Sometimes, to garner really great investment returns, you have to look where others aren't. Usually, this means delving into industries and companies completely unloved by the market. Today, I'm writing about a company that has taken its lumps recently, which gives me even more reason to be excited. That company is Lumber Liquidators (NYSE: LL).

If your initial reaction was to guffaw at this suggestion, I'm probably on to something here.

What Lumber Liquidators does
By focusing solely on the hardwood flooring market, this company can offer much better deals than general home-improvement giants Home Depot (NYSE: HD) and Lowe's (NYSE: LOW). Overhead costs are minuscule -- new stores require just four or five full-time employees, and they're generally located in low-rent areas. And the hardwood prices offered to consumers are significantly cheaper because of existing relationships with mills.

Despite all these pluses, there are two big reasons why Lumber Liquidators has fallen on hard times.

1. The real estate market is at an all-time low
Poor lending practices and a ridiculously overpriced housing bubble were major culprits for the global market meltdown of the past two years. As fellow Fool Morgan Housel has pointed out, we were building far too many houses than we needed leading up to the recession.

But if new-housing starts continue on the trend they've set over the past year, we'll come upon a housing shortage in the not-too-distant future. For now, hedge and mutual fund managers still have a bitter taste in their mouths from being burned by the real estate market, but my guess is they'll eventually come around. In the meantime, we can gobble up shares on the cheap.

2. An embarrassing earnings miss
When Lumber Liquidators announced its third-quarter results, jaws -- and the stock's share price -- hit the floor. While analysts had been predicting $0.32 EPS, the company posted just $0.15, representing a miss of more than 50%.

Management blamed the implementation of a new SAP system for the miss. Fool Rick Aristotle Munarriz, who recommended the company for Motley Fool Rule Breakers service, suggested that shareholders should be vigilant over the next few quarters to make sure management isn't playing them.

Though I agree with the never-ending need to be vigilant, and share in Rick's disappointment with the earnings, I sympathize even more with the company. I love buying positions in a company when the market punishes it for taking steps to improve long-term profitability at the cost of short-term losses. Essentially, while it will take employees some extra time to master the new SAP system, the supply lines will be far more efficient for it years from now.

If the company manages to make good, Lumber Liquidators could end up being a steal, trading at 17 times next year’s projected earnings, and with a whole pile of growth left in front of it.

Home Depot and Lowe's are Motley Fool Inside Value choices. Lumber Liquidators is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Lowe's and Lumber Liquidators. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Brian Stoffel first learned of Lumber Liquidators when a friend in Carroll, Iowa used the store while building his house. Brian owns shares of Lumber Liquidators. 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 Fool has a disclosure policy.