Dana Holding ( DAN)

Russell Croft, portfolio manager for the Croft Value Fund ( CLVFX ), which has $900 million in assets under management, thinks Dana, an auto parts maker, looks attractive right now, citing strong management, a new dividend and favorable industry trends.

"Good chance to outperform the market by a decent margin over the next couple of years," he says, calling Dana a "classic cheap stock" with much more room to grow. "I think Dana was off of a lot of peoples' radar because of the tough time they and their industry had during the last big downturn in 2008 and 2009."

As of Tuesday's close at $16.34, the shares have nearly doubled since hitting a 52-week low of $9.45 on Oct. 4 but the forward price-to-earnings multiple is still only 7.2X, much lower than 13X multiple of the S&P 500.

A couple of years out of bankruptcy protection, Dana brought in CEO Roger Wood from larger rival BorgWarner ( BWA) last year, and Croft says that was the catalyst for his decision to buy shares.

"He is focused on margin," says Croft, who also expects the stock to benefit from the rebounding truck market and its growing presence in the promising electric and hybrid car markets. "The stock is not as green and cheap as it was a couple of months ago," he notes, but "in a market like this where people are taking on more risk, I think Dana's valuation can keep going up."

Another plus, last Thursday, Dana's board initiated its first-ever quarterly dividend of 5 cents a share of common stock. The majority of the sell side is on board with Croft's bullishness with 11 of the 14 analysts covering the stock at either strong buy (4) or buy (7), and the 12-month median price target at $20.75, implying potential upside of 27% from Tuesday's close.

Check out TheStreet's quote page for Dana Holding for year-to-date share performance, analyst ratings, earnings estimates and much more.

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