Are you familiar with the dynamic duo of Fama and French? No, they didn't sing "Lazy Sunday" -- that was Parnell and Samberg. And no, they didn't star in Grumpy Old Men -- that was Lemmon and Matthau.

While the names Eugene Fama and Kenneth French may not come up in most dinner conversations, the two have done some very interesting academic research on stocks. In short, they've proposed that there's more to stock returns than volatility -- which was most academics' previous consensus. In research they conducted over various periods and across multiple geographic locations, Fama and French determined that stocks characterized as "value stocks" have consistently outperformed non-value stocks.

Today, I've rounded up five value stocks that are all trading at less than 1.5 times their book value. To focus on high-quality stocks, I've cross-referenced these against ratings in our CAPS community of more than 110,000 investors.

Company

Book Value Multiple

1-Year Change

CAPS Rating (out of 5)

First Marblehead (NYSE:FMD)

0.3

(94%)

****

SiRF Technology (NASDAQ:SIRF)

0.5

(82%)

****

Hardinge (NASDAQ:HDNG)

0.7

(56%)

*****

O2Micro International (NASDAQ:OIIM)

1.0

(61%)

*****

Melco Crown Entertainment (NASDAQ:MPEL)

1.2

(49%)

****

Data from CAPS, Capital IQ, and Yahoo! Finance as of July 18.

Five years ago, Monsanto (NYSE:MON) would have made this list with its 1.1 book value multiple. Since then, the global boom in agriculture has sent the stock soaring, and it's up more than 900% since then.

While we can't expect that all of these stocks are going to perform like Monsanto, the CAPS community thinks these are some good choices when it comes to value stocks. With that in mind, I thought I'd dig in a little further on a couple of these stories.

Hard times at Hardinge
Over the past month, Hardinge's stock is up almost 30%, but that didn't do a whole lot to make up the ground that the stock has lost over the past year. The trouble started in late 2007, when it became clear that though current sales still looked OK, new order levels for the machine tools that Hardinge sells were badly lagging.

In the most recent quarter, the tough sales environment really caught up to the company. Though sales were down only slightly, the company wasn't able to rein in expenses quickly enough, and it slipped into the dreaded world of unprofitability.

But Mr. Market's punishment may have dwarfed the crime. Though business has slowed down, Hardinge has a strong balance sheet to fall back on. To be sure, inventory has been building, but the company has a strong working capital position and no long-term debt. And that's to say nothing of the fact that many see Hardinge's products as tops in the industry.

As CAPS All-Star JFiorini put it late last year:

According to a partner of mine who spent 40 years in the manufacturing business, "You can't buy a better machine tool than a Hardinge." ... [Hardinge] is moving some of their production operations to China, which will not only lower their costs, but give them direct exposure to a growth market for their product. All the qualitative factors are there-not to mention that any growing company (with a 70 year operating history) that is trading at a discount to book value is OK in my book.

The cloudy picture at Marblehead
The potential outcome is far more muddied at student-loan packager and Motley Fool Inside Value selection First Marblehead. The company has been on the rocks since the credit contraction began, and it has been unable to drum up demand for the packaged student-loan securities that are the bread and butter of its business.

Far from debating whether the stock is simply over- or undervalued, investors and CAPS members are trying to figure out whether the company will even survive. Bears think that the credit crisis will be too much for the company, and that investment firm Goldman Sachs (NYSE:GS) won't be enough to keep it from joining Egghead.com in that great stock market in the sky.

Many of the bulls, however, are as optimistic as the bears are bearish. Mandrake66, a Marblehead fan and CAPS All-Star, gave the stock an outperform rating earlier this year, saying:

This is a perfect example of a stock being unfairly punished for the sins of others. Unfortunately the credit market problems are a real concern to [First Marblehead] ... [First Marblehead] will come back strongly after the problems in the credit market have been resolved. It's tough to call exactly when that is going to happen, and things could get a lot worse before they get better. I think ... there is huge long-term upside potential.

So what do you think? Are these stocks values, or value traps? Log on to CAPS and let the rest of the 110,000-member community know what you think.

More CAPS Foolishness:

Hardinge is a Motley Fool Hidden Gems Pay Dirt selection. Melco Crown Entertainment is a Motley Fool Global Gains pick. First Marblehead is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool’s disclosure policy wouldn't know a value trap from a hole in the wall, but then again, the disclosure policy is just an inanimate collection of words.