Joshua Strauss discusses socially responsible stock bargains with Gregg Greenberg in this video.

Joshua Strauss, manager of the Appleseed Fund ( APPLX), deviates from most managers of socially responsible funds who favor growth-oriented companies over value stocks.

"Historically, value investing has proven to be a superior methodology," says Strauss, a partner at Chicago-based Pekin Singer Strauss Asset Management, which oversees the $11 million fund. "There's a lot of opportunity to find good stocks with low P/Es and low price-to-book ratios."

Socially responsible funds gravitate toward alternative energy and technology stocks, which typically aren't considered cheap. But Strauss looks for undervalued companies that emphasize human rights, environmental conservation and community investing. His mid-cap value fund, named after the famed apple entrepreneur, shuns tobacco, gambling, alcohol, pornography and weapons stocks.

Those stock-picking restrictions haven't limited the fund's performance. Appleseed is down 9% year-to-date while the S&P 500 has fallen 17.5%. The fund was the best-performing socially responsible fund in 2008, according to Morningstar. It lost 18% last year, when the index dropped 37%.

One stock that Strauss is especially high on is peanut and almond purveyor John B. Sanfilippo & Son ( JBSS). The company takes up 15% of Appleseed's assets, quite a chunk considering the fund holds fewer than 25 stocks.

"John B. is trading at about half its book value with over a 20% free cash-flow yield, so we love it from a value perspective," says Strauss. "Nuts are a healthy source of vegetarian protein to protect against heart disease, and the carbon footprint for nuts is far smaller than that compared to other forms of protein like beef or chicken."

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