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Want to hit a few home runs in the stock market?

Then get ready to hold your breath and get your hands dirty by digging through the investment dumpster for one reason:

Often the stocks that provide the best returns to investors over time, in my view, are also the same ones that are out of favor with the market participants in the current period.

That's just my opinion though, so let's look at one of Warren Buffett's recent deals to show that this strategy has merit.

During the Financial Crisis, Buffett became an unofficial lender of last resorts to major financial institutions and other Fortune 100 companies that no one else would touch even if they wore a HAZMAT suit.

So why would he be willing to lend money and invest in them?

He believed that the fundamentals of these companies were strong enough to overcome the obstacles they faced and wanted to keep them moving forward, despite heavy financial losses. In addition, he surmised that if these companies merely survived the Financial Crisis they would likely generate returns that would justify the risk being taken.

How did he make out?

Like a bandit with $11B in profits!

Now can this strategy be replicated even in today's market?

In my view the answer is yes, and that's exactly how I identified 6 interestingly cheap stocks that look poised to bounce off their 52-week lows and move substantially higher.

What makes these stocks cheap though you ask?

They all have a Price/Sales ratio valuation of 1 or lower.

This price-multiple valuation metric illustrates to investors how much they're paying for every dollar of sales that the company generates. A general rule of thumb when using this price-multiple valuation metric is that if the stock has a P/S ratio of 1 or less it's cheap. On the other hand, if the P/S ratio is 3 or higher then it's pretty expensive.

Now a P/S ratio of 1 or lower is good but meaningless without one improving fundamental X-factor in my view.

What is it?

Improving profitability margins.

The investing strategy here is to buy a company's revenue while it's cheap and then wait for certain profitability metrics, such as 1-year EPS growth, to improve.

Why you wonder?

Upward trending profitability metrics, such as EPS growth, tend to drive a stock price higher over time.

Still, I like to minimize my risk further with this strategy by avoiding the buy and then wait to see "if" the company's profitability improves in the future.

How can one minimize the risk further?

I do this by seeking out stocks that are not only trading near their 52-week lows, have a cheap P/S valuation, but have also increased their 1-year EPS growth by at least 10%. This helps illustrate that the company is clearly improving from a profitability standpoint over several consecutive quarters in the current market environment.

In my view, any company that is trading near it's 52-week lows with a cheap P/S valuation, is coupled with improving profitability trends, and is now experiencing some bullish momentum deserves further independent due diligence.

The 6 stocks listed below are ranked from lowest to highest by market capitalization:

1. VimpelCom Ltd. (VIP)

VimpelCom is telecommunications service operator that provides voice and data services through a range of various technology platforms. The stock has a current market cap. of $22.30B, trades with a P/S ratio of .97.

In addition, over the last year the company has grown its EPS by 269.40% and currently holds a Quick Ratio of 1.0 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 16.65% over the last month.

Additional Notes:

During October 2013 Barclays Capital (OTC:BCBAY) reiterated its rating of Underperform rating for the stock but increased its price target from $10.50 to $11.50.

2. Tesoro Corporation (TSO)

Tesoro Corporation refines and sells petroleum products in the US. The stock has a current market cap. of $6.65B, trades with a P/S ratio of .2.

In addition, over the last year the company has grown its EPS by 37.80% and currently holds a Quick Ratio of 1 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 10.22% over the last month.

Additional Notes:

During October 2013 Imperial Capital (NYSE:ICG) reiterated its rating of Outperform for the stock but decreased its price target from $65 to $59. As well, Oppenheimer (NYSE:OPY) downgraded its stock rating from Outperform to Perform during October 2013.

3. Tenet Healthcare Corp. (NYSE:THC)

Tenet Healthcare Corporation owns and operates acute care hospitals, ambulatory surgery centers, and other related health care facilities across the US. The stock has a current market cap. of $4.86B, trades with a P/S ratio of .52.

In addition, over the last year the company has grown its EPS by 52.70% and currently holds a Quick Ratio of 1.50 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 12.25% over the last month.

Additional Notes:

During October 2013 Deutsche Bank (NYSE:DB) reiterated its BUY rating on the stock and increased the price target from $55 to $65.

4. US Airways Group, Inc. (LCC)

US Airways Group provides air transportation for passengers and cargo around the world. The stock has a current market cap. of $3.68B, trades with a P/S ratio of .26.

In addition, over the last year the company has grown its EPS by 650.50% and currently holds a Quick Ratio of 1.20 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 12.33% over the last month.

Additional Notes:

During October 2013 Imperial Capital re-initiated coverage of this stock and rated it Outperform with a price target of $24. On the other hand CRT Capital, downgraded its rating of the stock from a Buy to Fair Value.

5. Western Refining Inc. (WNR)

Western Refining, Inc. operates as an independent crude oil refiner and marketer of refined products. The stock has a current market cap. of $2.86B, trades with a P/S ratio of .31.

In addition, over the last year the company has grown its EPS by 176.90% and currently holds a Quick Ratio of 1.0 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 19.51% over the last month.

Additional Notes:

During October 2013 Imperial Capital reiterated its rating of In-line for the stock with a price target decrease from $31 to $28.

6. SunCoke Energy Inc. (SXC)

SunCoke Energy, Inc. mines and produces coke in the Americas. The stock has a current market cap. of $1.31B, trades with a P/S ratio of .71.

In addition, over the last year the company has grown its EPS by 60.90% and currently holds a Quick Ratio of 1.80 on its Balance Sheet.

Finally, the stock has recently been experiencing bullish momentum and rallied by 13.50% over the last month.

I hope this short list of stocks helps investors as they do their own due diligence on stocks that could help them achieve Buffett-like returns moving forward.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This information is not to be considered direct and or indirect investment advice to any individual or organization. Everyone should always do their own independent due diligence before making an investment decisio

Source: 6 Growth-Oriented Stocks With Bullish Momentum That Could Offer Buffett-Like Returns