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I believe a lot of overlooked stocks are ones that are priced under $10. The fact that they are so low keeps investors wary of these positions, but there are a lot of “diamonds in the rough.”

The recent scare of another recession has pushed certain stocks down to new lows. Since the recession of 2009 the markets have made a 70% turnaround, on average, and I do not see why in the next few years these four stocks won't do the same.

The recent “cyclical” bad news has pushed these stocks to new lows and opened the door to great opportunities. The combination of bad market sentiment, strong fundamental data, and a clear vision for growth is an extremely profitable scenario. Below are 4 bargain stocks that will rebound:

Majesco Entertainment Company (NASDAQ:COOL) is a provider of video game products primarily for the family oriented, mass-market consumer. The Company sells its products primarily to large retail chains, specialty retail stores, video game rental outlets and distributors. The current market price is $3.48 with a one-year analyst price target of $4.42. This represents a 27% upside potential. Majesco has been a market leader with upside over 300% for the year; however, the stock sold sharply in June dropping from its high of $4.53. The fact that there was a huge selloff just shows that investors were “cashing in” on huge gains, but the upside trend seems to be coming back. Majesco is a solid company and their day’s sales in inventory have been higher than the subsector average for each of the past five years. The company's trailing P/E and forward P/E are both currently at or near their 5-year lows, and based on trailing P/E, COOL currently trades at a 41%discount to its Toys subsector peers. I feel there is another “popping” trend occurring; COOL’s shares are currently trading 30.3% above their 50-day moving average of $2.67, and 29.1% above their 200-day moving average of $2.70. This makes COOL a great buy for a huge turnaround.

Cytori Therapeutics, Inc. (NASDAQ:CYTX) develops, manufactures, and sells medical products and devices to enable the practice of regenerative medicine. The Company's technology is the Celuion family of products, which processes patients' adipose-derived stem and regenerative cells (ADRCs) at the point of care. The current market price is $2.85 with a one-year analyst price target of $4.5. This represents a 57.89% upside potential. This stock has taken a huge fall since its high of $5.72 in July, but the stock is continuing to rebound with “higher lows.” The huge selloff after the second quarter has brought great opportunity for another rally of profits. Although earnings are negative, the company's days sales in receivables are at its five-year high. CYTX shares are currently trading 6.2% below their 50-day moving average of $3.09, and 42.2% below their 200-day moving average of $5.02. If the current upward trend continues I do not see why the analyst upside consensus of 58% cannot be reached.

PAETEC Holding Corp. (NASDAQ:PAET) is engaged in providing large, medium-sized and small business customers in metropolitan areas with a package of integrated communications services, which includes data services, including broadband Internet access services and virtual private network (VPN) services, and voice services, including local telephone services and domestic and international long distance services. The current market price is $5.43 with a one-year analyst price target of $5.77. This represents a mere 6.26% upside potential; however, I feel the potential is even higher. PAET’s third quarter earnings showed a 31% jump in revenue yoy, yet the stock experienced a selloff. One thing I feel most investors have failed to realize with this company is the strong upside trend that has developed over the past six months. The peaks on the graph continue to trend higher along with the troughs. Also, the company's current ratio has been higher than its subsector average for each of the past five years. PAET shares are currently trading 1.7% below their 50-day moving average of $5.51, and 20.2% above their 200-day moving average of $4.51.

PowerSecure International, Inc. (NYSE:POWR) is a provider of Energy and Smart Grid Solutions to electric utilities and their commercial, institutional and industrial customers, and of Energy Services to oil and natural gas producers. The Company provides its services in four business areas: Interactive distributed generation, Utility infrastructure, Energy efficiency and energy services. The current market price is $6.31 with a one-year analyst price target of $8.83. This represents a 40% upside potential. PowerSecure reported a strong third quarter results, and has soared over 20% since. This position saw resistance at $5, but with the current situation POWR can see traction all the way up to $8 before seeing any more resistance. I feel this company has been highly overlooked since 2009. In May 2009, the company established a business unit, PowerPackages, LLC and in April 2010, the company acquired a majority interest in Innovative Electronic Solutions Lighting, LLC. The company's day’s sales in inventory have been higher than its subsector average for each of the past five years, and within those five years debt-to-capital has been lower than its peers. It seems this company is ripe for the picking at the current price. They have made all of the right management decisions, and should see no problem recovering to its comfortable $14 levels.

Source: 4 Stocks Under $7 About To Soar