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Every selloff presents opportunity. Below are 5 undervalued stocks that we think should be on investors’ radars right now. As always use the list below as a starting point for your own due diligence:

Abbott Laboratories (NYSE:ABT) - In uncertain markets, investors will be better off by buying defensive stocks that are trading at inexpensive levels and a dividend yield to counter the portfolio. One of the good sectors to look at right now is healthcare. A good large cap bet in health care would be Abbott Laboratories. At current prices, the stock is 10.84 times this year’s earnings, with a dividend yield of 3.80%. These valuations are lower than its competitors as GlaxoSmithKline Plc (NYSE:GSK) and Merck & Co. (NYSE:MRK) are trading at 20.30 times and 34.30 this year’s earnings.

The market implies zero growth for ABT in the coming years. It pays to be contrarian looking at the past record of the company. Over the last 5 years, revenues have grown 9.5% and net income growth has come in at a 6.5% rate. In terms of cash flow, the company has been steadily growing its cash flow at 14.2% a year for the past five years, which translates to a cash-flow return on capital at 16.1%. Given the current cash flow generation, it is possible that the company will have another target company to acquire. The recent acquisitions include Facet Biotech, Solvay Group’s pharmaceutical business and Piramal Healthcare Limited’s health solution business. The result of these acquisitions doubled free cash flow in three years.

Banco Santander (Brasil) SA (NYSE:BSBR) – For investors looking for banks outside the country, BSBR is a good bet for Brazil’s credit expansion. The stock is trading at inexpensive valuation of 9.18 times 2011 earnings and dividend yield of 4%. The stock has lost 21.19% in value over the past 3 months and is trading below IPO price. This is due to higher interest rates in Brazil, which could squeeze the net interest margins for Brazilian banks. However, the stock may look attractive to a long-term investor who’s willing to wait for the next rate hike cycle.

Over the past years, the bank has experienced exponential growth in assets. While they have increased their assets, the bank is still conservative in their lending practices. The reason is that the government owns a majority stake in the bank. The bank is at the forefront of the economic tailwinds that Brasil is experiencing, including growing per capita income, infrastructure projects and highly liquid banking system.

With over 2,000 branches in the country, BSBR will definitely capture the growth in both retail and institutional lending growth. The bank is strategic to Grupo Santander, as it is the most profitable unit of the group. It can also leverage the financial backing of the group to further enhance its growth initiatives.

ArcelorMittal (NYSE:MT) – Bets of a slower economic recovery leading to lower steel prices have caused investors to dump shares of ArcelorMittal. The shares of the world’s largest steel company lost 32.45% for the year. The shares are now trading at 8.99 times this year’s earnings and dividend yield of 2.50%. Sales amounted to $47.31 billion, +25.88% year on year, while net profit reached $2.6 billion, +11%. While sales were robust due to strong steel and ore shipments, higher costs from prices of iron ore have limited earnings growth. It must also be noted that most steel sales for the company are linked to long-term contracts.

The outlook and guidance appears to be positive. Management expects that steel shipments will be higher than the first half due to demand recovery. It is also positive about the growth strategy it is pursuing, which includes Liberia iron ore production, expansion of its Canadian iron ore plant and Vega Do Sul expansion plans in Brazil. Meanwhile, the price of iron ore is expected to soften as some of the traders are expecting a correction in the coming months. This will definitely help margins of MT going forward and eventually better net profit for the company.

Nokia Corporation (NYSE:NOK) – The share price of Nokia has lost more than 51.07% for the year on questions about its operating capability and its ability to compete with Apple, Inc. (NASDAQ:AAPL) and Google (NASDAQ:GOOG) Android phones. The recent second quarter reports from all three have attested to this. The company has reported earnings per share of EUR 0.06, a decline of 45% year on year on sales of EUR 9.275 billion, or -7%. This is attributed to the increasing market share of both AAPL’s iPhone and Android mobile devices.

Long-time believers in Nokia will find comfort in CEO Stephen Elop’s plan to partner with Microsoft Corp. (NASDAQ:MSFT) to launch its smart phone in Windows platform. The CEO believes that over the long term it could compete with other smart phones in the market. The problem with this is that the market is not buying this strategy. Analysts expect that earnings will decline by 61.70% this year, translating to a 2011 price earnings ratio of 16.90 times.

Investors looking for short-term trading gains will be disappointed with Nokia shares. Contrarian long-term investors will find a good entry point as Nokia shares are trading near its 52-week low. As soon as the company can prove that the strategy will work and be translated to higher revenue growth, long-term investors will definitely be rewarded.

Nippon Telegraph & Telephone Company (NYSE:NTT) – Stocks that are trading below book value either are on the brink of bankruptcy or unprofitable. This is not the case of the Japanese-based telecommunications company, Nippon Telegraph & Telephone Company. The current Japan scenario has created opportunities for investors looking for bargains abroad. The stock is currently trading at 0.30 times book value and trailing price earnings ratio of 4.72 times. This is significantly lower than its US counter-part AT&T's (NYSE:T) trailing price earnings ratio of 8.29 times and 1.51 times book value.

This opportunity appears rare. The company has a trailing EBITDA of $40.94 billion, which translates to margins of 31.25%. Return on equity is also modest at 7.02%. Buying shares of NTT is equivalent to buying the net assets of the company alone at a deep discount. The market is discounting the company’s cash flow generating ability given the current situation of Japan.

What the market may be missing is that NTT is a profitable company in a steady industry. In fact, the company has cash of $19.49 billion and lower debt to equity ratio at 45.31%. Catalysts will include faster than expected Japanese construction, expansions through acquisitions and better revenue growth.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Buy Low, Sell High: 5 Stocks to Buy Now While Very Cheap