"Ensco PLC (ESV), a London-based firm which provides offshore drilling services, operates eight ultra-deepwater semi-submersible rigs, as well as 40 premium jackup rigs," notes John Reese.

The editor of Validea explains, "The stock, which has a $7.7 billion market cap, gets strong interest from the models I base on the writings of value investor Benjamin Graham. Indeed, the stock earns a 100% rating under my Ben Graham model.

In Part 1 of this series I discussed starting with a good story and then examining the metrics, or first starting with the metrics via a stock screen and then look at the story behind the numbers.

A third possibility is to start with an idea that springs off the pages of a business journal. Some years ago, in the 25th anniversary edition of Money Magazine they listed a group of stocks that had gone up during this tenure. The one I liked the best that withstood closer scrutiny was Southern Company (SO), the electric utility.

The story and the metrics were great. It was located in one of the most desirable growth areas of the country. There was a favorable business climate, cheap housing, cheap land, good weather and an abundance of labor. The numbers were strong as well.

Here are the next four of my 2011 picks. I am behind schedule, after publishing the first 5 earlier in the week (see: Chasing Value: 2011 Stock Picks -- 5 of 11). This year instead of starting completely anew, I am adjusting my 2010 picks. There is no sense in abandoning good ideas just because the calendar turned a page.

You will actually find support of running themes I have been writing about over the past few months. One of these is the idea of making a contrarian investment in a basket of stocks that have been both scalded and scolded in the headlines. Six stocks were included in such a group that I called the "toxic stocks" (see: Chasing Value: Toxic Stock Update #3 -- BAC, BP, C, GE, GS, RIG).

I have always felt that for all the blabbing we do -- or blogging, in my case -- we should try as best we can to be accountable for our good and bad calls. This report is long overdue, but I will post it anyway since all of my past year's picks and results have been made public.

The market was very harsh in the early part of 2009, filling investors fear and trepidation, and sinking to a March 9, 2009 bottom. Perhaps some of the bleeding has stopped, but the economy has not healed as bears and bulls seem to carry the day, or every other day.

It has been a long time since I have suggested investors dabble in tech stocks, unless, like me, you consider Intuitive Surgical (ISRG) a tech stock. Today, that changes as I direct your attention to the rapidly growing small cap stock Ebix (EBIX), a software company that specializes in the needs of the insurance industry.

This Atlanta, GA-based company is up 113.30% in the last year, 450.72% over three years, and an incredible 1,092.74% in five years through March 2010.

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.

During my tenure at BloggingStocks I have expressed my opinion often about the contribution that dividends make to your overall return. Most shrewd investors, and especially "my pal Warren," know this and understand why I re-emphasize the point when I make my annual selections.

By now I hope you have had a chance to peruse my picks for 2010. If not the links below will give you another opportunity.

For the first time my annual picks will include a stock option. I have written numerous blogs this year about something called "naked puts" -- that is a sell to open put position -- committing me to buy a certain number of shares by a certain date if the closing price is less than the strike price.

In this case I have selected the E*TRADE (ETFC) January 2011, $2.50 puts last traded on December 28, 2009 at $0.97 for a 39% return. If it expires, as I am betting it will, by the third Friday of that month I have no further obligation.

This type of option transaction is not available to most investors. It is marginable, but you pay no interest.

To arrive at this years ten picks I scoured business journals and editorials, online and off. I also ran through a series of stock screens repeatedly over the last few months filtering for five primary value metrics identifying stocks worthy of further consideration.

The 5 data points were price-to-sales (P/S), price-to-book (P/B), price-to-cash flow (P/CF), dividend yield and return-on-equity (ROE). I did look at other things but these were the subject of my initial focus.

"Vacationers and professionals finally appear to be hitting the road, and many are relying on Expedia (NASDAQ: EXPE) to handle the details," says Nathan Slaughter in Half-Priced Stocks.

The value investor explains, "Expedia's travel sites processed 15.3 million transactions during the second quarter, 18% above the same period last year. Howevver, the gross dollar amount of those bookings dipped slightly to $5.6 billion/

"Whenever you have more trips bringing in less money, it's a pretty good indication that prices are way down.

"We're looking for profits in a sector of the economy that almost everyone has written off -- newspapers," says Glenn Rogers.

In Internet Wealth Builder, he explains, "I have been involved in the newspaper industry for good portion of my career; so it has been with great dismay that I've watched the industry crumble over the last few years." For contrary investors, he looks to New York Times (NYSE: NYT) and Gannett (NYSE: GCI).

"The Internet in general has siphoned off millions of dollars of advertising that used to belong to the newspaper industry.

Some of you may have heard this before if you have been in the stock market for a long time: The cheapest place to find oil is on the floor of the New York Stock exchange!

With the price of oil moving up faster than the price of oil stocks, and the high cost of exploration and developing new sources, I have been surprised that there have not been any mergers or acquisitions by the major oil companies. I would think now would be a good time to add to their proven reserves with far less risk than looking for new sources.

It also seems to me that the risks associated with exploration and developing new product would be easier to absorb by larger entities.

This has been a good year for many stock pickers and my Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more is beating the market to date. The formal review will be published after the second quarter.

Among the stocks that have been doing surprisingly poorly, of the nine, is EZCORP (NASDAQ: EZPW) that owns and operates a chain of pawn shops and cash advance outlets.

Today it is trading significantly lower, from yesterday's close of $12.89, off about 14.5%, bouncing around the $11.00 mark. The stock is down on company news that earnings for the next two quarters and the full year would be down a few cents per share below analysts estimates and earlier company forecasts.

"Hudson City Bancorp (NASDAQ: HCBK) is a fortress of safety with plenty of upside potential," says value investor Nathan Slaughter.

In his Half-Priced Stocks, he explains, "The 140-year old bank is a classic example of the tortoise and hare fable. Its slower, measured approach has paid off handsomely and keptit at arms length from the problems plaguing other banks."

"Hudson City manages a network of 130 bank branches spread throughout affluent regions of New Jersey, New York and Connecticut. At last count, the firm had over $20 billion in deposits and approximately $56 billion in total assets.

"According to an independent study, this tight-knit institution has been rated one of the nation's three strictest mortgage underwriters. So when most other banks relaxed their standards in recent years to attract riskier clientele, Hudson City stuck to its conservative roots and refused to budge.

This is a follow-up on the short term results comparing the Williams Companies Inc. (NYSE: WMB) to Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG) , Microsoft Corp. (NASDAQ: MSFT), and Berkshire Hathaway Inc. (NYSE: BRK.B).

I wrote a series of stories about why I thought WMB would outperform the other more popular stocks and two weeks is not much of a test unless you have been trading on my suggestions instead of investing.

The final post was Serious Money: Better than Apple, Google, Microsoft & Berkshire Hathaway, Part 5 if anyone cares to go back and review that.