Of all the insight I've heard over these crazy months, the most telling came from an investor who appeared on CNBC last fall and, being entirely serious, advised, "There're only two positions to be in right now: cash, and fetal."

I get it. Even with the recent rally, it's ugly out there. Many companies that overleveraged their balance sheets are permanently impaired and will likely never fully rebound. Citigroup (NYSE:C) and AIG (NYSE:AIG) come to mind. We had an unprecedented boom; now we're slowly trying to crawl out of an unprecedented bust. That's how markets work.

Even so, history tells us time and time again that market panics and forced sell-offs indiscriminately throw the good out with the bad. The "sell-now-ask-questions-later" mood of global investors is providing bargain-hunting investors with the sort of opportunities we haven't seen in decades.    Use that to your advantage.

Using the wisdom of our 135,000-member-strong CAPS community, I've hunted down a few dirt cheap, high-quality companies. Have a look:


Recent Share Price

Forward P/E Ratio


Expected Growth Rate

TTM Return on Equity

Forward Dividend Yield

CAPS Rating
(out of 5)

Kimberly-Clark (NYSE:KMB)







Raytheon (NYSE:RTN)














Data from Yahoo! Finance and Motley Fool CAPS, as of Aug. 23.
P/E = price-to-earnings ratio. TTM = trailing 12 months.

Let's break down the bullish argument for each one.

A closer look at Kimberly-Clark
The worst thing most investors say about Kimberly-Clark is that it's boring. The best is that it's a stable, high-dividend, conservative investment. Acknowledging that the former is simply a negative way to look at the latter, admit it: It's hard not to like this consumer-goods company.

Since its brand name isn't widely recognized, it's worth discussing what Kimberly-Clark actually does. It manufactures and sells personal hygiene products, including everything from Kleenex tissues to surgical gowns. Broken out by segment, here's where revenue came from in 2008:


2008 Sales

Personal Care

$8.3 billion

Consumer Tissue

$6.7 billion


$3.2 billion

Health Care

$1.2 billion

This industry is somewhat susceptible (although not nearly as much) to the ills plaguing other consumer companies, such as Procter & Gamble (NYSE:PG) -- a shift away from name-brand to generic products. Health care and personal care are nondiscretionary, and segments where consumers typically demand high quality. That puts Kimberly-Clark in the segment some investors dare to call "recession-proof." As CAPS member ricardorubiosr wrote last year:

During a recession or inflationary period the products from Kimberly-Clark always will be needed, in spite of higher prices. Also, KC is a global company with almost half of it sales and profits coming from the Developed and Emerging markets of Latin America, Eastern Eurpe, Asia and Oceania which are growing at a double digit rate, not only in dollars but in volume, and market shares in most of the countries are No. 1 or No. 2 against other global and local competitors.

A closer look at Raytheon
Last week, we looked at Lockheed Martin (NYSE:LMT) as a solid company firmly attached to the government's checkbook, trading at what looks to be a compelling valuation. Why stop at one defense company? This is the era of big government, right!?

Raytheon is another good example of a company whose main customer goes by the name Uncle Sam. In 2008, no less than 87% of sales came from the U.S. government. As CAPS member jm7700229 writes, there's comfort in that figure:

While the current Administration may be less warlike than the last, it is more so than the one before that -- and Raytheon prospered through it all. What they make is what the Generals want (Admirals, too). The potential remotely piloted vehicles (primarily aircraft at the point) is enormous. The commander of a huge air wing locally recently said that he may be put out of business by them. And the rest of [Raytheon's] arsenal only becomes more valuable as the Defense Department seeks to increase bang for the buck.

Rep. Barney Frank sarcastically called this "weaponized Keynesianism," which is both clever and accurate: Governments like spending money, and they like protecting their people.

A closer look at Volcom
I'll keep this Volcom overview brief. The apparel maker trades for about $13 a share, has no debt, and about $4 per share in cash. Back out the cash, and shares trade for about 12 times forward earnings. That ain't bad. And it has the potential to look quite appealing if and when consumers crawl out of their panic-riddled spending freezes. Companies like Volcom could see a nice bounce in sales from nothing more than an outburst of pent-up demand.

Your turn to chime in
Have your own take on any of these companies? More than 135,000 investors use CAPS to share ideas and swap opinions. Click here to check it out and speak your mind. It's 100% free to participate.

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Fool contributor Morgan Housel owns shares of Procter & Gamble. Kimberly-Clark and Procter & Gamble are Motley Fool Income Investor recommendations. Volcom is a Motley Fool Hidden Gems pick. The Fool owns shares of Volcom and Procter & Gamble, and has a disclosure policy.