Shares of Arkansas Best are also cheap by another measure: They trade at just 90% of tangible book value. That should provide downside support if the market gets choppy.

Cliffs Natural Resources

Value investors tend to seek out companies that have a strong base of assets but are otherwise temporarily out of favor as near-term sales and profit trends weaken. Undergirded by a strong balance sheet, shares can hold their own until operations improve. Of course, there are so many moving parts to a balance sheet, and all of the assets may be valued more optimistically than the real world data suggest. That's why it's always interesting to look at a company after it has just taken a fresh, more realistic view of its balance sheet.

Mining firm Cliffs Natural Resources ( CLF) is a perfect example. The company recently announced that it is writing off roughly $2 billion in asset values because previously acquired mines are no longer worth as much. This is known as "kitchen sink accounting," when a company aims to get rid of all the bad news at once.

The good news: Cliff's revised balance sheet is now a lot more accurate. The better news: That updated balance sheet is worth a lot more than the company's market value. Cliff's now has roughly $6.3 billion in shareholder value, compared to a market value of just $5.1 billion. That means shares might rally 20% just to get back up to book value.

That's cold comfort to any investors that have seen this stock fall from $100 in the summer of 2011 to a recent $36, but the next stock price move now appears to be upward.

To see these stocks in action, visit the 4 Turnaround Plays for 2013 portfolio.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.
Stockpickr is a wholly owned subsidiary of TheStreet.com.

If you liked this article you might like

Elisabeth Moss Isn't the Only Handmaid's Tale Actress Packing Serious Star Power

Comcast Dodges Big Social, Moves Watchable In-House

Microsoft's New Xbox One X Shows It's Done Trying to Please Everyone

'The Handmaid's Tale' Emmy Win Is Really Big for Netflix

Stocks Dad Would Have Loved, And Why He Was Right