By Stockpickr Guest Columnist Glen Bradford

If you believe in the efficient market hypothesis, you can click the back button on your browser. If you believe that Warren Buffett makes his investment decisions using a Magic 8 Ball, click back. If you believe that you can never take advantage of sales at the supermarket, click back.
 
Panic is irrational by definition. Remember Y2K? My mother was stockpiling water and canned goods; there were a bunch of people filling sheds, preparing for the second Cold War.

If you're good, you can always take advantage of bad times. Still don't believe me? I'll point out Dick Fuld as the most recent example.

Fear is raining down, and I'm sowing seeds of opportunity. It's earnings season. I'm trying to grow a "fortune." I'm trying my best to find highly successful companies trading at prices that ignore their risk/reward potential.

The following companies are sorted in descending order from their categories by my personal allocations. All my comments are relative to historical market performance, future market expectations, current pricing of industries and the S&P 500 in general.
 
10-Year Analysis Plays
 
Ebix (EBIX): Except for the first three years, there's a definite upwards trend. I'll illustrate a few companies at the bottom of this article that have similar charts but that I think have peaked (commodity bust). Ebix has not lost a customer in the last six years and still has a long way to grow. Analysts don't cover this company yet. Although its share-splitting history is somewhat queasy, recently it's been splitting bullishly and trying to acquire HealthAxis.

HealthAxis is not a profitable company, so this is not like the Kinetic Concepts (KCI) acquisition of Lifecell (the acquisition of a profitable company of another profitable "super growth" company). HealthAxis has never been profitable, but I imagine that EBIX plans to use HealthAxis to help its health care side. I plan on calling and asking a few questions this next week. In the mean time, check out the company's: investor presentation.

 
 
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Central European Distribution (CEDC): This seemingly unpredictable company is actually a highly predictable seasonal company in disguise. These next two quarters are historically the strongest for the company. This last month has been historically ridiculous as far as stock price goes for this company. On Friday, fear drove it down 17%.

My opinion is the company's opinion. It confirmed its previously stated guidance, which is very strong. It's priced as if alcohol is illegal to drink and we are going into a European prohibition. The technical analysis says it's oversold and it meets a bullish pattern: "Long Tail Down." If I were going to make a guarantee about price appreciation, I'd bet it on this company, right now. In fact, here goes nothing. I guarantee this company will outperform the market over the next month and the next year. 

 
 
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Manitowoc (MTW): This one came along when I realized analysts expect it to outperform Terex (TEX). I realize that analysts are frequently wrong when making estimates, but in times like this when we are looking for a market turn-around, it makes more sense to me to take two companies that are frequently compared and choose one and stick with that one.

I'm determined to buy Manitowoc instead of Terex because I'm not obligated to own them both, and I understand that Manitowoc's reporting procedures are more conservative than those of Terex. That said, I think that Manitowoc paid too much for Enodis. Terex is currently priced to grow slower than Manitowoc, and analysts predict it to grow about half as fast. As far as my investment dollars are concerned, if two similar companies are priced about the same and predictions favor one company 2:1, go with the odds. You're already being a hero buying into this industry.

 
 
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Another Fun 10-Year Chart: The P/E ratio of MTW vs. the S&P 500

 

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National Oilwell Varco (NOV): Love this recent headline: "National Oilwell Varco Closes At Multi-Year Low." It's true that just three months ago, this company was trading at around $80 and is now struggling at around $23.42. The price of the barrel of oil has also been whacked. But seriously, do you think people plan to drill less because the short-term price of a barrel of oil is falling?

I don't. Look to the strong order backlog and OPEC's cutting production last month. We've been holding out, but the politicians are probably going to push drilling for our own in the near future. In the old days, congress tried to make sure that we didn't get something if it didn't make sense for us to have. Now Congress is all about giving as much to their supporters as is physically possible; it's the here and now that's important.

 
 
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Chicago Bridge & Iron (CBI): Chicago Bridge & Iron went through a one-time cost scenario and is barely trading above its 52-week low of $10.34. Its 52-week high is $63.50. The company is issuing guidance above analyst estimates in the short term. Analysts expect the company to grow at about 17% over the next five years, but the company has been doing 32% over the past five. Its 10-year chart is almost perfect. That's a lot of upside!

The trailing 12-month P/E is a lie, so you have to run your own key statistics for this company. Brokers downgraded it on annual forecast cuts due to a one-time UK expense. Chicago Bridge & Iron made the right call and cut its losses. It is priced to grow at 0.8%. Do your homework, and buy low, sell high.

 
 
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Precision Castparts (PCP): I'm calling this a 10-year company with two years of setbacks. If you cut out years five and six, you've got all increases. Either way, the last six years have been crushing too. Currently, it's expected to grow at 1.6%. Analysts expect anywhere between 10% 17% growth. Technically, it's 100% sellable, and everything is oversold. One analyst even went out on a limb and said its stock price may double by 2012. That would get you 18% return on your investment before taxes.

Precision Castparts is in the process of acquiring Fatigue Technology, which expands on what the company already does best. It's hard to judge the acquisition as far as pricing goes because the information isn't disclosed. I'm adding its analysts to my call list.

 
 
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Click here for my five-year analysis plays.

I own XIN, NIHD, EBIX, GHII, CEDC, EJ, KCI, MTW, VSEC, KTII, AOB,VDSI, AIR, BEAV, ARD, BUCY, SOHU, NOV, HURC, CBI, PCP.

Posted on Oct. 14, 2008