10 Dogs Ready to Bark in 2004

Stocks like Disney and Merck are turnarounds waiting to happen and are definitely undervalued at the moment. But right now it's impossible to predict when the new management necessary for a turnaround will get a shot at maximizing shareholder value.

The best hunting for most investors is in Group 2: It offers the best potential for solid returns in a reasonable period of time -- say the next 18 months. Group 1 stocks are more suited to quicker trigger fingers because they are closer to the end of major moves. And Group 3 names require lots of patience and slow, steady accumulation.

As always, do your own due diligence. But also remember to make your picks with your own investing style and time horizon in mind. Investing in turnarounds only works if you don't change your mind before the stock changes direction.