Solid Stocks For Value Investors

With the Dow inching closer and closer to the 11,000 mark, many believe that the market has come too far too fast and that the fundamentals don't support what we've seen thus far. There are, however, a few stocks that look to undervalued at this point in time and may provide value investors with some nice opportunities going forward.

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Flying Under the Radar
The first company on our value list is Babcock & Brown Air (NYSE:FLY), an Irish firm that leases commercial jet aircrafts. Babcock & Brown has seen its share price recover nicely from the heart of the recession when it dropped down to $3. While the majority of the airline industry struggled to stay above water in 2009, Babcock & Brown recorded very strong earnings of close to $90 million for the year on the strength of a 98% lease utilization factor. The company managed to stay profitable throughout the year and increased both total and free cash by 38% and 68% respectively. The firm also increased shareholder value by repurchasing 2.2 million shares throughout the year at an average price of $4.08, a move that is already looking good as FLY currently trades at just over $10.

While the stock price has nearly doubled in the past year, the fundamentals still point to an undervalued company. FLY currently trades at a very low P/E of 3.6, noticeably lower than other industry players such as AerCap Holdings (NYSE:AER). Babcock also delivers an average ROE of over 22% and trades at only 85% of book value, very rare for a company with so much cash on its balance sheet. If all these metrics aren't enough to entice investors, perhaps FLY's 7.8% dividend will do it.

Read Into the Value
Another potential value play should be more of a household name for retail investors, Barnes & Noble (NYSE:BKS). The nation's largest bookstore chain may not seem like a company that you would think to bet on heading into this new digital age, but the company fundamentals are solid (4.4% dividend and 0.26 price-to-sales). Barnes also looks ready for the challenges of the changing face of the book industry. The biggest example of Barnes & Noble's new strategy is the recent promotion of William Lynch from president of the company's web division to CEO, making him the first person outside of the Riggio family to hold the position since Leonard Riggio bought the company in 1971. Lynch brings an impressive resume to the position, having held executive positions at Palm (Nasdaq:Palm) and Gifts.com.

Barnes Buyers Beware
It appears as though BKS' digital plans have been well received thus far, as sales on BN.com were up 32% in the latest quarter and sales of the company's new e-reader the Nook have been surprisingly good. However, many believe that Nook sales will suffer going forward with the release of Apple's (Nasdaq:AAPL) iPad into an ultra competitive environment that also includes Amazon's (Nasdaq:AMZN) Kindle and a lineup of e-readers from Sony (NYSE:SNE). Barnes & Noble has taken a proactive approach however, prepping a new app for the forthcoming iPad that should allow BKS to take advantage of "the app effect".

Bottom Line
These are just a couple of companies that could end up being strong value plays for investors going forward. These firms offer strong fundamentals, nice dividends and promising growth potential in the coming year. (For more on stocks that could be undervalued, check out Oversold Stocks Primed To Pop.)

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