With stocks beaten up, those courageous investors looking for cheap stocks should take a look at Dow Chemical (NYSE: DOW). With the recent announcement of its 50/50 joint venture with Kuwait's Petrochemical Industries Company (PIC), to form a market-leading, global petrochemicals company, Dow stands to become the world's leading petrochemical company. Look for growth in China to help propel earnings over the next decade.

"We're creating a petrochemicals company that will be a global leader from its first day of operation, an $11 billion company that is well positioned to grow profitably across the industry cycle," said Andrew N. Liveris, Dow chairman and CEO. "For Dow, this marks an important milestone in our transformational strategy: growing our Basics businesses through joint ventures; reducing our capital intensity; and, freeing up cash to invest in our portfolio of Performance and Market Facing businesses."

The stock is off 20% from its high, and it's now sporting a juicy yield of 4.5%. That's not all; the stock has a P/E of about 10.60 and more importantly, a PEG of just 0.86. So what you have is a company with nice growth, paying a handsome dividend, that has gotten pounded down. Dow Chemical looks like a winner for investors over the next few years.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no position long or short in any stock mentioned as of 1/8/08.