NEW YORK (TheStreet) -- In his great work The Intelligent Investor, Benjamin Graham, the father of value investing, discussed the potential virtues of buying when others are selling, and selling when others are buying.

Graham acknowledged that this is very difficult for most investors to do. It entails going against what the rest of the investing crowd is doing, which is probably more difficult now than in Graham's era because of the up-to-the-minute information and opinions now available to investors.

To go against the crowd requires a very thick skin; it is the equivalent of having an unfavorable opinion on Facebook ( FB), while other investors load up in anticipation that the stock may double from here.

To be a value investor is to be a contrarian at times -- identifying and buying stocks that are severely depressed and shunned by other investors. It meant buying stocks such as Gannett ( GCI - Get Report), Krispy Kreme ( KKD), Denny's ( DENN - Get Report), Saks ( SKS), Cabela's ( CAB) and others when they were severely depressed, and few investors, including those on Wall Street, were interested.

While those stocks recovered and richly rewarded investors from their lows, all but Cabela's was at one time priced for bankruptcy. Denny's parent actually filed for bankruptcy many years ago, and the company that emerged had its own share of difficulties.

The business of identifying struggling companies is the easy part; successfully determining those that will turn around is much more difficult. After all, the herd is not always wrong, for sure; and to simply buy what others are selling just to play the role of contrarian is a recipe for disaster.

The value investor must be discerning, and that takes a great deal of research and ultimately a great deal of patience. It also takes the willingness to throw in the towel when you've made a mistake and the story does not play out as you'd believed it would. I've certainly made my share of mistakes.

There are a couple of beaten-down stocks I find intriguing now; both stocks have suffered dramatically, and although in my opinion, it would be premature to pull the trigger at this point on either, both are worth further scrutiny.

J.C. Penney ( JCP - Get Report) is the epitome of a struggling retailer. Just when you think it can't get any worse for the stock, it stumbles further.

Ron Johnson, hailed by many in the value investing crowd as the cure for the old-time retailer, was unsuccessful in his stint as chief executive officer, and same-store sales fell off a cliff. Then Bill Ackman, one of the stock's biggest proponents, threw in the towel, quit the board of directors, and sold his stake.

This morning, the company's secondary stock offering was priced at $9.65 per share, 7% below yesterday' s closing price, and a level the stock has not seen since 1986. Although the company is asset rich in terms of real estate, owning more than 400 store locations, I'm not sure the dust has settled yet on the stock. It remains on my watch list. JCP Chart JCP data by YCharts

The other is a much smaller name, toy company JAKKS Pacific ( JAKK - Get Report), which I wrote about in July.

At the time, the company had just reported a terrible quarter, and the share fell 40%. Since then, the stock has fallen another 33%. Analyst estimates are calling for a return to profitability in 2014, albeit a very small profit. While intrigued, I am not ready to pull the trigger on this one yet either. It's still a pretty messy situation, but one that bears watching. JAKK Chart JAKK data by YCharts

Both of these stocks could fall further; I am not yet convinced that the crowd has given up on either.

At the time of publication, the author was long Krispy Kreme and Gannett.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, Heller was long XXXX.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.