All in all, there were plenty of Wall Street winners in 2010. But there were also plenty of disappointments, with a number of companies ending the year in the red. These downtrodden stocks may not have looked so hot a few months ago -- but don't be so quick to count them out.
Time after time, companies have risen from the ashes to stage dramatic rebounds. Just look at footwear maker Steve Madden: It bounced back from a securities fraud scandal to see profits increase by over 20% in each of the past nine quarters.
Or automaker General Motors, pulling a complete 180 from where it was circa 2009 bailout. Investors who bought these stocks cheap were able to reap tremendous rewards.
The profit potential in an underdog is great -- but only if it is attractively priced.
If you're interested in rebound ideas, the following list might interest you. To compile this list, we started with a group of rebounding companies. All of the stocks mentioned below lagged the S&P 500 in 2010, but they've all outperformed the benchmark index in 2011.
To refine the list, we looked at valuation ratios, and identified the rebounding stocks trading at the most attractive valuations.
Do you think these attractively priced, rebounding stocks should be on your watchlist? Do your own research, and use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Stein Mart
2. Orthofix International
3. Artio Global Investors
4. SMART Modular Technologies
5. Diamond Offshore Drilling
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen does not own shares of any companies mentioned.
General Motors is a Motley Fool Inside Value recommendation. The Fool owns shares of Diamond Offshore Drilling. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.