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.

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.

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.

Many investors know that market corrections provide Buy opportunities, and when you get a pull-back in an undervalued stock, that's a double-bargain. Hewlett-Packard (HPQ) is one, and that's a major reason I'm reiterating my buy rating for the company's shares, first recommended on April 24, 2009 at a price of $35.80.

Hewlett is well-positioned to increase market share in PCs, servers, printers, and IT services in 2010. The company's cost reduction efforts have gone reasonably well, and it's made progress re-positioning its customer services operation to become the one-stop shop that many customers seek. Meanwhile, the integration of Electronic Data Services, acquired for about $13 billion, should go reasonably well.

International Business Machines (IBM) nailed another quarter. Going into the report, it was difficult to believe that Big Blue's fundamentals were going to suddenly collapse. Although they didn't, yesterday's after-hours crowd wasn't kind to the company's shares, which slid by almost 2%.

Who cares? The stats from the Q4 release should dissuade anyone from feeling bearish. Earnings per share increased 10% to $3.59. Expectations were for $3.47 per share, so congratulations are in order for another solid beat. Furthermore, gross margin experienced a nice expansion.

I am looking forward to International Business Machine's (IBM) Q4 earnings report, which is scheduled to be released after the close of today's session. No, I don't have a trade going on with the shares, but I have a feeling the numbers are going to be pretty good for Big Blue. When I covered the company's Q3 data back in October, I found myself impressed. I firmly believe the fundamental strength is set to continue.

According to Earnings.com, IBM, whose colleagues include Hewlett-Packard (HPQ) and Microsoft (MSFT), is expected to deliver around $3.47 per share for the bottom line. Last year at this time, the company made $3.28 per share. So, investors might see an increase of around 6% in the metric.

For a company that hasn't even admitted to a new product, expectations are awfully high. The word is out that Apple (AAPL) will be unveiling a tablet computer at a major product launch this month.

Former Google (GOOG) exec Lee Kai-fu put out on his blog that he knows its coming, citing an anonymous source, and that the device would sell for less than $1,000. It's going to have a 10.1-inch screen and three-dimensional graphics, he continued, according to a Bloomberg News report, saying it would look like a large iPhone.

What is Hewlett-Packard (HPQ) up to? Is it, like Apple (AAPL), trying to bring a digital wireless tablet pad computer to market? That's what it seems like from its recent trademark applications. Dig this marketing line: This is my Zeen. It is the key to my Airlife. Oh brother. This is what Harvard marketing MBAs produce? Maybe Gilette would be interested in the name for a new razor. But a gadget?

Taking note of HP's recent trademark applications, one would think it is going to have a wireless gadget of some sort available for sale in the near future. The term "airlife" reeks of constant wireless access, probably using a partner like AT&T (T) or Verizon Wireless.

TheStreet.com's Jim Cramer says Pepsi, McDonald's and Intel are set to bounce back with a bang.

You can always tell a benign market by the comeback the doghouse names manage to give you.

Consider the errant cases of Pepsi (PEP) (Cramer's Take), McDonald's (MCD) (Cramer's Take) and Intel (INTC) (Cramer's Take). All three allegedly "disappointed," with Pepsi failing to please on the alleged guide-down after its bottling purchase, McDonald's stuttering on a bad month and Intel on a so-called failed quarter.

Apple (AAPL) got an early Christmas present, as its shares hit an all-time high on Thursday. The excitement over its much-anticipated tablet computer is growing, and word is a major launch event is planned for the device in January (keep an eye on San Francisco). Apple still hasn't admitted to the project, but that didn't manage to dampen speculation.

Yair Reiner of Oppenheimer said in a note to investors this month that Apple could have a tablet out on the streets by the beginning of April. Brian Marshall, an analyst at Broadpoint AmTech, sees the product reaching shelves by the end of the first quarter. Marshall sees the stock continuing to push upward next year, as "people are coming back to the well."

Acer Inc. of Taiwan has Hewlett-Packard (HPQ) of the U.S. in its sights to become the world's largest manufacturer of PCs. To do that will be no easy matter, as HP's rampage in sales in the past 24 months has put it way ahead of former number two Dell (DELL) and, for the first time, made it a $100 billion company (annual sales). But Acer has not tread lightly either, gobbling up the Gateway and Packard Bell brands.

Where can Acer work on its plans for global domination? China, of course. The company will increase sales training and work on upping its retail network in China by 30% as it chases the fastest-growing PC market in the world. So far, Acer's mindshare in China is in fifth place due to its inability to be recognized for the global PC behemoth it is. Acer intends to change that in China.

Stock markets go through many different cycles. In each one, there are one or two elements that make a successful investment. For example, interest rates are always a concern for financial institutions or companies that borrow a large amount of money. For these groups, the higher interest rates go, the lower profits will most likely be unless they are able to raise prices and/or cut costs faster than interest rates rise.

Right now, the main focus for most investors should be revenues. That's because without increasing revenues, there is an absolute amount of profits that any company can achieve. Simply by cutting costs, a company can increase profits, up to a point. But eventually lowering expenses isn't enough because there are only so many costs that can be cut before a product or service begins to weaken and affect sales.

Hewlett-Packard (HPQ), the famous maker of printers and PCs, and a colleague of entities such as Microsoft (MSFT), Dell (DELL), and International Business Machines (IBM), issued Q4 results on Monday after the end of the trading day. Revenues didn't impress me, as sales saw a decline of 8%. Net income, however, was better. On an adjusted basis, earnings per share increased 11% to $1.14.

Also doing well was the operating margin. The adjusted metric increased 170 basis points during the quarter. The annual statement of cash flows should look good to any long-term shareholder. Management still had cash left over from operations after share repurchases, dividend obligations, and capital spending.

U.S. stock futures were mixed Tuesday morning, trading in a tight range after snapping a three-day losing streak Monday with a strong rally. This morning, investors await a slew of economic reports as they digest recent tech earnings and more bank news.

Stronger-than-expected home sales data, as well as rising commodity prices and a weak dollar, helped fuel markets Monday, which closed at least 1.3% higher.

Though the earnings season is winding down, and the coming week includes the Thanksgiving holiday in the U.S., plenty of reports are still due out. And analysts surveyed by Thomson Reuters don't seem to be expecting too many turkeys among this week's bunch.

Leading U.S. meat processor Tyson Foods Inc. (TSN), which has just named a new chief executive officer and a new chief operating officer, is expected to report fiscal fourth-quarter earnings of $0.26 per share, up from $0.14 in the same period of last year. But revenue is expected to total $6.9 billion, or 4.3% less than a year ago. The full-year forecast is for a profit of $0.25 per share (-16.7) on $26.4 billion (-3.9%) in sales. This dividend payer has offered upside surprises in the past two quarters, topping estimates by 11 cents per share in the third quarter.