of course, that's hardly a contrarian view; a debt load brought on by big acquisitions has pushed this company precariously close to the brink of bankruptcy.

And that's obviously the only thing that matters right now. All the talk about being the king of cement and potential business from global stimulus packages is irrelevant unless the specter of insolvency can be put to rest. Cemex the company is beautiful; Cemex the balance sheet is an utter disaster. Not unlike the tragedies of AIG (NYSE: AIG  ) and Citigroup (NYSE: C  ) , when you take a world-class company and strap insane amounts of debt to it, bad things happen.

And while the path to fixing its debt burden has been frighteningly touch-and-go, things are actually starting to look up for Cemex. Just recently, Mexico's central bank announced plans to use a $30 billion currency swap line from the Federal Reserve to refinance private-sector debt. Whether the money will allow Cemex to seamlessly roll over its debt is still unclear, but it seems plausible, and it's a solid step in the right direction.

And make no mistake: If Cemex can somehow finagle its debt load, there's serious, serious, investment potential here. As CAPS member Northville wrote last month:

Very simply, this is a cyclical company and this is the bottom of the cycle. Management got caught with the Rinker acquisition at exactly the wrong time, which will lead to uncertainty over the next year or so until management manages to unlever (which they have a lot of good experience doing). But the company has global exposure and, I believe, the resources and experience to get through the down cycle in good shape (at approx 4-5x earnings it is trading for what it has traded for during other down cycles) and will be trading at much higher multiples or greater earnings when the global economy gets under way again. And if worse comes to worse, the Mexican government has shown in the past that it is very protective of its large prominent companies (witness that they received a covenant waiver as opposed to having debt cost more during the recent debt difficulties). From the current $5.39 per share, this is a ten bagger by the time the global economy hits another boom time.

What do you think?
No one's calling the bottom, but things are indeed starting to roll in Cemex's favor.

What do you think about its prospects? Is this an unbelievable bargain, or a disaster in the making? Make your voice heard. More than 130,000 investors use CAPS to share ideas and swap opinions. Click here to check it out. It's 100% free to participate.