It may have seemed like the ultimate in corporate celebrity arrogance yesterday when Martha Stewart's legal counsel thought that the Martha Stewart Living Omnimedia (NYSE:MSO) namesake figurehead could have her sentence reduced in order to devote more time to her two new shows that will debut on General Electric's (NYSE:GE) NBC in the fall. Naturally, the judge didn't cave in to the request. Stewart will continue the house arrest portion of her sentence for four more months.

It's been a wild month for Stewart since she concluded the prison part of her sentence. The investor exuberance that found the stock trading for more than $37 a share the trading day before my bearishly critical "Martha's Free, But Not Cheap" article has evaporated. The stock has been hammered, surrendering 45% of the value it fetched during last month's peak. Martha, shareholders loved you more behind bars.

But if you think I'm about to take some more swings at the company's stock or its overexposed spokeswoman, you just don't know me that well. I think that there is real potential for Stewart to reinvent -- and reinvigorate -- her celebrity persona. Having her headline a spinoff of The Apprentice series could pay off nicely for her and Omnimedia's investors. My beef all along had been the stock's levitation despite the fact that the company had failed to produce an annual profit since 2002.

While some folks may have been simmering over the weekend to learn that Stewart had been paid $1.2 million by her company last year despite the company's horrific financial performance and her absenteeism during the year's final quarter when she started serving her sentence, I can respect her value to the company that bears her name.

The untimely trading actions that landed her in the slammer may have dealt her company a major blow from a public relations standpoint, but her lapse of judgment in managing her own affairs never carried over to the workplace. Her devotion was never diluted. The television shows devoted to home makeovers and crafty creations that have emerged since Stewart started hers vindicates her company's mission. With all of the attention that she has been attracting, her two new shows may be the perfect catalysts to catapult her company back to profitability.

That's why, for me, it was never a matter of not buying into Omnimedia as much as making sure one wasn't overpaying. The investors who got in over the summer when the stock bottomed out at $8.25 -- or those who got in even earlier when Motley Fool Stock Advisor recommended the shares even lower into the single digits three years ago -- had the right idea. Buying Omnimedia when it's out of favor has paid off in the past. Buying Omnimedia when it's soaring? That hasn't worked out so well.

Omnimedia's stock closed at $20.36 yesterday. While that isn't cheap by historical standards -- it prices the company at 48 times earnings when profits peaked in 2001 -- if you think that the company will bounce back even stronger than before, it's certainly a reasonable nibbling point.

Some more related Stewartology:

  • Revisit the reasons why Martha's stock was not cheap at $37.
  • Seth Jayson was also skeptical at the time.
  • Are you the next Martha? Chat it up in our Crafty Fools discussion board.

Longtime Fool contributor Rick Munarriz will give Stewart the benefit of the doubt and catch her shows later this year -- at least once. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.