7 Highly Rated Stocks on Sale

I am always looking for a good deal, whether that means buying an extra box of Cocoa Puffs when they're on sale or pouncing on undervalued stocks. The idea that anybody would sell a stock for less than its worth may seem silly, but legendary value investor Ben Graham tells us, by way of allegory, how we can look out for these situations.

In The Intelligent Investor, Graham introduces readers to a wacky guy 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 totally depressed about the future and will offer to sell you what he has for as low as pennies on the dollar.

So to find some of the 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 four- or five-star rating (the highest) by our community of investors just 30 days ago:

As the table shows, these stocks are all still well regarded by the CAPS community despite their underperformance over the past month. While I do not recommend them, I suggest they could bear  some further research. I'll get you started with some thoughts on Synaptics.

Harnessing touch
Although the keyboard and mouse still reign supreme when it comes to using a PC, the use of touch devices continues to spread, particularly as users migrate from desktops to notebooks. Synaptics is a major player in designing these input options, and the company sees its customer base growing as notebooks eat up market share. In its most recent 10-K filing, Synaptics claimed that sales of notebooks are expected to increase 15% a year from 2007 to 2011, versus growth of just 3% for desktop PCs.

But notebooks are only part of the reason investors are excited about Synaptics. The company also makes input devices for GPSes, cell phones, remote controls, and MP3 players. Investors especially are watching Apple's hugely popular iPhone and the possibility that its touch interface is Synaptics' technology.

Getting Apple or Synaptics to give us an answer on that, though, is like trying to figure out who Deep Throat is ... wait, bad example. Anyway, the companies' reticence hasn't stopped plenty of techies from speculating, and the evidence sure makes it look like Synaptics is behind the iPhone's cool touch screen. Even if it's not, the phone has shown how Synaptics' technology could be used in Apple's competitors' phones.

CAPS player mc1383 is all over Synaptics' opportunity. He gave Synaptics' stock the thumbs-up over the summer: "This company is right in the middle of the transition to touch screen cell phones, with Apple igniting the flame."

So has the recent drop created a good buying opportunity? Or is there more downside ahead for the stock? Let the community know what you think -- head over to CAPS and share your thoughts with the other 78,000-plus players. Even if you'd prefer to pass on Synaptics, you can check out a couple of the other stocks listed above, or any of the 5,000 stocks that are rated on CAPS.

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