The volatility in the past few weeks has brought some interesting names into the under-$10 universe. As often happens, investors have adopted a more conservative approach to investing and so have stepped away from stocks that have "baggage." However, for me, the author of the Stocks Under $10 newsletter, this reaction has created opportunities in some of names that had been beyond my reach.

Because so few single-digit stocks end up on anyone's watch list, I created a screen of stocks that currently trade under $10 and have seen their share price decline by more than 20% since July 13 -- the date when the Russell 2000 index was at its all-time peak. This effort yielded 159 stocks that trade on major U.S. exchanges and have market caps above $100 million.

I've included the entire list of 159 stocks at the end of this article, and I've chosen three of them to profile here. These stocks caught my attention because they sold off far more than the overall markets and seem to be completely out of favor with the Street. This leaves high price-appreciation potential in the event of any good news.

The first stock that jumped out was

Tenet Healthcare

(THC) - Get Tenet Healthcare Corporation Report

. The provider of health-care services is down roughly 50% over the past 12 months, but insiders -- including the CEO -- have been buying shares at the current levels. Also, the company received an upgrade on Monday from sell to hold from Deutsche Securities.

Tenet was recently trading at $3.35, its lowest level in more than 10 years, and is clearly out of favor with the public after numerous missteps. But the company now trades at only 0.2 times sales, and despite its large debt position of $4.7 billion and declining margins, the company may be worth a look at the current level.

The next stock on the list that caught my attention was

Jamba

(JMBA) - Get Jamba, Inc. Report

. The fruit juice company has just more than 600 stores, but management has goals of having 5,000 units in the future. Even if it reaches 2,500 stores, the company will be demonstrating huge growth, but same-store sales for the second quarter, which were released on Aug. 14, declined more than expected.

At $6.63, the stock is down roughly 35% over the past three months; investors seem concerned with the slowing macro spending environment, noticeably in California, where Jamba has a major presence. But the company has easier same-store sales comparisons for the next two quarters, and given the latest selloff, a slight beat next quarter could result in a pop in the share price.

Another well-known stock that has seen its shares fall hard over the past few months is

dELiA*s

TheStreet Recommends

(DLIA)

. The direct marketing and retail company that caters to mostly teenagers has seen its share price decline by more than 20% in the past two months and roughly 50% from its April highs.

Investors are concerned that a slowdown in consumer spending will continue to weigh on the bottom line. But at a recent $5.38, dELiA*s is trading at just 0.6 times sales (lower than the industry average of 0.9), has $20 million in cash and has relatively no debt.

The company is set to report earnings on Aug. 30, and a less-than-stellar report could provide a nice entry point into this retailer, which is expected to grow earnings by more than 25% annually over the next three years.

It's important to note that I have just "begun" our research process on them. The next is to look for any short-term catalysts that could get these stocks back into favor with the Street.

For example, when I added

Taser

(TASR)

in the Stocks Under $10 newsletter, the company was completely out of favor with the public. But litigation risk was subsiding, creating an opportunity to increase sales.

The truth is that the Taser story is still the same today, with shares at $13.50, as it was back when the stock was trading in the single digits. The Street is just now fully aware of the growth potential, thanks to additional analyst coverage and a nice surge in the stock price.

If further research shows that any of the following situations offers investors a favorable risk/reward, then I will add it to my newsletter.

In keeping with TSC's editorial policy, Frank Curzio doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Frank X. Curzio is a research associate at TheStreet.com, where he works closely with Jim Cramer and and writes

TheStreet.com Stocks Under $10

. Previously, he was the editor of The FXC Newsletter and senior research analyst for Greentree Financial, and passed his Series 7, 63 and 65. He appreciates your feedback;

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