IGNORED and even DESPISED, these stocks have a lot going for them. Sooner or later, the world will beat a path their way.

Okay whodunit? Borders must be up to ghastly crimes these days because shares of the chain of mammoth bookstores just dipped to a 52-week low. If market value were it book, Borders' $1 billion would look like The Poky Little Puppy compared with Amazon.com's $20-billion War and Peace. And while Amazon, Borders' electronic archrival, has, yet to earn a nickel, Borders in its fiscal year ended in January had robust profits that were 14% higher than the year earlier;

So what is the Borders mystery? Well, like a lot of solid companies these days, it appears merely to be in the wrong place at the wrong time. in Borders' cane, that means it's been blindsided by the Internet-stock fad. For other solid companies, it could be that their industry is sagging or simply that they're wallflowers al a dance where a few humongous, fast-growing companies hog the spotlight. Last year, half the run-up of Standard & Poor's 500-stock index came from just 15 stocks.

This isn't a new phenomenon. If you separate the S&P 500 stocks into two piles--those relatively expensive compared with their book value per share (growth stocks) and those relatively cheap (value stocks)--you'll find that over the long, long term the value stocks do better. But that hasn't been the case over the past three years, or even the past ten, as growth stocks have held sway, "Were probably in the worst value market in a generation," laments David Dreman, contrarian investment guru and mutual fund manager.

But no matter. The laws of investing have not been changed, only suspended. Septuagenarian money manager Martin Whitman has seen his share of investment fads come and go. Whitman, the founder of Third Avenue Value fund, insists that eventually a company will be priced based on its value if sold or liquidated. He contends that buying strong companies that have been misjudged and beaten up by a fickle market is the safest and most profitable way of investing over time.

"Over time" is the phrase to remember because no one knows when the wind will shift and get behind undervalued stocks. Moreover, buying the underappreciated is different from buying the truly appalling. While Salomon Smith Barney money manager Anthony Gallea recommends starting your search for value by checking stocks that have dropped by half, he adds: "Just because a stock is down 50% doesn't mean it's going to come back."

Gallea, co-author of Contrarian Investing (New York Institute of Finance, $16), says that the first step in culling unjustly undervalued stocks from the rest is to identify those unencumbered by a big debt load. After that, figure out why the price is down. Is it in a cyclical industry at a low point? Is management in tumult? If problems look temporary, invest and wait for the market to come to its senses. These five stocks, for instance, are the sort that give value investing a good name.

Making Book

No question that amazon.com is gnawing away at the market share of Borders (symbol BGP, New York Stock Exchange, recent price $15). But given the precipitous drop in Borders' stock price from a 52-week high of $42, it's as though the market sees Amazon as a school of blood-crazed piranhas.

Actually, the feeding frenzy amounts to only a nibble at this point. "So Borders is down--the Internet is going to take some business away," says Dreman, "but it's only 1% or 2% right now." And even if the ultimate impact of Amazon and other Net booksellers is 11% to 15%, as some analysts estimate, that's already been factored into Borders' stock price, leaving nothing but upside potential. If over the next several months Borders' store sales increase in the 4.5%-to-5.5% range from a year ago, as some predict, it will go a long way to taking the teeth out of the Amazon scare.

In the meantime, Borders has nothing to be ashamed of. In fiscal 2005, which ended in January, sales grew 15% from a year earlier. Earnings rose 14%. The consensus of analysts surveyed by Zacks Investment Research is for earnings in fiscal 2005, which ends next January, to go up another 13%, to $1.28 per share. Based on that last number, Borders' current price-earnings ratio is a mere 13.

The management at Borders is not a pack of Luddites. While the chain isn't about to abandon its nearly 250 superstores in the U.S. and its more than 900 mall-based Waldenbooks bookstores, it does have its own Internet site (www.borders.com), where books, videos and music can be bought. But Borders will remain primarily what is called a "destination" in the retail business. In Borders' case, it's a place where you can browse the shelves, have a cup of espresso and even take along the kids. So if on a gut level you believe the Internet can't replace the sights and smells of a bookstore, buying Borders stock is like finding a first-edition Gutenberg Bible in the bargain bin.

Petro Dollars

You have only to check the gasoline pump to understand why Schlumberger Ltd. is down from its 52-week high of $87. Lower demand and a worldwide oil glut wiped out 10% of the petroleum-service company's revenues from its basic business in 2005's fourth quarter, when its earnings were down 30% from a year earlier. The Asian economic collapse has cast a pall over demand in the short term, and that's reflected in oil companies' slowing down their development of promising fields in Alaska, the North Sea, Russia and South America. OPEC has cut production as the price per barrel slumped to 1986 levels, and non-OPEC producers continue to flood the market.

The petroleum industry's crystal ball is cloudy. "What's the weather going to be like this year?" asks Scott Schermerhorn, who runs Colonial Value fund. "The answer is you don't know, so don't worry about it." The same goes for Asian oil demand. "When will Asia come back and be a growth buyer of oil? You can't be sure," he says.

What you can be sure of is that energy is in a temporary supply-demand imbalance. The only issue is one of timing, Schermerhorn says. Given that the energy sector will rebound someday, it makes sense to buy the strongest player, which will likely rebound the fastest.

In oil services, Schlumberger (SLB, NYSE, $59) is a Cadillac company. Its earnings growth averaged 15% per year in the past five years despite depressed energy prices and a rocky time in the oil patch. While a consensus of analysts from Zacks puts the company's earnings this year at $1.67 per share (a drop from $2.49 in 2005), they are looking at an increase to $2.08 in 2005. The P/E on forecast 2005 earnings is 22.

The Reaper

Things are looking pretty grim these days at Service Corporation International because, darn it, people are living longer. Service Corp. is, of course, the nation's largest operator of funeral homes and cemeteries, and its shareholders take comfort in the knowledge that we'll all die one day. But that isn't soon enough for Wall Street, and the share price of Service Corp. (SRV, NYSE, $15) has been ... well, fading fast. After hitting a high of $47 last year, it drooped to the low-$30s range before announcing a dismal and confused fourth quarter and plunging to its current sorrowful level.

The decline in the death rate, while statistically slight, has been looming over the funeral industry for several years. "As people don't die, it's obviously going to affect these firms" and to a greater degree than is obvious at first glance, says Standard & Poor's analyst Jordan Horoschak. The reason is that the industry's big firms are consolidators--they buy up smaller firms in a largely fragmented industry--and therefore tend to be highly leveraged. "If people die when they should, then these firms make a lot of money," says Horoschak. "If they don't, then the downside becomes exacerbated."

The trend finally caught up with Service Corp. in 2005's fourth quarter, when profits dropped 36% from a year earlier. Worse, the company didn't give a hint of the shortfall until the end of January, leading investors to feel they'd been bamboozled. Class-action suits are pending. Earnings this year are expected to be flat versus last year's at about $1.31 per share, which is also what the company earned in 1997.

While the fourth-quarter debacle is worrisome, some analysts chalk it up to growing pains from the company's quick expansion. Says Fifth Third Bank analyst Rick Wayman: "All the fundamentals are still there. I liked it at $32; I love it at this price." Based on expected '99 profits, the P/E ratio stands at a dirt-cheap 12.