LeapFrog-ing Back Into Value Territory?

NEW YORK (TheStreet) -- It's an exciting day around here when I stumble onto a stock that actually looks cheap.

Don't get me wrong, I like it when the markets are on a tear as much as the next guy, but as a value investor, I am not doing a whole lot of buying.

Some of my fellow value brethren will unabashedly express their hope for a market correction, providing them with an opportunity to deploy some of their dry powder. I'm not in that camp; I know that corrections will occur, but don't spend time hoping for them to happen. They will happen on their own once the gap between price and value becomes too wide. I don't believe that we are there yet.

U.S. markets aren't cheap at this point, but not ridiculously expensive, either. So it just takes a lot more time and effort these days to find compelling value ideas, which is fine with me, because I like the work.

One company that looks interesting here is technology-based learning-product company LeapFrog Enterprises (LF). This isn't a new idea; the company has hit some of my value-related screens in the past, but had fallen off the radar for a few years. The company has put up some interesting earnings numbers in recent quarters, and trades relatively cheaply on several measures, but perhaps with good reason.

Last quarter, revenue rose 4% to $201 million, and the company beat the 32 cent consensus earnings estimate by 5 cents. Revenue, however, was $6 million below expectations, and shares took an 8% haircut due to that shortfall and to a warning about the weak retail environment heading into the holiday shopping season. The company significantly cut its estimates for its all-important fiscal fourth quarter, which is expected to be reported on Feb. 3.

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