It is possible to find unreasonably undervalued stocks even when the market is fairly valued. France Telecom (NYSE: FTE ) and Windstream (NASDAQ: WIN ) have both plummeted over the last year as the overall market indexes continue to make gains, but the sell-off for these two stocks has gone a bit too far -- especially considering their very attractive dividend yields.
It's easy to panic when stocks in your portfolio decline, but the best thing to do is to remain calm and reevaluate your thesis. Many times you might find that the market has overreacted to a temporary setback. Or, even if you do find that the stock is worth less, it might have been oversold to a point where it is still undervalued compared to your new estimate of the stock's worth. These situations might be good opportunities to build up holdings of high-dividend stocks and lock in a higher yield.
Source: Motley Fool
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