America's Next Top Value Stock

Though value investors have been some of the most successful investors out there, finding good stocks at bargain prices is far from easy. Though markets aren't as efficient as some university professors may tell you, they generally do a pretty good job pricing stocks. So while there are good deals out there, you're going to have to break a bit of a mental sweat if you want to make sure that you're investing in the stock equivalent of Brad Pitt, not Kato Kaelin.

Fortunately for us, in the search for stock market values, we have the 140,000 members of The Motley Fool's CAPS community voting on which stocks are true stars and which are just posers. To gather ideas, I've dug up a handful of companies valued at less than twice their book value -- a measure often used by value investors. Below is a selection from the array of companies that fall into this category. You can run the same screen that I did on the CAPS screener.

Sources: Yahoo! Finance and CAPS as of Nov. 16.

As you can see, though these stocks all carry value-like multiples, the CAPS community obviously doesn't think they're all are worthy of your investment dollars.

No twinkle in these stars
CAPS members seem to have a pretty dim view of Sprint and its sea of red ink. More than 400 CAPS members have put their thumb down on Sprint's stock, and that's been enough to stick it with a lowly two-star rating. Despite Sprint's low valuation, the CAPS community seems to think you're better off with Verizon or Russia's Vimpelcom if telecom is your bag.

Yahoo! may be in a different industry than Sprint, but it shares the same two-star CAPS rating. There seems to be hope that new leadership will help the search straggler start moving in the right direction, but CAPS members don't seem to think the company will ever be a worthy competitor for nemesis Google (NASDAQ:GOOG).

Evergreen Solar's three-star CAPS rating beats out both Sprint and Yahoo!, but isn't good enough to make it a real contender. While quite a number of CAPS members have thrown their support toward Evergreen's stock, the company has reported losses as far as the eye can see, so it shouldn't be all that surprising that CAPS members prefer profitable solar companies like Suntech Power (NYSE:STP).

A five-star is born!
With the U.S. consumer supposedly deep in the tank, it may seem silly to even consider a fashion retailer a good investment idea right now, particularly considering the company recently disappointed the market by giving fourth-quarter guidance well below analyst expectations.

But there are signs that Volcom isn't down and out. Though the fourth quarter sounds like it will be rough, the company's third-quarter earnings blew analyst estimates out of the water. This is notable since the third quarter included back-to-school season, a key shopping time for Volcom's core customer base. And the stock's low valuation certainly gives investors comfort, even if the environment doesn't turn on a dime.

Even if investors may see things looking up for Volcom, the stock didn't have quite enough support from the CAPS community to beat this week's top value stock, UnitedHealth.

For CAPS members, the valuation of UnitedHealth's stock is a major part of the story. As All-Star KevinKPU pointed out last month, investors could very well have overreacted to the ongoing talk about health-care reform:

Oversold. As with everything our government does, they will settle on a middle ground which accomplishes nothing. UNH and its peers will rebound and continue to thrive when all bark-no bite health care bill passes congress.

Make your vote count!
I've already given UnitedHealth an outperform rating in my CAPS portfolio, but what do you think? Do you agree that UnitedHealth could be America's next top value stock? Click over to CAPS and let the rest of the community know. And while you're there, you can log your vote for the other stocks that you think should be in the running.

High valuations can burn your portfolio, but that isn't the only pitfall you face. My fellow Fool Richard Gibbons recently ran down a number of stocks that he thinks will burn investors.