While most investors are fretting the markets recent contraction, you can be quite confident that "my pal Warren" has a smile on his face, as does Peter Lynch, Ken Heebner, Bill Miller, Bruce Berkowitz, and any number of fellow value investors that know now may be a time of opportunity. That is because they have the experience and understanding to pounce when they have a chance to buy things cheap.

This is the fourth installment of my series to discover just that: cheap stocks. If you would like to get on board from the beginning then review the initial post which screened for stocks with lower than market average P/E ratios, see Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth. Then I moved on to the the P/S and P/CF metrics in Serious Money: Cheapest Stocks Yet -- From 35 to 26, cutting nine stocks.

Yesterday Hasbro, Inc. (HAS) reported 2009 fourth quarter and full-year results.

For the fourth quarter 2009, the Company reported net revenues of $1.38 billion, an increase of $144.1 million or 12%, compared to $1.23 billion a year ago. 2009 fourth quarter revenues grew 7% excluding a $55.4 million positive impact of foreign exchange. The Company reported net earnings for the quarter of $165.6 million or $1.09 per diluted share, an increase of $72.0 million or 77%, compared to $93.6 million or $0.62 per diluted share in 2008.

The strong results in a bad year support my contention that today's stock market, even in these uncertain times, does have plenty of bargains.

The stock market tried to make a comeback several times today, but the indexes closed down sharply on the day. We did not even have Washington D.C. open to bash the financial markets, but we had continued concern that banks were ceasing to trade with some emerging market banks that are in the nations of the PIIGS (Portugal, Italy, Ireland, Greece and Spain).

Here were today's closing bell levels:

Dow 9,908.39 -103.84 (-1.04%)
S&P 500 1,056.75 -9.44 (-0.89%)
Nasdaq 2,126.05 -15.07 (-0.70%)

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Hasbro (HAS - option chain) shares are rising today after the company reported earnings this morning, posting a fourth-quarter profit of $165.56 million, or $1.09 per share, on revenue of $1.38 billion. Analysts had forecast a profit of 81 cents per share on revenue of $1.34 billion. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on HAS.

HAS opened this morning at $33.65. So far today the stock has hit a low of $33.53 and a high of $35.19. As of 11:40, HAS is trading at $34.99 up $4.18 (13.6%). The chart for HAS looks bullish and S&P gives HAS a positive 4 STARS (out of 5) buy ranking.

U.S. stock futures were lower higher Monday morning as concerns about the debt situation in Europe continued to weigh on sentiment. The Dow industrials, it seems, for now will continue to flirt with the 10,000 level, following general declines in U.S. stocks markets last week.

[Update: So far this morning futures have changed direction several times as investors try to find a firm footing.]

Stocks slumped last as worries mounted over debt problems in Greece, Portugal and Spain and a mixed bag of economic indicators in the U.S. Meanwhile, concerns over Greece abated somewhat as the government worked Monday on a tax overhaul aimed at getting its deficit under control.

Quarterly reports continue to roll out this week, with results due from Allstate Corp. (ALL), Coca-Cola Co. (KO), Marriott International Inc. (MAR), Molson Coors Brewing Co. (TAP), New York Times Co. (NYT), Pepsico Inc. (PEP), Sprint Nextel Corp. (S), Viacom (VIA), Walt Disney Co. (DIS) and many others. Here's a look at a few of the companies that analysts surveyed by Thomson Reuters expect to be the biggest earnings gainers this week.

Analysts are looking for Coinstar Inc. (CSTR), which distributes coin-counting, DVD-rental, and other self-service kiosks, to report that its fourth-quarter earnings more than doubled from a year ago to $0.32 per share. Revenue for the three months that ended in December is expected to have jumped 26.1% to $329.2 million. The analysts' forecast for the full year calls for earnings of $0.94 per share (+46.8%) on $1.2 billion in revenue (+25.9%). Coinstar has beat earnings estimates in the past three quarters, by as much as six cents per share.

Is the market overpriced? Maybe it is cheap, or perhaps it is fairly valued. This is the third in a series examining the issue. Still, it has been my contention that it does not make any difference because no matter how the market is valued as a whole, there are plenty of cheap stocks out there to accommodate a large amount of capital allocation even this deep into a bull run.

