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Long only, contrarian, special situations, value
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I am by nature a value and contrarian investor. I am constantly looking for stocks that are currently unloved and have sold off significantly past their fair value. It is not as sexy a strategy of chasing momentum stocks, but I have found it has provided more lucrative and less volatile returns over time than trying to find the next big thing. Below are two stocks that have fallen into the bargain bin category. They have high yields and technical support at current price levels and should also provide a capital appreciation kicker, once sentiment improves on their prospects. In the meantime, an investor picks up a nice dividend while they wait for the stocks to eventually break higher.

Vodafone Group (NASDAQ:VOD) provides mobile telecommunication services worldwide. It has over 400mm customers offer voice, messaging services; mobile data services; fixed broadband services; and wholesale carrier services.

4 reasons VOD is solid income pick up at $25 a share:

  1. The company has an A- rated balance sheet and yields approximately 6% based on its last twelve months of dividend payouts.
  2. The stock is selling near the bottom of its five-year valuation range based on P/E, P/S, P/CF and P/B.
  3. VOD is selling at less than 10x forward earnings and under 7 times operating cash flow.
  4. The stock has long-term technical support at these price levels (See Chart).

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Intel (NASDAQ:INTC), the world's largest chipmaker has been negatively impacted by the migration to mobile devices from the PC. However, at current levels, it appears the stock is oversold.

4 reasons INTC is in the bargain bin at just over $20 a share:

  1. The stock yields 4.4% and has raised its payouts at better than 13% annual clip over the past five years.
  2. INTC is selling at the very bottom of its five-year valuation range based on P/E, P/S, P/CF and P/B.
  3. The stock is selling at around 5x operating cash flow and still has a five-year projected PEG of under 1 (.83), unusual for a high-yielder.
  4. The stock has long-term technical support at these price levels (See Chart).

(click to enlarge)

Source: 2 High Yielders Where The Bad News Is Fully Priced In