5 Stocks for an Oversold Market

NEW YORK (TheStreet) -- If you have been watching the stock market over the past several weeks, you've noticed Wall Street is not happy -- and for that matter neither am I. However, it's for two separate reasons.

Lately investors have become too skittish for my taste and seemingly have little understanding of what is really going on in the market. As Wall Street continues to appear on edge and wanting to punish anything that moves, I wonder how is it possible that the Dow can be down for the year as corporate profits everywhere appear to be on the rise? It doesn't make sense and shows that Wall Street lacks understanding on how to properly appraise value.

Be that as it may, one person's trash is another person's treasure, or as Buffett like to say, be greedy while others are fearful. So in my bargain-hunting mode, I have started to look for a few names that have become significantly discounted from their true potential. Not only do these companies offer considerable amount of value, but they present excellent margins of safety while also offering excellent yields.

I have targeted two networking companies in Cisco (CSCO) and Hewlett-Packard (HPQ), two chip names in Intel (INTC) and Qualcomm (QCOM) and closing out my list with software giant Microsoft (MSFT).

First, in the networking realm, HP and Cisco are the clear front-runners within their own segments such as routing and switching. They are also well positioned for markets such as the cloud that is soon to emerge and dominate both consumer and corporate enterprises.

Cisco and HP at this point are excellent buys as both have become outstanding turnaround stories -- even though Wall Street has yet to latch on -- in particular to Cisco which continues to churn out one excellent quarter after another while maintaining margins that continue to lead the industry by almost 50%.

For HP -- what can be said that has not already said? The company recently reported better-than-expected earnings results that beat analysts' estimates both on the top and bottom lines -- prompting many naysayers to affirm that Meg Whitman was indeed the right person for the job. The company is combining its PC and printing divisions and recently confirmed that it will begin eliminating 27,000 jobs in a cost-saving measure of as much as $3 billion to $3.5 billion by 2014.

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