Take advantage of the market's plunge with these 3 stocks

It's been the worst December in 40 years but things are looking up.

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The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rallied 0.7% or 35.9 points on Friday to end what was the longest losing streak since July 2012, with some analysts now believing that the effects of the much anticipated tapering of the Federal Reserve's stimulus program are now "mostly priced in" to the market.

Whilst many had been anticipating a "Santa rally" for the stock market in December, fuelled by a strong pipeline of initial public offerings, the market has actually plunged. Since the beginning of the month, the ASX 200 has fallen 4.2%.

QBE Insurance Group (ASX: QBE) was the worst performing stock for the week, falling 34% following its profit warning. The big four banks offered no support for the index either, with Commonwealth Bank (ASX: CBA) dropping 1.3% and ANZ (ASX: ANZ) and NAB (ASX: NAB) falling 2.4% and 0.3% respectively. Westpac (ASX: WBC) also shed 1.6% despite having forecast an increase in demand for loans over the coming year.

However, Daniel Young, Citi's head of sales trading, stated that: "Friday's price action was a relief rally as a result of the market being oversold." Young also noted that the market could see some positive activity over the coming week as the major banks pay their dividends which could be put to work by investors.

With the index now sitting at just under 5100 points, investors should consider taking advantage of stocks trading at a discount. Here are three stocks that are appealing right now:

Coca-Cola Amatil (ASX: CCL) is still trading below $12 per share following a year that shareholders would prefer to forget. Given the strength of the business and its brands, CCA should bounce back strongly in years to come, making today's price an ideal entry point.

Telstra (ASX: TLS) has rallied hard over the last 18 months or so, but still has plenty of value to offer as it continues to tighten its grasp over the telecommunications industry. Offering a 5.7% dividend yield, Telstra would add fantastic value to your portfolio's core.

Collection House (ASX: CLH) is a receivables management company which is run by a strong management team and has proven to live up to its strong growth potential. With a market capitalisation of just over $220 million and offering a 4.3% dividend yield, its shares are trading at a 13% discount compared to their 52-week high and are well-positioned to deliver outstanding returns in the long-run.

Get the full report on our top dividend stock for 2014 — FREE!

Motley Fool contributor Ryan Newman owns shares in Collection House.

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