Of all the insights I've heard over these few crazy months, the most telling came from an investor who appeared on CNBC last fall and advised, in all seriousness, "There are only two positions to be in right now: cash and fetal."

Even with the recent rally, it's ugly out there. Many companies that overleveraged their balance sheets are permanently impaired and will likely never fully rebound; exploding industrials such as General Motors (NYSE:GM) come to mind. We had an unprecedented boom; now we're in the middle of an unprecedented bust. That's how markets work.

Even so, history tells us time and time again that market panics and forced sell-offs indiscriminately throw the good out with the bad. The frenzy over financial markets, and the "sell-now-ask-questions-later" mood of global investors, are creating the kind of opportunities that bargain-hunting investors haven't seen in decades.

Using the wisdom of our 130,000-member-strong CAPS community, I've hunted down a few dirt cheap, high-quality companies. Have a look:

Company

Recent Share Price

Forward P/E Ratio

5-Year Expected Growth Rate

TTM Return on Equity

Dividend Yield

CAPS Rating 
(out of 5 stars)

Newell Rubbermaid
(NYSE:NWL)

$10.39

8.2

9.8%

(3.9%)

1.9%

****

Kraft
(NYSE:KFT)

$24.80

12.2

8.3%

7.9%

4.7%

****

Microsoft
(NYSE:MSFT)

$20.22

11.2

10.3%

42.5%

2.6%

***

Data from Yahoo! Finance, Capital IQ, and Motley Fool CAPS, as of May 15.

All three are well-established companies. Let's break down the bullish argument for each one.

The power of plastic bins
Newell Rubbermaid was slaughtered last year. First, manufacturing costs soared during the commodity boom; then consumer spending plunged last fall.

Was a pullback in this company's stock deserved? Yes. But was the ferocity and depth of that pullback warranted, and does it reflect the true long-term value? Probably not.

That's especially true if the precursor to an economic recovery comes from a sharp restocking of retail inventory. That'll almost certainly occur, since inventory has fallen off a cliff in recent months and will eventually succumb to pent-up demand. As CAPS All-Star auron77 wrote in March:

Newell will out perform in the long term. They have been hit badly with the retraction of the economy, mostly because their main customers, Lowe's [ (NYSE:LOW)], Home Depot [ (NYSE:HD)] & Wal-Mart [ (NYSE:WMT)] made drastic cuts to their inventory, along with the many little customers that keep business flowing. When stores starting order normal again Newell's free cash flow will increase by selling through product quicker and emptying warehouses. 

Has cash, wants to spend it
Microsoft is a similar story, albeit with products slightly more complex than rubber bins. At $20 a share, you're looking at an industry titan with more money than it knows what to do with, trading at a multiple that most wouldn't have thought possible in recent years.

Like Newell Rubbermaid, pent-up demand could provide some real fuel for this company in coming years. In Microsoft's case, that demand will be bolstered by its newest child, Windows 7. Here's how CAPS member Scoubi recently put it:

I can't see the corporate world go to another OS right now. Even if home users are likely to go to Mac or Linux, those OS aren't ready for corporate use right now. Mac hardware is too expensive so they can't replace all the PC they have. Linux is fun to use at home but too complex and not yet ready for corporate use even if it gets better every year. Maybe in 5 years we'll start to see small to medium [businesses] switch to Linux.

So with only Windows as a viable option, [businesses] will have to switch to Windows 7 within 2 to 4 years. That should increase revenue for sale and also for support and training as everything will be "new".

Lay off my Oreos
Last but not least, food giant Kraft is the epitome of a stable company selling a product you literally could not live without: food. And don't tell me you can live without DiGiorno pizzas -- I've tried it, and I wouldn't wish it upon my worst enemy.

That said, Kraft is a stable and sturdy company being priced for mediocrity. The 4.7% dividend alone is enough to make this stock worth your while. Factor in a respectable growth rate -- which it does deserve -- and you're looking a decent upside without a lot of risk. As CAPS member grammiser writes:

One word -- Safety. People have to eat and will find the means to do so. We're not out of the recession woods yet and could have some disasterous surprises yet to come in this market. It won't make me rich but it will guarantee some capital should we have another steep market drop.

Your turn to chime in
Have your own take on any of these companies? More than 130,000 investors use CAPS to share ideas and swap opinions. Click here to check it out and speak your mind. It's 100% free to participate.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Home Depot, Microsoft, and Wal-Mart Stores are Motley Fool Inside Value selections. Kraft Foods is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy.