This is good stuff, and I especially like the contrarian angle on JCP. It seems like you don’t see many forward PEGs at 0.63 anymore (Graham and Dodd might even jump on this one were they still around).

I ran through my basic DCF model using 4% annual Free Cash Flow growth and 3% perpetuity growth and came up with a value of 81.72 per share (roughly 50% undervalued). You can see how I built this model at:

http://www.evaluatingstocks.com/2007/11/18/build-a-simple-excel-model-for-valuing-stocks/

With financial stocks and the US dollar taking a beating right now it may be worthwhile taking a look at Canadian banks. They are increasingly active in the US and will likely be able to take advantage of the growing dollar disparity. Try RBC, TD, or CIBC on the Toronto Stock Exchange. Yes, they too have been somewhat hit recently, but longer term I fully expect them to rebound better and faster.

Blain – I love that you’ve highlighted some great contrarian plays here. At the very least people should be thinking abou these kind of stocks. Keep up the good work!