5 Stocks That Could Make Ordinary Folks Rich

Saving for retirement is an extremely difficult task. If you're like me, after work, family, and errands, there isn't much time left over to plan for the future. And who really has all that extra cash laying around, just waiting to be invested? I know I certainly don't.

So what's the good news?

You don't need big bucks, recommendations from Wall Street, or hundreds of hours hunched over company financials in order to start saving. All you need is a couple hundred bucks, a little extra time on the weekend, and the realization that investing in individual stocks is both easier and much more lucrative than you previously thought.

Just look around you
With the recent oil spill, looming federal deficits, and financial troubles in Europe, no one would blame you for being fearful of getting into the market. The truth, however, is that many undeserving stocks have plunged, and there's actually a plethora of opportunities out there today.

Legendary investor Peter Lynch always recommended that investors use their common knowledge and buy stocks that they already knew. In his book One Up On Wall Street, Lynch describes his wife's admiration for L'eggs pantyhose, made at the time by Hanes. His wife liked it so much that it forced Lynch to look into the company, invest in the stock, and ultimately, he made six times his original investment.

In actuality, these sorts of opportunities are all around you. Over the last five years, a time in which the general market declined by 10%, you could have made a ton of money, simply by investing in companies that you already knew! Take a look at what would have happened had you invested $1,000 in each of the following companies:

Source: Google Finance; data from 1/7/2005 to 12/31/2009.

Almost everyone has booked a hotel reservation or plane ticket on priceline.com. And I'd be shocked if you've never bought a computer or printer that had the HP label on it. Companies like those and Apple are the obvious ones. If everyone you know has an iPod, an iPhone, an iPad -- then it's almost impossible to not notice the company.

Other times, it takes a savvy eye to recognize a good company. For instance, a few years ago, I should have noticed the convenience and ease at which my mom was ordering her multiple sclerosis medicine by mail. If I had, maybe I would have noticed it was ExpressScripts behind the scenes -- and if I'd made a simple investment of $1,000, I would have quadrupled my money.

So, let's get started!
Now that we've established it's not nearly as difficult to invest as you may have thought, let's take the first few steps. For new or beginning investors, these are the traits I like to see in a stock: a low forward price-to-earnings ratio to ensure good value; a solid dividend yield, and it's always great to find a stock that's trading cheap because of an irrelevant event or a bearish environment. Here are five stocks that I think fit the above criteria:

Source: Google Finance; data from April 15 to July 14.

Next time your kids are begging you to shell out nearly $20 per person for a movie and some popcorn, know that most likely it's an IMAX theatre they're going to. IMAX has continued to increase revenue this year, in addition to signing 89 new contracts for screens all the way from the U.S. to Russia to Japan. Despite reporting good news time and time again, the stock has been battered down to a pulp, leaving it ripe for you to buy.

How the heck could Lowe's have possibly dropped by 22%?! Sure, unemployment is high and the economic recovery is in doubt, so people are naturally spending less money. But the next time you need a ladder and some fresh paint, chances are it's Lowe's you'll be heading to.

As the leader in wireless carriers, you're probably on Verizon's network (unless you have an iPhone), and most likely you're using one of Verizon's smart phones. In fact, if you're a video gamer, you may have even played one of Activision's games like Call of Duty on a Verizon phone. Activision Blizzard is the largest video game publisher in the world and considering its vast pipeline of new games and past franchises, it's trading at a ridiculously dirt-cheap price.

You may not have heard of Exelon unless you live in southeastern Pennsylvania. That's because this utility provider provides electricity to 1.6 million in PA and over 3 million people in northern Illinois. Because of the BP debacle, it's been lumped in with other energy stocks and has lost ground. But trading at 10 times next year's earnings and paying a fat 5% dividend, this is a truly a stock to love.

The foolish bottom line
Of course there's no guarantee that any of the five stocks above can quintuple in value -- they're just examples of how easy it is to start investing. The point is that anyone can make a sound investment -- all it takes is an observant mind, some extra cash, and the motivation to get started.