"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
-- Warren Buffett         

Can't argue with that, can you? I don't need to remind you of how much fear is in the market these days. It's a real gut check, but that fear is creating opportunities for investors patient and diligent enough to search for the babies thrown out with the bathwater.

Using our Motley Fool CAPS ranking system's screening tool, I scanned for bargain companies with the following characteristics:

  • Five-star ratings -- the highest our CAPS community offers.
  • Estimates of profitability in 2009.
  • Terrible performance over the past 52 weeks. Yes, almost every stock meets this condition, but I'm looking for the bargain opportunities. Solid companies with great outlooks that are being valued like total losers. 

Have a look:


52-Week Return

Recent Price

FY 2009 Earnings Estimates

Baker Hughes (NYSE:BHI)




Dolby Laboratories (NYSE:DLB)




Ingersoll-Rand (NYSE:IR)




Norfolk Southern (NYSE:NSC)




Procter & Gamble (NYSE:PG)








Waste Management (NYSE:WMI)




Data from Motley Fool CAPS and Yahoo! Finance. 52-week returns from 5/16/08 through 5/14/09.

None of these are necessarily recommendations -- just good starting points for you to dig a little deeper. You can rerun an update of this screen, if you like.

Can you live without this company?
Several years ago, Warren Buffett said about building a truly durable company, "Forget about share of market; I'm talking about share of mind."

With that in mind, there's a lot to be said about CAPS member pigwings6's recent summary of Procter & Gamble:

Do me a favor. Go into your bathroom, and take a look on your counter, in your shower, and in your medicine cabinet. Now while you're doing that, count how many of those items are P&G. Enough said.

Fair enough. Procter & Gamble has its tentacles in just about every section of consumers' lives, all around the world. It's a global leader in consumer products that, come hell or high water, recession or depression, people are going to buy. Soap and toothpaste are pretty far down on people's list of things to cut back on (I hope).

Better yet, the company's cheap. At 12 times forward earnings, you're getting a company that's historically commanded a premium multiple, which it deserves beyond any reasonable doubt thanks to the durable earnings power of its brand names.

Could a prolonged consumer slowdown dent its growth opportunities? Sure, but with a 3.5% dividend, you're being paid to wait.

One man's trash ...
If you don't have the ability to capture share of mind, you might as well go into an industry where no one has the mind to want to share with you. Waste Management -- king of trash collection -- is a good example. The company has created a barrier around its business by scaling up in an industry so unglamorous that few dare to compete.

But that's just one part of this company's moat. As CAPS member dhd1491 writes:

Trash will be with us always; so [Waste Management's] revenue stream is inherently safe, forever. It can't even be threatened by cheap foreign imports (landfills are really difficult to move). The business is capital-intensive, which is a double-edged sword, of course. It provides a barrier to entry (good) but incremental growth is expensive (bad). ... Due to the severe recession we're in, landfill volumes are off in a huge way, YOY, yet [Waste Management] is still solidly profitable. It would require gross mismanagement of this business to turn it unprofitable. The upside, of course, is that when the economy improves, so will [Waste Management's] business. Meanwhile, you can bank those dividend checks with no fear of a cut.

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 owns shares of Procter & Gamble. Dolby Laboratories is a Stock Advisor pick. Waste Management is an Inside Value recommendation. Procter & Gamble and Waste Management are Income Investor selections. The Fool owns shares of Procter & Gamble, and has a disclosure policy.