I have seen where the street seems to punish stocks to a point where they are below their value, the company I worked for last year had a class action suit against them and the value dropped 1200%, in 1.5 years after the judgement/settlement it gained back 1200% and sits today at $12.00 +/- 2% day to day.
Are there any thoughts of stocks today in a similar position of being punished below their value or equity. I was watching RIM for the effect of the current law suit, and again the day of the settlement I think it went up 20% in one day!!!
For me , the key to picking stocks is price to earnings ratio. Most stocks are grossly overvalued, for instance , because people are buying them at 60 to 100 times earnings. So ,to me, any stock that is selling as close to price to earning ratios as possible is "undervalued".