"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." 
-- Warren Buffett

Can't argue with that, can you? I don't need to remind you of how much fear is in the market these days. It's a real gut check, but that fear is creating incredible opportunities for investors patient and diligent enough to search for the babies thrown out with the bathwater.

Using our Motley Fool CAPS ranking system's screening tool, I scanned for bargain companies with the following characteristics:

  • Five-star ratings -- the highest our CAPS community offers.
  • Trailing dividend yields of at least 3%.
  • Price-to-book ratios no greater than 1
  • Dreadful performance over the past 26 weeks. Yes, most stocks meet this condition, but I'm looking for the big crashers. The complete capitulators. The mothers and fathers of all bargains.

Among others, I dug up these five, which have been shredded to such paltry levels that it's hard to keep ignoring 'em:


Price Change


Price/Book Ratio

2009 Earnings Estimates

Allegheny Technologies










Duke Energy





Marathon Oil





Valero Energy





Data from Motley Fool CAPS, Yahoo! Finance, and Capital IQ as of March 5, 2009.

None of these are necessarily recommendations -- just good starting points for you to dig a little deeper. You can rerun an update of this screen yourself, if you like.

I'm holding out hope for Big Oil
Hearts were crushed when Warren Buffett recently issued a mea culpa for the dismal performance of ConocoPhillips. Investors were expecting Buffett's seal of approval to be a catalyst. Yet, as Buffett wrote to Berkshire Hathaway (NYSE: BRK-B) shareholders:

I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.

Fair enough. The man can't walk on water, you know. No one, not even Buffett, could have predicted exactly how the carnage of the past six months would unfold.

Still, I think if you analyze the comment, it's actually fairly bullish. ConocoPhillips is a great company in a promising industry, Buffett just waaaay overpaid. The company wasn't the error; the price was. Moreover, the precipitous plunge in oil prices, as he mentions, isn't sustainable.

In other words, you're looking at a Buffett-quality company at prices roughly half of what he paid last year. Rare is the time when average Joes can one-up the world's greatest investor.

Besides, once the inevitable resurgence of oil takes place, ConocoPhillips is in fact a pretty attractive company. Here's how CAPS member stoctoni laid it out late last year:

Most attractive major integrated petro company. Exposure to North American nat gas (14%) and international (9%) to go along with oil production (57%) and downstream (20%). Assuming $75 barrel for oil and $10 per million btu, net present value for [ConocoPhillips] is about $109 a share. Nice dividend yield as well.

I'll be the first to admit that blindly following Buffett isn't a sensible approach, but the long-term prospects of oil giants like ConocoPhillips and ExxonMobil (NYSE: XOM) are still very much intact, especially if catalysts like demand from China really start to gain traction.

Your turn to chime in
What do you think about ConocoPhillips? More than 130,000 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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