Of all the insight I've heard over these few 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. Exploding financials like AIG (NYSE:AIG) come to mind. We had an unprecedented boom; now we're in the middle of an unprecedented bust. That's how markets work.

Even so, history tells us time and time again that market panics and forced selloffs indiscriminately throw the good out with the bad. Amid the frenzy over financial markets and the "sell-now-ask-questions-later" mood of global investors, opportunities are being created for bargain-hunting investors like we haven't seen in decades.

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:

Company

Recent Share Price

Forward P/E Ratio

5-Year

Expected Growth Rate

TTM Return on Equity

Dividend Yield

CAPS Rating  
(out of 5)

Reynolds American (NYSE:RAI)

$37.04

8.21

5%

12.24%

9.0%

***

Southern Copper (NYSE:PCU)

$19.82

17.75

14.1%

25.24%

0.80%

*****

Colgate-Palmolive (NYSE:CL)

$70.36

14.98

9.75%

98.80%

2.50%

*****

Data from Yahoo! Finance and Motley Fool CAPS, as of June 23. 

All three are well-established, large-cap stocks. Let's break down the bullish argument for each one.

Terrible for your health, great for your portfolio
Often overshadowed by larger rivals Altria (NYSE:MO) and Philip Morris International (NYSE:PM), Reynolds American is a pretty compelling opportunity to jump in the cash-cow tobacco industry and capture a ridiculous dividend yield. CAPS member pigwings6 actually thinks Reynolds is superior to its larger competitors, writing:

This is in my opinion the most diversified tobacco company there is. They have their name brand cigarettes (camel) they have their high-end expensive line (American spirits) they have their cheapo off-brand (pall mall) and they have both cheap and expensive versions of chewing tobacco. Now they're experimenting with nicotine breath mints! Reynolds is on the forefront of innovation and diversification as far as tobacco goes, while Phillip morris may have the global brand name, Reynolds has the higher growth possibilities.

Now, the tobacco industry has been bludgeoned by new regulations that will force tobacco to be overseen by the FDA. No doubt about it, this isn't good for business. But … with a 9% dividend yield, how much of that fear do you think is already priced into shares? If you're like me and you come up with an answer of "about all of it," I think you're on the right track.

Patiently awaiting the commodities rebound
Copper prices belly-flopped in late 2008. The results were horrific: Most copper stocks quickly fell 50% or more. But as with every other cyclical bust, prices both overshoot on the way down and invariably rebound. That's how markets work.

And that's the brief thesis behind Southern Copper. After being shredded last year, investors now hope a commodities rebound fueled by dollar-based inflation and growing demand from India and China will push this company back to its former glory days. As CAPS member ametts1 writes:  

Copper is trading at multi-year lows, which can't last forever due to the increasing needs for this metal to build infrastructure. China and India certainly aren't getting any smaller. I expect copper to rise in price as the housing crisis wanes, and investors start to reinvest in oversold commodities.

[Southern Copper] seems to have the lowest extraction costs of the "pure-play" copper mining companies (at least the ones that are publicly-traded -- Codelco, one of the largest copper mining companies, is owned by the government of Chile).

Have a little faith
No one wants to buy consumer stocks right now, and for good reason: This is a recession that will redefine most people's definition of necessity, and instill a long-term sense of frugality that will punish companies that relied on spend-happy consumers.

Yet this truism doesn't mean all consumer-based companies should be left for dead. Those that provide essential products and command brand-name appreciation -- companies like Procter & Gamble (NYSE:PG) or Colgate-Palmolive -- can thrive in nearly any environment. As CAPS member NoVaAmPro writes of Colgate-Palmolive:

No matter how bad the economy gets, people are still going to brush their teeth and wash their dishes. And as the economy recovers, they'll naturally trade up for top products. I've been loading up in my real-money portfolio during this downturn, and the kind of dividend history that a company like Colgate-Palmolive offers allows any investor to sleep well at night in any economy.

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 Altria, Philip Morris International, and Procter & Gamble. Procter & Gamble is a Motley Fool Income Investor recommendation. Philip Morris International is a Motley Fool Global Gains pick. The Fool owns shares of Procter & Gamble, and has a disclosure policy.