3 Stocks That Just Make Sense

"I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out."
-- Warren Buffett

History seems to show that good investing doesn't necessarily mean picking out complex situations, or basing your investment thesis on Nobel-level math. In fact, as the current financial crisis has shown us -- not to mention Long Term Capital Management, among many other examples -- too much complexity can often end in calamity.

In an effort to track down some of the companies that may fall into that "fish in a barrel" category, I've turned to the Motley Fool's CAPS community. Using CAPS' stock screener, I looked for companies that have a price-to-earnings ratio of less than 15, a long-term debt-to-equity ratio less than 50%, a return on equity greater than 12%, and high ratings from our CAPS community.

Source: CAPS.

These are just three of the results that the CAPS screener spit out; you can run the same screen yourself to see the rest of the companies that made the cut. While the three companies above aren't meant to be formal recommendations, they are a good starting point for further research. On that note, let's take a closer look at each company.

I'm the king of the (oil) world!
There's no misinterpreting how my fellow Fool Joe Magyer feels about Exxon, when he called it "the greatest company in the history of the world." As he points out, the success of Exxon -- along with fellow Standard Oil spinoffs Chevron, ConocoPhillips (NYSE:COP), and Marathon Oil -- was due to a confluence of factors, including an owner-operated culture, enduring demand for oil, and the perception of Exxon as a "sin stock."

Recent earnings coming from Exxon weren't as barn-busting as they have been over the past couple of years, but that enduring demand for oil hasn't gone away by any means, and I see Exxon as a great way to continue to profit from oil's dominance. And hey, even if the stock doesn't bounce right back, you still get to sit back and collect that 2.3% dividend.

Know what you buy
Old Spice, Cascade, Duracell, Pantene, Crest, Downy, Tide, Gillette, Iams. You know them and I know them. Why? Well, because I use them, and you very likely do, too. Heck, your dog might even use them. (OK, maybe not the Old Spice.)

If you're not a stock wonk like me, you may not be constantly thinking about who makes what you're buying. Still, when you hit the grocery store next time, take a look at what's in your cart. It's very likely that you'll have a few products churned out by Procter & Gamble. For decades, the company has been making the stuff that we use on a daily basis and don't think twice about buying, and it will likely continue to do so for decades to come.

Boring? Maybe a bit, but with a relatively low valuation and a 3.5% dividend yield -- which is better than you can get from a 10-year Treasury -- I like what I see.

One fine Finn
There is no doubt at all that Nokia faces some tough competition in the cell-phone market. Apple (NASDAQ:AAPL) and its iPhone are an absolute phenomenon, Research In Motion (NASDAQ:RIMM) is a monster in the smartphone world, and there are rumors that Verizon and Microsoft (NASDAQ:MSFT) might team up on a phone. And that's just to name a few.

So why do thousands of CAPS members think that Nokia will beat the market? Let's take a peak at what CAPS All-Star jsikorsk has to say about that:

For many places in the world, it no longer makes sense to install hard-lines. It is simply more cost effective to place towers. Though Nokia has lagged competition in the west (like everyone, it struggles against the iPhone, but the RAZR never did eat NOK's lunch as predicted), in developing countries, NOK is the No. 1 handset manufacturer. These are the regions with the most growth potential. These are the regions without 80-150% cell phone saturation. Nokia designs and builds the most cost effective models and has been a niche leader in this market for years.

But now, we can get it for some of the lowest prices it has been in years. Combine this with a strong balance sheet, skilled, seasoned management who has eschewed fads, and a decent dividend yield, and I think we have a potential long term winner.

Need I say more?

Getting down to business
Do you think these stocks make sense? Or is the CAPS community off base in its faith in these companies? Head over to CAPS and join the 130,000 members that are already sharing their thoughts on thousands of stocks.

Further CAPS Foolishness:

• 5 Stocks With a Bright Future
• Warren Buffett is a Growth Investor
• 7 Highly Rated Stocks on Sale