Stocks go for a song; even blue chips seen as undervalued

— -- Looking for cheap stocks? Skip the calculator and fancy spreadsheets. All you need is a blindfold.

The market has so fiercely pummeled stocks, knocking them to 1996 levels, that investors can almost pick value-priced stocks at random, investment professionals say.

The plentitude of stocks with historically low valuations might be the one bright spot in an excruciatingly painful bear market that's wiped away half of stocks' value from the 2007 high.

Forget P-Es, PEGs and price-to-book ratios. All that's needed now is guts and patience.

"Just name a stock," says Marc Gerstein, research consultant with Portfolio 123, which builds databases to study stocks. "It's undervalued."

In fact, among the largest U.S. stocks in the Standard & Poor's 500, five are trading for less than $1, 12 are below $2, and 51 are under $5.

But where some investors see pain, others see possibility, in that:

•Stocks aren't just on sale, they're selling at fire-sale prices. More than half the stocks in the S&P 500 are trading for less than the market's long-term historical average P-E of 15 times expected earnings, says S&P's Capital IQ. In fact, 192 members of the S&P have a P-E of 10 or less based on their earnings in the past 12 months. Just 36 companies had P-Es that low at the end of 2007.

"You could throw a dart" at a list of stocks and find a cheap one, says Bob Olstein of Olstein Capital Management. "Values are off the wall."

•"Good" companies' stocks are on sale, too. During this correction, even the bluest of blue chips are being tossed away like trash.

That means investors can still find great deals on companies with strong long-term track records.

"You don't have to own garbage to be a value investor," says Larry Coats, co-manager of the Oak Value fund.