Don't wait for companies to solve problems before you invest. That is a game Wall Street analysts play, and it doesn't work. It's hard to find an analyst who will issue a buy rating on a company that is down in the dumps, but that is the best time to buy. And while it is counterintuitive, the best time to sell, generally, is when a business is hitting on all cylinders, enjoying peak profitability.

I have recommended 15 different value stocks in columns for RealMoney.com. All 15 are up, with an average gain of 25%. Any reader who has taken advantage of those recommendations should have his or her subscription covered by now, and then some.

While I continue to like all 15 recommendations, at today's prices the best risk/reward is offered in Hasbro (HAS:NYSE - news - boards), Office Depot (ODP:NYSE - news - boards) and TRW (TRW:NYSE - news - boards).

Liz Claiborne

A new recommendation for purchase, Liz Claiborne (LIZ:NYSE - news - boards), designs and markets an array of apparel brands, from the Liz brand to DKNY, Kenneth Cole, Dana Buchman, Lucky and many others. The stock of Liz Claiborne represents one of those rare investments in which there is not a lot of work for an investor -- except to buy it and put it away for the long haul.

Liz Is a Keeper Its revenue and profits have increased, but the company's value has decreased

While Liz Claiborne has increased revenue and profit substantially over the last five years, the value of the company has cheapened considerably.

The chart above does not accurately portray the actual decline in the value of Liz Claiborne. That's because the change in a company's value is not always reflected by a change in the stock price. The number of shares outstanding may change a lot over a period of years. And that is the case for Liz, as the company has shrunk its share base from more than 66 million shares outstanding to about 52 million through an aggressive stock buyback program.

Is Liz Off the Rack?
	1997	1998	1999	2000	2001 (est)
Revenue (mil.)	$2,413	$2,535	$2,806	$3,104	$3,250
Peak stock price	57.90	54.90	40.70	48.30	44.5 (cur)
Shares	66.1	63.95	56.72	52.2	52.2
Market value (mil.)	3,827	3,511	2,309	2,521	2,323
Source: Alsin Capital Management

As you can see from the table above, revenue has grown nicely over the years, but the current quote of $44.50 is down 23% from the peak of $57.90 in 1997. The decline in market value is much greater because of the lower share base, dropping almost 40%, from more than $3.8 billion in 1997 to about $2.3 billion today.

If you research Liz Claiborne and its impressive history, I think you will agree that this company does not get the respect it deserves. My earnings estimate for the current calendar year is $3.95, and for next year $4.45. There is no justification for this company, with its strong management team, balance sheet, profitable history and diversified product line, to sell at 10 times forward earnings.