September and October sure have been kind to investors, with the major indices up more than +10% and some individual stocks up +30% to 40% since late August.

Back then, it was easy to spot bargains after a summer swoon. Nowadays, it’s getting harder to find stocks that represent a true bargain, so you’ll have to dig deeper. That’s why it pays to look at the stocks that have missed out on this rally.

I went looking for stocks that trade for less than half of their 52-week high. I call them the “half-off” crowd. Let’s go shopping.

I recently profiled Office Depot (NYSE: ODP), which is starting to look like a nice turnaround play. [Read my take here]

Office Depot has been beaten to a pulp by rival Staples (Nasdaq: SPLS) for more than a decade, but management now appears to understand how to more effectively compete by improving the merchandising mix, cutting unnecessary overhead and conducting more targeted and effective marketing. Those efforts are not yet hitting the income statement, but should in the coming quarters. Investors will hear about management’s latest efforts when the retailer delivers quarterly results next Wednesday, October 27.

I also remain quite bullish on DG FastChannel (Nasdaq: DGIT), which looks very oversold, as I noted recently. Shares have rebounded +20% to $20 since then, but I still think $30 is a realistic target price as investors realize that the company’s business model is dented, but not broken. That’s +50% upside from here.

It takes time for businesses to regain momentum, but all the pieces are in place. DG FastChannel has a vast and hard-to-steal customer base, more than $200 million invested in its technology platform, and is still well-positioned to capitalize on the changing broadcast media landscape.

Cenveo (NYSE: CVO)
This is a good company in a bad industry — printing. The company offers a full range of commercial printing services, including envelopes, labels and business documents, and has developed a comprehensive suite of services and products. But the still-weak economy has led to a slowdown in demand across the industry, with several players being forced into bankruptcy. Despite a hefty $1.3 billion debt load, Cenveo is still generating strong cash flow. As the economy picks up, free cash flow should rebound north of the $100 million mark, where it stood in 2008. The company’s market cap value of just $337 million severely discounts that cash flow potential, due to that high debt load. As the economy rebounds and any debt concerns recede, the company should trade up to at least six or seven times that $100 million free cash flow target, implying a potential double — or more — from current levels.

Alvarion (Nasdaq: ALVR)
This company sells telecom network equipment that provides superfast data transmission speeds known as 4G. Telecom operators around the world have started to heavily invest in network upgrades, and Alvarion has secured an impressive slate of contracts. But the company was hard-pressed to make profits from those sales.

Impatient investors grew tired of waiting for profits and shares have fallen from $14 to $2 since late 2007. At this point, the company’s market value of $133 million is not far above Alvarion’s net cash holdings of $91 million. But all is not lost. Recent contract wins in India and Canada should help sales rise +10% next year and help the company move back into profitability. Shares tend to trade on contract announcements, and with shares likely at a bottom, any new announcements could yield quick gains.

Action to Take –> These stocks are selling at a steep discount to recent highs thanks to their own missteps. Yet each has a considerable track record, and their problems are fixable. Track their comments on the upcoming slate of conference calls for signs of progress. These are the kinds of stocks to buy when improvements have begun. By the time those improvements have fully taken hold, shares will no longer be so cheap.

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