The next time someone tells you that talk is cheap, ask if he's referring to Talk America (NASDAQ:TALK). The provider of bundled local and long-distance calling services certainly put up some heady numbers yesterday.

Talk America earned $2.75 a share last year and produced free cash flow of better than $2 a share. You're right to demand more information. So let's fill in some blanks. The company grew its revenues by 20.5%. It slashed its net debt by 80%. And, to be fair, if you were to factor out deferred tax benefits and apply a 39% tax rate, earnings would have come in at just $1.30 a share in 2003.

What? You have more blanks to fill? Sure. But let's say that the stock is trading for just pennies more than a Hamilton. That's $10 for those not up on their legal tender.

So why is this stock sporting a single-digit P/E and trading for just five times free cash flow? Well, phone companies have gotten a bad rap over the last few years. Shares of names you know like AT&T (NYSE:T), Verizon (NYSE:VZ), and Sprint (NYSE:FON) have put up some recent gains, but the companies are trading for a fraction of what they fetched five years ago. And let's not even get started on WorldCom's demise.

That is all the more reason to get excited about Talk America. Juggernauts with tainted brands can make for decent targets if you're nimble. Talk America is nimble. Its growth has come from teaming up with local carriers and bundling their services with its own long-distance plans. That has given the company the ability to run a full-service, bare-boned operation as it enters new markets.

Unlike clunky telecom behemoths like Lucent (NYSE:LU), Talk America has the flexibility to grow in a smarting sector. You can't beat the valuation, and that's one of the reasons why Talk America was singled out a few months back by Tom Gardner in his Motley Fool Hidden Gems.

The company is upbeat for 2004. It is looking to grow revenues by at least 18% this year with as many as 800,000 bundled accounts by year's end. The bottom line won't be as kind, with the company looking to earn between $1.18 and $1.25 a share. Yet, here we go with those single-digit multiples again. Talk is cheap. Indeed.

Are you drawn to companies with single-digit earnings and cash flow multiples? Do you like companies in turnaround situations, or asset-rich operations trading for little more than enterprise value? If so, you are a value investor. Want to learn about more dirt-cheap companies fit for dusting? All this and more -- in the Value Investing discussion board. Only on Fool.com.