History shows that the stock market has been and can be beaten by those brave folks willing to buck the momentum herd and focus on fundamentals. The roster of those who are capable of delivering and sustaining market-beating investing results includes legends like Warren Buffett, Benjamin Graham, Peter Lynch, and Bill Miller. Time and time again, the folks who can beat the index trackers like Vanguard's 500 Index (FUND:VFINX) are those who are firmly grounded in value-investing principles.

My friend and colleague Philip Durell has studied these masters, their strategies, and their successes, and now he's sharing that knowledge with you. As the lead analyst for Motley Fool Inside Value, Philip's selections have better than doubled the market's return since the newsletter's inception a little over a year ago. He has done so by profiling global stalwarts like pharmaceutical giant Pfizer (NYSE:PFE), rather than suggesting subscribers risk their money on untested firms like Chinese search company Baidu (NASDAQ:BIDU), which recently had a very highly publicized IPO.

Why value wins
The reason Philip's selections have so utterly trounced the market is simple. He, like the value greats that came before him, selects strong companies that are going through short-term tough times. For instance, he put health-care services provider Cardinal Health (NYSE:CAH) on his watch list while the company was suffering through an SEC investigation into accounting practices, the departure of high-ranking officials, and other assorted problems. Up more than 35% in just a little over a year, the primary driver for Cardinal Health's great rebound was simply the fact that the worst of the crisis had passed. Think about that for a second -- a market-beating investment, with gains based largely on the fact that the worst appeared to be behind it.

It sounds crazy, but things like that happen all the time. In fact, a similar story is currently playing out at another watch-listed company, clothing firm Tommy Hilfiger (NYSE:TOM). As the company cleans up from its own accounting scandal and readies itself to be sold, its stock has skyrocketed some 67% since February. Most of that gain is based simply on the sense that the worst of the crisis may be behind the firm

The market is an emotional roller coaster. When things are going well for a company, its stock can get priced as though the good times will last forever. When things are going poorly, the market often overreacts on the downside, pricing an otherwise solid firm as though its days are clearly numbered. Some would say that such irrational panic may be hitting retailing giant Wal-Mart (NYSE:WMT) right now. In spite of year after year of solid earnings and revenue gains, the company trades below where it did five years ago. A combination of a fear of sustained high gas prices, intensifying competition from the likes of Costco (NASDAQ:COST), and the overall retail and distribution chaos created by natural disasters like Hurricane Katrina have spooked away many investors. Yet whatever the economic conditions, people will still need their soap, toilet paper, and toothpaste. And who is positioned better to thrive when money is tight than the leader in discount retailing?

With an objective understanding of the worth of a business, confidence that the market will eventually sort itself out, and enough patience to wait out the process, value investors have beaten the market time and time again. At Inside Value, we're confident that history will repeat itself, and value will once again prevail.

Opportunity knocks
Just after the market closes this afternoon, another issue of Inside Value will be released, and two more companies will join our list of potential market-beating, value-priced investments. Take a 30-day free trial now, and be among the first to discover what they'll be. With your trial, you'll also have access to everything we've ever published. You'll be able to take a look at our updated value chart for all Inside Value's previously chosen companies and pick through past issues to decide for yourself how much value remains in those previous selections. Click here to begin your free trial and start your journey toward replicating the market-thrashing success of history's greatest value investors.

Pfizer is an Inside Value pick; Costco is a Stock Advisor recommendation.

At the time of publication, Fool contributor and Inside Value team member ChuckSaletta had no financial position in any company mentioned in this article. The Fool has a disclosure policy.