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

I get it. 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 financials like Citigroup (NYSE:C) 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. Amid the frenzy over financial markets and the "sell-now-ask-questions-later" mood of global investors, opportunities are being created for bargain-hunting investors like we haven't seen in decades.

Using the wisdom of our 135,000-member-strong CAPS community, I've hunted down a few dirt cheap, high-quality companies. Have a look:

Company

Recent Share Price

Forward PE Ratio

5-Year

Expected Growth Rate

TTM Return on Equity

Dividend Yield

CAPS Rating  
(out of 5)

General Mills (NYSE:GIS)

$54.53

13.1

6.8%

19.7%

3.2%

****

Waste Management (NYSE:WMI)

$28.11

13.0

11.0%

17.4%

4.2%

*****

Walgreen (NYSE:WAG)

$30.99

13.5

12.3%

16.0%

1.4%

****

Data from Yahoo! Finance and Motley Fool CAPS, as of June 10. TTM = trailing 12 month.

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

Breakfast of champions
On a recent trip to the grocery store, something struck me: You'd have to pry Cheerios out of my cold, dead hands, and (on the same topic) I'm happy to pay just about whatever the price is. That's the beauty of products that capture a share of consumers' minds -- brand-name awareness in an industry you refuse to live without is a powerful, powerful thing.

That's why I recommend taking a look at General Mills. The maker of everything from Cheerios to Yoplait yogurt is an incredibly high-quality company that is home to top brand names in a non-discretionary market: food. Now, much like Procter & Gamble (NYSE:PG), General Mills will have to battle frugal consumers shifting to cheaper, store-brand products. This is no doubt a real threat that could at least stall growth in the years ahead.

Thankfully, shares trade at a level that reflects this reality. At around 13 times forward earnings, you're hardly paying any premium price to own premium brands. That's a rarity and a treat. And it's the kind of thing you'll find only in recessions. When the market prices top-notch companies for mediocrity, good things happen to patient investors.  

Trash is king
Waste Management has gained tremendous success exploiting industries that few desire to touch: trash, portable potties, and recycling. By scaling up in an area with little, if any, competition, this company has been able to achieve strong, stable profitability that should continue indefinitely. As CAPS member Grimsooth writes:

No amount of recycling will completely eliminate trash for 80% of Americans, because we'd rather not be inconvenienced by the effort that it would require. Trash disposal (along with pluming) are crucial technologies to all civilizations and will be here until molecular disassemblers run on cold fusion.

Stand down, creative destruction.  

Magnet for baby boomers + massive expansion + quality management = success
That's about how I'd sum-up Walgreen. Along with rival CVS Caremark (NYSE:CVS) -- and Wal-Mart Stores (NYSE:WMT), for that matter -- the business of providing a convenient and trustworthy location for baby boomers to purchase medication is bound to be a lucrative one. As CAPS All-Star marc64 recently wrote:

Basically, this is a bet the "drugstore" sector is set to do well as family spending focuses on the essentials: heart meds, get-well card, and chips while you're at it...

Traveling through Florida, I see the future: a drugstore on every other corner. Aging Americans (more and more of 'em every day!) have every reason to come through a drug store, picking up their life-enhancing medicines, and remembering they need _______, too.

Couple that demographic trend with a stock trading at 13.5 times forward earnings, and you've got yourself a relatively cheap, high-quality stock.

Your turn to chime in
Have your own take on any of these companies? More than 135,000 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. Waste Management and Wal-Mart are Motley Fool Inside Value picks. Procter & Gamble and Waste Management are Income Investor recommendations. The Fool owns shares of Procter & Gamble, and has a disclosure policy.