Find Good Companies at Good Prices

You know those great companies you didn't invest in last year, because they were overvalued? Well, the past year's market sell-off may have brought their shares back into value territory.

And they're probably not the only values out there. Ron Muhlenkamp, manager of The Muhlenkamp Fund (MUHLX), recently told investors that he saw the best investment values in a decade. One of the screens that Muhlenkamp uses to find good companies at good prices highlights companies generating return-on-equity figures greater than 15%, and price-to-earnings ratios below that figure.

Here is a list of five companies that fit these criteria, paired with their respective CAPS rating, as judged by more than 115,000 members of the Motley Fool CAPS community. Those ratings matter -- especially for stocks receiving four or five stars, which have outperformed the market as a group since November 2006.

Company

P/E Ratio

CAPS Rating

Vale (NYSE: RIO  )

11.4

*****

Devon Energy (NYSE: DVN  )

11.4

*****

Deere (NYSE: DE  )

13.7

*****

UnitedHealth Group (NYSE: UNH  )

10.2

*****

Coventry Health Care (NYSE: CVH  )

10.0

*****

Source: Motley Fool CAPS; Capital IQ, a division of Standard & Poor's; and Yahoo! Finance, as of Aug. 20, 2008.

Come join us on CAPS, get your free sign-up, and learn more about these and countless other interesting stock ideas.

UnitedHealth Group is an Inside Value selection. UnitedHealth and Coventry Health Care are Stock Advisor recommendations. Muhlenkamp is a Champion Funds pick. Try any of our Foolish newsletter services free for 30 days.

Todd Wenning believes he'll go fishing. He does not own shares of any company mentioned. The Fool's disclosure policy is always a value.


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