The beauty of the stock market is that it’s often inefficient. If you can find the boo-boos, you’ll create opportunities for market-beating returns. Oversold stocks show up on my radar because they get subject to emotion, and emotion is what creates many inefficiencies. The human heart ends up swaying the stock market, and that creates opportunities for many stocks to buy.

There are 3 high-profile oversold stocks out there right now, and they’ve all been oversold for reasons that (I believe) have little or nothing to do with the underlying story of the company. It’s always the big story we want to keep an eye on — not just the recent news. Just like any good story, there will be obstacles and complications for our hero, but he keeps on trucking until he wins in the end.

That’s the case here. These are short-term obstacles that do not speak to operating or execution issues. That’s why you’ve got a chance to get these oversold stocks while they are cheap.

Here are three of the best oversold stocks to buy.

Oversold Stocks to Buy — Home Depot (HD)

Home Depot (HD) is in the news because of a huge payment card security breach. True, I am dismayed that this mega-corporation doesn’t have the state-of-the-art security systems to protect payment card data, and it doesn’t speak well to that particular division within the company.

But Home Depot is not a data security company; it’s a home improvement company. Were it the former, I’d be worried. Home Depot will have everyone wagging fingers at it, and it will likely cost the company tens of millions of dollars to make everything right. But that has nothing to do with the company’s underlying story.

Home Depot remains the premier home improvement company in the Western Hemisphere. Until the data breach story hit, the stock’s move had been dominated by the stellar earnings report that showed growth of 20%, even after all these years. The stock rocketed from $83.60 to $93.60. I was so impressed with the report that I bought the stock for the first time at $88 on its way up.

Now it’s fallen 5% on news that is irrelevant to the underlying business. I’d buy.

Oversold Stocks to Buy — Whole Foods Market (WFM)

Whole Foods Market (WFM) is another oversold stock to buy. I know the company has had some struggles this year, but the reasons everyone ascribes to these problems are — I believe — inaccurate. The primary concern is competition from The Fresh Market (TFM), Sprouts Farmer’s Market (SFM) and Walmart (WMT), but I debunked those concerns in a previous article.

I think WFM’s struggles are driven by a few things. Yes, consumers sampling the wares of competitors, but they are going to discover that the pricing isn’t that much different, that Whole Foods has far more stores and is therefore more convenient to most, and that WFM pushes its “sustainability” mission harder than anyone else.

I compare WFM’s struggles to those of an overextended Starbucks (SBUX) a few years back. That company stumbled, righted itself, and exploded. I expect the same here. I would open a half position in WFM at these attractive prices. If there is more downside, WFM will be an obvious addition to your list of stocks to buy.

Oversold Stocks to Buy — EZCorp (EZPW)

EZCorp (EZPW) is a stock I’ve both owned and traded many times over the past 10 years. It’s one of the largest pawnshop operators in the U.S. and has a significant presence in Mexico. Payday lending used to be a large part of the business, but it has been substantially reduced or transitioned to installment lending.

A couple of years back, the entire management team was replaced by a bunch of outsiders who had no understanding of the business whatsoever. They proceeded to spend almost $200 million of shareholder money on dubious acquisitions. That spending included $50 million for a domestic internet lending platform that had some $500,000 in receivables. Management paid at least 80 times more than it might have been worth.

The stock fell from $37 at its peak to as low as $9.22. EZPW now sits around $10. That management team has been completely removed and replaced with people for whom consumer lending is a core competency. As some of these acquisitions actually begin to grow and generate revenues, the company is going to bounce back, particularly with a great acquisition in Mexico called Grupo Finmart, which makes direct-to-employee loans.

This is a $20 stock within three years. Throw it on your stocks to buy list and watch it soar.

As of this writing, Lawrence Meyers was long HD, WFM, EZPW, and SBUX. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at pdlcapital66@gmail.com and follow his tweets at @ichabodscranium.