3 Stocks That Just Make Sense

"I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out."
-- Warren Buffett

History seems to show that good investing doesn't necessarily mean picking out complex situations and basing your investment thesis on Nobel-level math. In fact, as the current financial crisis has shown us -- not to mention the Long Term Capital Management hedge fund and many other examples -- too much complexity can often end in calamity.

In an effort to track down some of the companies that may fall into that "fish in a barrel" category, I've turned to The Motley Fool's CAPS community. Using CAPS' stock screener, I looked for companies that have a price-to-earnings ratio below 15, a long-term debt-to-equity ratio below 50%, a return on equity above 12%, and a high rating from the CAPS community.

Source: CAPS.

These are just three of the results that the CAPS screener spit out, but you can run the same screen yourself to see the rest of the companies that made the cut. While the three companies above aren't meant to be formal recommendations, they are a good starting point for further research. And on that note, let's take a closer look at each company.

No glass jaw here
Corning may be all about glass, but it appears to have a jaw more like Iron Mike than Glass Joe. If the company's second-quarter results and the bullish commentary from its management team are to be believed, then it could be in the midst of a major turnaround.

Corning's main revenue-generator is the specialty glass panels it makes for LCD TVs and laptop screens. Not surprisingly, the company hit a big speed bump earlier in the year as economic concerns kept shoppers from picking up that big new TV with Corning's glass in it.

Results from the second quarter, however, showed the company not only working down a lot of the extra inventory it had built up, but also putting idled capacity back online to meet rejuvenated demand.

But TVs weren't the only good news. The company's sales in its telecom, environmental technologies, and specialty materials divisions were all also significantly up from the first quarter. Corning also saw a nice bump in its share of earnings from Dow Corning -- a company it owns along with Dow Chemical (NYSE:DOW) -- which produces a wide variety of silicon-based products.

All in all, the quarter looked like a comeback that Little Mac would be proud of.

Transforming China
It's the need for both new and replacement energy infrastructure around the world that brought me to industry giants like General Electric (NYSE:GE) and ABB (NYSE:ABB). But I know that sometimes you have to look smaller to find the very best returns.

That's why Motley Fool Hidden Gems favorite Jinpan International makes so darn much sense.  

While GE and ABB have a massive presence all over the world and sell a wide variety of products, Jinpan is based in China and focused primarily on serving the fast-growing demand for energy in that market. Specifically, the company sells transformers that go into factories, housing developments, airports, and the like.

During the first quarter, while most businesses around the world were struggling, Jinpan managed to post a 36% jump in revenue and a 95% leap in net income. Need I say more?

A steely giant
"World's largest steel producer." That goes a long way toward describing ArcelorMittal, which towers above competitors such as POSCO and U.S. Steel (NYSE:X). Largest producer or not, though, the company wasn't able to sidestep the waning demand and slumping prices for steel brought on by the global recession, and has seen its bottom line dip into the red in recent quarters.

Members of the CAPS community have given ArcelorMittal's stock a strong vote of confidence, though. More than 1,500 CAPS members have rated the stock an outperformer, versus a mere 41 who think it will lag the rest of the market.

One of CAPS' top-performing members, tuffsledding, saw the potential for the stock to recover and gave it a thumbs-up late last year, saying:

Steel will recover as governments put stimulus money into infrastructure construction. The current price discounts all the bad news and ignores the long-term potential.

Getting down to business
Now the CAPS community wants you. Do you think these stocks make sense? Or is the community off base in its faith in these companies? Head over to CAPS and join the 135,000 members already sharing their thoughts on thousands of stocks.

Don't stop here! Be sure to check out:

• Fool Dan Caplinger exploring whether this is a sucker's rally.
• A look at whether Social Security is a giant Ponzi scheme. (Nearly 100 Fools have chimed in with comments; see what they had to say.)
• A closer look at Ford's profit.