When I look through my portfolio the most common theme I see is that the companies I own have issues. There is not a clean story in my portfolio. Vodafone offers a double digit free cash flow yield but has some problem spots. They have exposure to Southern Europe but that is a small part of their business. They also have a 45% ownership stake in Verizon Wireless among other assets around the world. But the entire company trades like its a pure play on Spain.
I believe the reason companies with issues trade at ridiculous valuations is due to the dominant investors, hedge funds. There is so much pressure to perform in the short term that nobody wants to look past any issues regardless of valuation. If a position goes against them they "manage risk", which is the same as taking a stop loss. This makes cheap stocks get even cheaper.
I believe this creates opportunity for those who are patient and willing to endure some pain. I have been enduring my fair share of pain recently as companies I believe are dirt cheap have become cheaper. In the end I expect I will be rewarded.