Somewhat of a difficult question to answer because of its subjective nature. John T gave a well thought out answer.
I do not know if I can do as well but I will give it a try. Normally, companies are undervalued for a reason. Sometimes the reason is because of the cycle they are in, sometimes because of management mistakes, sometimes because investors just are not interested.
1. I can not help but think that the railroads are undervalued. They are the most efficient means of transportion by at least a factor of 7. The only thing allowing trucks to compete with them is the mammoth government subsidy that the trucker enjoy. That may of course last a good while longer but eventually the government is going to have to throw in the towel. The rails are worth at least 4x times their current value.
2. Here is the deal. The world runs on oil. Forget the nonsense about ethanol. Takes more energy to make the stuff than you get out of it. All ethanol production will do is drive up the demand for oil. Good for the oil companies. Unlike gold, the world supply of oil is deminishing and the demand is increasing. I can not think of a better investment opportunity than a rising demand curve and a falling supply curve. The one wrinkle is that the government is likely to step in and attempt to set the price of oil by edict. That should be interesting indeed. They did that once before if you recall. Long lines at the pumps. This time there may not be any to pump.