If you would like to follow along from the beginning, the initial post screened stocks for lower than market average P/E ratios: Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth.

Let's try and reduce the gambling by examining the facts and ignoring what the bulls and bears are chatting up at the moment. We started the process by screening for lower than market average P/E ratios, see: Serious Money: Market Looks Cheap to Me -- 35 Stocks.

Two more important criteria influence today's review: the yield, a favorite of "my pal Warren"; and the price-to-earnings-to-growth (PEG) a focus of Peter Lynch, the retired fund manager extraordinaire of Fidelity's Magellan Fund.

Let's check out some earnings reports from earlier in the week. We have Mattel (MAT), a toy business, Newell Rubbermaid (NWL), a consumer products company, and Sherwin-Williams (SHW), a supplier of fine paints. In all three cases, we'll see that technical concerns may outweigh fundamental strengths.

Mattel: Everyone loves toys, right? They're fun to play with. But no one wants to invest blindly in a stock even though it represents games and action figures. That's where the hard data come in. According to the fourth-quarter press release, Mattel made 89 cents per share, representative of an 80% increase. Incredible, huh? A higher gross profit and a better handle on operating efficiency drove the growth. Better commodity costs also helped out.

We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times due to the volatile market.

The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.

Hasbro, Inc. (HAS), a toy manufacturer that competes with Mattel, Inc. (MAT) and JAKKS Pacific, Inc. (JAKK), is near a 52-week high right now. And it's probably on a lot of minds at the moment; after all, we just got through the Santa season. Since 2010 is just about to begin, many shareholders who were new to the stock this year are probably wondering whether they should keep the company or book profits.

It all depends. If you bought with the intention of holding on for the long term and are willing to put up with potential downside risk, with an eye toward adding on the dips, I'd say you can safely hold the shares with confidence. Hasbro has a great collection of brands, and a portfolio probably will benefit over time from exposure to the company.

Toymaker Hasbro Inc. (HAS) is more than on the mend, which is a major reason I'm reiterating my buy rating for the company's shares, first recommended on June 22, 2009 at a price of $24.30.

If you bought HAS in June, you're up 30%. Note: Hasbro is a high-risk stock, not suitable for moderate/low risk investors.

Viacom (NYSE: VIA), a content player in competition with News Corp. (NASDAQ: NWS), Time Warner (NYSE: TWX), Sony (NYSE: SNE), and General Electric's (NYSE: GE) NBC Universal, issued Q3 numbers today. If we had a different market on our hands, I think the stock would have reacted better to the news. Revenues were down 3%, but adjusted income rose 25% to 69 cents per share. According to Bloomberg, the bottom line came in well ahead of estimates, which were pegged at 57 cents per share.

Sounds good, doesn't it? Well, the company's A shares are down slightly as I write this by about 0.6%, and the B shares are just about flat. Like I say, if the broader indexes were in an uptrend this afternoon, we probably would have seen a pop in the stock.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Altria Group Inc. (NYSE: MO) Q3 earnings beat by a penny but sales fell short of expectations; shares fell.
• AMR Corp. (NYSE: AMR) reported a Q3 net loss and plunging revenue but also raised $4 billion in cash.
• BB&T Corp. (NYSE: BBT) topped Q3 earnings expectations but said bad-loan provisions nearly doubled.
• Boeing Co. (NYSE: BA) missed estimates and posted a Q3 loss due to delays for a couple of jet products.
• Capital One Financial Corp. (NYSE: COF) shares rose after it reported better-than-expected Q3 numbers.
• Coca-Cola Co. (NYSE: KO) posted a better-than-expected Q3 profit but sales fell short, and shares fell.

Hasbro (NYSE: HAS) isn't doing too well today. Shares of the toy entity are down 3.5% at the time of this writing in early afternoon trading. Third-quarter results are the catalyst, apparently. Management must hate this, because on Friday, rival Mattel (NYSE: MAT) saw a bid after its own earnings release.

Hasbro's top line contracted 2%, and earnings per share, even with some dilution from a joint venture with Discovery Communications (NASDAQ: DISCA) and investments in Hasbro's virtual-studio initiative, increased 11% to 99 cents. Expectations were beat by six pennies. Gee, that was better than Mattel's performance. The maker of Barbie actually saw a per-share earnings decline and came in line with forecasts.