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Barron's cover story this week looks at levered equities -- debt-heavy companies whose shares have been pummeled amid a recent credit-market crunch. While highly risky, the time may be right to invest in debt-laden stocks who stand to post above-average gains when the credit markets return to normal. "The best time to buy these is when credit spreads peak," one money manager says. "Since you don't know when that will happen, you may want to start buying them now. Many stocks are pricing in very negative outlooks."

Following are Barron's levered equity "winners":

  • FelCor Lodging Trust (NYSE:FCH) -- despite solid results, shares are down to $13 from $29 as investors fret a possible lodging downturn. But FCH should benefit from recent extensive renovations, and its dividend yield is a whopping 11%, all paid out of free cash flow.
  • Bon-Ton Stores (NASDAQ:BONT) -- shares are down to $6 from $57, yet Barron's sees no serious short-term risks to the company's survival. With a hefty short-seller base, shares could rocket on any good news.
  • Libbey (NYSEMKT:LBY) -- once credit markets thaw, LBY should be able to cut its debt expenses by three percentage points. If the co. hits 2008 numbers, shares could climb 50%.
  • McClatchy (NYSE:MNI) -- down to $10 from $50 on a disastrous debt-based purchase of Knight Ridder. Shares trade at just 8x earnings and 6x cash flow.
  • Gray Television (NYSE:GTN) -- shares trade at $6, down from $11, after hopes of a leveraged buyout faded. President Bob Prather says TV properties are in far better shape than newspapers and radio. Political ads should make 2008 strong.
  • Carmike Cinemas (NASDAQ:CKEC) -- despite weak movie theater attendance, the company looks like a safe bet. Shares, $7 down from $27, could double.

Leveraged companies Barron's doesn't suggest: Charter Communications (NASDAQ:CHTR) [still expensive despite $1 shares]; Revlon (NYSE:REV) [still shedding market share]; and Six Flags (NYSE:SIX).

Source: 6 Risky-But-Worth-It Bets - Barron's