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Despite the market highs there are still opportunities for astute investors.

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Many of history’s greatest investors have described themselves as ‘contrarian.’ A contrarian mind-set has benefitted these investors as it has allows them to go against the crowd, think for themselves and act with the courage of their convictions without having their views influenced by the thinking of others.

The outcome of this approach is that contrarian investors will often be attracted to stocks which are mired in pessimism. This pessimism displayed can at times lead to mispricing in a specific stock, sometimes in whole industries and very occasionally in the entire market.

The following four stocks are trading not only near their respective 52-week lows, but in most cases are also trading near multi-year lows and each could be described as out of favour with the broader market.

1)      Webjet Limited (ASX: WEB) had a turbulent 12-month period with the stock price falling 38% as investors became increasingly concerned about large, overseas online competitors, entering the domestic market. The company’s recent half-year result showed a 12.4% increase in earnings per share which will have some investors re-evaluating if the stock is really ex-growth or not.

2)      Reject Shop Ltd (ASX: TRS) is another retail business which appears to have fallen out of favour with investors. The company’s share price is down from a 52-week high of $18.47 to just $10.09 currently. Investors were displeased with the Reject Shop’s recent interim results, however this could be a classic case of market over-reaction.

3)      OrotonGroup Limited (ASX: ORL) has struggled to stem the decline in its share price – which just hit a new 52-week low – since losing the license for Polo Ralph Lauren. The company has moved quickly to replace these lost earnings with new licenses including the well known Gap brand. Of course the company still owns its namesake the upmarket Oroton brand.

4)      Ten Network Holdings Limited (ASX: TEN) share price remains at depressed levels with the stock price down around 60% over the past five years. As the recovery of Fairfax Media Limited’s (ASX: FXJ) share price showed recently, it only takes a small amount of positive news to sometimes substantially re-rate a depressed stock.

Foolish takeaway

Contrarian investing is not easy and it’s certainly not for everyone, but investors who master the art have historically managed to outperform.

Motley Fool contributor Tim McArthur owns shares in OrotonGroup Ltd.

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