7 Highly Rated Stocks on Sale

I am always looking for a good deal, whether that means buying an extra box of Golden Grahams when they're on sale or pouncing on undervalued stocks. The idea that anybody would sell a stock for less than it's worth may seem silly, but legendary value investor Ben Graham (no relation to the cereal) tells us, by way of allegory, how we can look out for these situations.

In The Intelligent Investor, Graham introduces readers to a wacky chap named Mr. Market. Mr. Market's game is to pay you house calls on a daily basis to offer to sell you interests in businesses he owns or to buy from you interests in businesses you own. Sometimes Mr. Market will show up at your door very excited and offer you premium prices for your holdings, while at other times he'll be inconsolably depressed about the future and will offer to sell you what he has for as low as pennies on the dollar.

To find stocks that Mr. Market is depressed about, I've turned once again to The Motley Fool's CAPS investor community. Each of the companies below had been

given a five-star rating (the highest) by our community of investors just 30 days ago:

Data from Motley Fool CAPS as of Jan. 5.

As the table shows, these stocks are all still very well-regarded by the CAPS community despite their underperformance over the past month. While these are not formal recommendations, they could be a great place to kick off further research. I'll even get you started with some thoughts on Motley Fool Stock Advisor pick Mobile Mini.

Why so blue?
Third-quarter earnings season may be a distant memory to many investors, but I have to believe that it's Mobile Mini's third-quarter earnings report that's been providing the drag on its stock.

The quarter wasn't especially bad, at least compared with what was expected. Wall Street analysts predicted that the company would earn non-GAAP earnings per share of $0.19, a bar that Mini bested with its $0.21 per share.

However, that $0.21 per share still represented a 48% decline from the bottom-line number it posted in September 2008. Revenue, meanwhile, took a 31% year-over-year hit.

It's quite possible that the numbers made investors reconsider the stock's prospects. While its 2010 price-to-earnings multiple of just under 15 isn't especially pricey, the company is heavily exposed to industries like residential construction, which have been laggards in the recovery.

At the same time, thanks to the acquisition of Mobile Storage Group in 2008, the company has significantly increased the debt on its books, leaving it most recently with $840 million in debt against $533 million in shareholder equity. Also thanks to the Mobile Storage Group acquisition, most of the company's equity value is backed by intangible goodwill. Mix this with the above factors and the result may be uninspired investors.

What the bulls say
More than 500 CAPS members have put their thumbs up on Mobile Mini, giving the stock a perfect five-star rating and suggesting that the pessimism may be off base.

To be sure, the leverage that Mini carries means that relatively modest increases in revenue can lead to big profit gains. If economic recovery throws more business Mini's way, the company's bottom line could bounce back much faster than investors are expecting.

That better-than-expected rebound is exactly what CAPS member akenst had in mind when giving Mini's stock a thumbs-up back in October:

Good play for when the market rebounds and on-site temporary storage is needed. They've used the economic slowdown to position themselves well for the future.

But here's the important question: Do you think the recent drop has created a good buying opportunity? Or will Mobile Mini continue to struggle? Head over to CAPS and share your thoughts with the other 145,000 members. Even if you'd prefer to pass on Mobile Mini, you can check out a couple of the other stocks listed above or any of the 5,300 stocks that are rated on CAPS.

Want to be rich? My fellow Fool Morgan Housel recently highlighted 10 tips from Charlie Munger on how to do just that.