The market offers bargain opportunities every day. You won't always know what the opportunity will be, but finding one can supercharge your portfolio.

Master investor Peter Lynch said that one advantage of running Fidelity Magellan (FMAGX) was its charter. It was a capital appreciation fund, giving Lynch the flexibility to buy in any investment situation. Big or small, constant or cyclical growth, asset plays or turnarounds -- you name it, Lynch bought it.

While we should follow his example and look for the best opportunities in any form -- growth stories, turnarounds, misunderstood stocks-- one type of investment can be particularly rewarding.

Limited-time-only sales
The best companies grow steadily year after year, right? Wrong. Great companies have plenty of miscues along the way, but the truly great companies recover.

If the initial step on the road to great returns is to invest in great companies, we must first know what it takes to be great. Read Built to Last or Good to Great by Jim Collins. Read Common Stocks, Uncommon Profits by super-investor Philip Fisher. Another master, Warren Buffett, offers his thoughts in his annual chairman's letters. Read those, too. Trust me -- you'll learn what makes a company great.

We'd all be rich if investors simply had to identify great companies. The second key, as Buffett advocates, is to buy them when they're on sale. And when do they go on sale? When there are problems.

At Inside Value, we know it's difficult to purchase companies surrounded by negativity. But the market offers the opportunity for big rewards -- if those problems are only temporary. Here are some recent examples of great companies selling at discount prices for a limited time:

Company

Low Date

Low Price

Return Off Low

Johnson & Johnson

July 2002

$41.40

48%

Nike (NYSE:NKE)

Feb. 2000

$13.20

323%

Sears Holdings (NASDAQ:SHLD)

May 2003

$12.00

356%

Data from Yahoo! Finance and Capital IQ, a division of Standard & Poor's.

35% off
Johnson & Johnson's products have probably touched all our lives at some point. Not just a Band-Aid maker, the company develops drugs and products that play a huge role in helping people get -- and stay -- well.

But July 2002 was not a good month for Johnson & Johnson. The Food and Drug Administration and the Department of Justice launched a criminal investigation into the quality of its anti-anemia drug Eprex after the drug was linked to serious illnesses in Europe and Canada.

That typically doesn't help your share price. However, if you were able to diagnose this as a great company that could recover from the trauma, you could have earned a 48% return. Recently, the press has cited elevated risks in using drug-coated stents (Boston Scientific (NYSE:BSX) is also approved to sell the product). That's caused some uncertainty -- and you have to wonder if current share prices are a bargain today.

50% off
Nike was a poster child for trouble in February 2000. Growth was slowing, the brand was searching for direction, and the world was questioning the company's labor practices in the Far East. No one wanted Nike at $13 per share.

But Nike just does it. It battled through PR problems, expanded product lines, and signed Tiger Woods, LeBron James, and a host of great young athletes to replace Michael Jordan. If you had seen Nike's underlying greatness in 2000, you'd be a richer person today.

99% off
Eddie Lampert took control of Kmart during bankruptcy proceedings, when conventional wisdom said the retailer was finished. But Lampert saw a set of stores and a distribution system still intact and picked up the whole operation for next to nothing.

Lampert then began reallocating capital by selling stores and remodeling others. And to be better prepared to take on Target (NYSE:TGT), Kohl's (NYSE:KSS), and other retailers, Lampert used Kmart's stock as leverage to buy Sears and its wealth of brand-name merchandise. While the turnaround is far from over, Lampert is working to completely resurrect Sears Holdings into a cash-generating monster, garnering impressive returns along the way.

Today's sales
Within the market, there are plenty of underappreciated, unloved, and misunderstood businesses. Add the right catalyst, and you've got opportunity.

Even with the difficulties Legg Mason (NYSE:LM) has faced over the past six months, Motley Fool Inside Value likes the franchise.

Legg Mason, despite capital support agreements it has entered into to support its money market funds, is a collection of wonderful asset managers. Sure, there have been outflows of capital, and investors are fickle, especially during difficult times like these.

So will the bad times last forever? Murray Stahl of Horizon Asset Management and Marty Whitman of Third Avenue Value don't think so. As Legg Mason's stock price has been falling, they've been buying -- in large chunks. Apparently, Inside Value lead analyst Philip Durell isn't the only one who thinks the stock offers a great opportunity.

On sale tomorrow ...
What will be tomorrow's big bargain? That's what Durell and his Inside Value team dedicate themselves to finding. If you'd like to take a look at the stocks they’re recommending today, click here to join our community free for 30 days. There is no obligation to subscribe.

This article was originally published on June 24, 2005. It has been updated.

Million Dollar Portfolio Associate Advisor David Meier does not own shares in any of the companies mentioned. The Motley Fool owns shares of Legg Mason. Johnson & Johnson is an Income Investor recommendation. Legg Mason and Sears Holdings are Inside Value picks. The Motley Fool has a disclosure policy.