The recent panic selling in the stock market brought a lot of share prices back down to earth, but also excessively took down some steady, profitable industrial companies. Finding shiny gems in the rubble can be very rewarding. Let's take a look at two opportunities that just can't wait.

The blue bird of happiness is calling you

Remember taking the school bus when you were a kid? It turns out reliable, safe school bus transportation is more important than most people imagined. 

Kindergartners who ride the bus show a higher level of ongoing academic success, according to a California study entitled "Linking Getting to School with Going to School." The study linked riding the bus with absenteeism, a key indicator of future academic success.

Building and servicing those safe, reliable school buses since 1927 is Georgia-based Blue Bird Corporation (NASDAQ:BLBD). The company has about 180,000 buses in operation today, with a global reach to over 60 countries. 

Blue Bird had been a steady performer, but since the start of the year the stock price has dropped an eye-watering 52%.School bus demand may pull back a bit due to coronavirus school closures, but a drop of this size seems overdone. Modest school population growth in the U.S. and Canada should support demand, and officials continue to reassure us that the COVID-19 crisis will come to an end and schools will reopen.

Alternative school buses lined up

Image source: Getty Images.

Alternative fuels is a fast-growing segment of the school bus market, and Blue Bird is focusing on it. Year over year, non-diesel total bookings and order backlog came to 48%, a 10-percentage-point increase. Sales in the same segment were up by roughly 21% year over year. There is a broad potential market, as Blue Bird estimates that less than 15% of current customers have purchased alternative fuel buses. http://investors.blue-bird.com/Cache/IRCache/186365cd-9158-83ca-d53b-b3958d6ad55e.PDF?O=PDF&T=&Y=&D=&FID=186365cd-9158-83ca-d53b-b3958d6ad55e&iid=4042668

For the company overall, average unit sales prices increased 4.6% last year and 6% in the first quarter of 2020.

Blue Bird is midway through a cost-saving program called Transformational Initiatives, and it is showing great results. For fiscal year 2019 the company recorded its highest profit in 10 years, and recorded higher bus unit revenue, gross margin, and cash compared to fiscal year 2018. 

Given Blue Bird's emphasis on next-generation buses, profitability, and in-progress cost-cutting program, I think the market is seriously undervaluing this well-run company. At current levels, I definitely think Blue Bird is a buy.

Would you like to give a jolt to your portfolio?

The industrial sector has been hit hard by the coronavirus crisis. Though bouncing back will take a while, now is the time to look for companies whose stock price has fallen more than warranted, and have a long track record of coming back from adversity.

Emerson Electric (NYSE:EMR), founded in 1890, definitely has a long track record. The company has not only survived but come back stronger after everything from the Great Depression, World Wars, and other tough periods. It will this time, too.

The company first made motors and fans. Now it's a source for automation technology, process management systems, and customized integrated engineering and technology solutions. Emerson has established two core business platforms -- Automation Solutions, and Commercial and Residential Solutions -- and serves customers around the world.

Since the beginning of the year, the stock price has declined more than 30%.The decline is largely the result of both the coronavirus-crisis panic-selling, and a difficult oil and gas industry environment. To put it a bit more in perspective, although Emerson does quite a bit of business in oil and gas, 80% of the company's portfolio is unrelated to the volatility there. 

In reality, Emerson's client base is quite diverse, including automotive, commercial buildings, construction, transportation, and wastewater. I think the effect of the oil price war between the Saudis and Russians on Emerson's stock is overblown. The oil price war between the Saudis and Russians wouldn't really benefit either country if it drags on very long, hopefully making that a short-term headwind for Emerson.

The company announced second-quarter 2020 financial results on April 21. Emerson reported operating cash flow of $588 million in the quarter, up $55 million or 10% over the comparative quarter last year, and $1.0 billion in the first half, up $156 million or 18%. Free cash flow came in at $477 million in the quarter, up $63 million or 15% over the comparative quarter last year, and $787 million in the first half, up $205 million or 35%. 

In full year 2020 guidance updated on April 21, Emerson acknowledged the effects of COVID-19 and problems in the oil fields, and restated guidance down to an approximate drop in revenue of 10%, and anticipated adjusted earnings-per-share (EPS) of about $3.10, down from the Feb. 4 guidance of $3.55 to $3.80. 

As mentioned earlier, the stock price has dropped 30% in the past few months. Given Emerson's wide range of clients and industries around the world, spreading regional coronavirus risk, and the company's financial steadiness, I think the stock price is cheap right now, and any long-term investor will be well rewarded.