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Subprime mortgage troubles, dollar decline, falling home prices, recession anticipation - whatever the reason may be, the markets are choppy. Sometimes irrational judgment by mainstream investors creates fabulous opportunities. Columbia Sportswear (NASDAQ:COLM) is one those gems under-valued at 13 times of past earnings and twice the tangible book value.

With 7.5 dollars, cash per share and virtually no debt, the price multiples are around 11 times the past year's earnings. Current year cash flow for Columbia is at $4.5, and with approximate growth at 7 to 8% for future 10 years and perpetual growth at 5%, I get the present intrinsic value at $180, assuming the opportunity cost of investing at the S&P 500 benchmark with 8% return annually.

Bottom line, Columbia has very little downside risk and great potential for upward growth. With the current ratio (current assets over current liabilities) over five, low price multiples and close to 20 percent return on equity, I do not see any trouble in near future.

Though margins may rise in future, revenue growth may slowdown a bit in US (57 % of sales) and in Big 3 European nations (Germany, France and UK). However, on the positive side, Euro appreciation might increase sales in the euro region. Year to date the sales are grown 24 percent in rest of the world. Columbia markets its products in 70 countries and there is still the untapped trillion dollar Indian economy for future expansion.

Disclosure: Author has a long position in COLM

Source: Low Hanging Fruit: Columbia Sportswear Company