7 Highly Rated Stocks on Sale

I am always looking for a good deal, whether that means buying an extra box of Golden Grahams 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 (no relation to the cereal) tells us, by way of allegory, how we can look out for these situations.

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

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 five-star rating (the highest) by our community of investors just 30 days ago:

Data from Motley Fool CAPS as of Oct. 20.

As the table shows, these stocks are all still very well-regarded by the CAPS community despite their underperformance over the past month. While these are not formal recommendations, they could be a great place to kick off further research. I'll even get you started with some thoughts on Motley Fool Stock Advisor favorite Cemex.

Why so blue?
A quick look at Cemex's stock chart should bring one word to mind -- "Whoa!" After absolutely cratering thanks to a heavy debt load and crashing global housing and construction markets, Cemex's stock has had quite a spike. On March 6, the company's stock changed hands at just more than $4 per share, and has since more than tripled to today's $13-plus price tag.

With that as a backdrop, I can't help but think that the recent flatlining in Cemex's share price is due to investor caution. The company has taken some steps toward cleaning up its balance sheet, but as Robert Frost might say, the management team still has miles to go before they can sleep. And as for the end markets that Cemex sells its cement products to, there have certainly been signs of life, but it'd be a stretch to say that those markets are anything resembling healthy.

With expected 2010 earnings per share just shy of $0.50, and a forward-looking price-to-earnings ratio of about 28, investors may be starting to wonder whether the stock has gotten ahead of itself.

What the bulls say
Earlier this week, my fellow Fool David Lee Smith tackled the big question facing Cemex investors: Does Cemex still have room to run? His conclusion was that the company's extensive global presence, the nascent global economic recovery, and the steps that management has taken to address the company's debt situation all come together to make Cemex a compelling stock even at today's price.

David is far from alone. More than 4,300 CAPS members have given Cemex's stock a thumbs-up and the stock currently carries a perfect five-star rating. CAPS All-Star Trimalerus got in on Cemex back in March when the getting was really good (about $5 per share) and kept it short and sweet, saying: "Construction is set to boom in the next 3 years. This is a good price for an undervalued stock that should see peak performance in the next year or so." 

But here's the important question: Do you think the recent stagnation has created a good buying opportunity? Or will the global economy and heavy debt continue to put pressure on Cemex? Head over to CAPS and share your thoughts with the 140,000 members. Even if you'd prefer to pass on Cemex, you can check out a couple of the other stocks listed above or any of the 5,300 stocks rated on CAPS.