Betting against the crowd can be a profitable move. The key to success is to identify good businesses that are temporarily out of favour, and avoid bad businesses that are cheap for a reason.

Glencore (LSE: GLEN), Anglo American (LSE: AAL) and Restaurant Group (LSE: RTN) have all been big fallers over the last year. All three have been the subject of intense selling as investors have priced in increasingly gloomy outlooks.

Sentiment now seems to be turning. Shares of Glencore and Anglo American have risen by 58% and 126% respectively so far this year. Restaurant Group has risen by 30% over the last month following bid speculation.

Each company’s problems look fixable to me. The question is whether they are still cheap enough to buy.

Surprisingly robust profits

Glencore has surprised investors over the last six months. Operating profits from the firm’s trading division have remained stable at around $2bn per year, despite the widespread market slump. Although Glencore always claimed that this would be possible, not all investors were convinced.

The second round of surprises came when chief executive and 8.4% shareholder Ivan Glasenberg took action to address investors’ concerns about Glencore’s debts. So far this year, Glencore has entered into asset sale agreements worth $3.2bn, out of a targeted total of $4-5bn for 2016.

Glencore currently trades on 29 times 2017 forecast profits, so isn’t obviously cheap. But I believe profits are likely to rise further over the next few years. For patient buyers, Glencore could still deliver attractive returns.

Better value here?

However, my personal view is that Anglo American could prove to be a more profitable buy. The firm’s turnaround started later than that of Glencore, but is making steady progress. Prices in the group’s key platinum and diamond markets have improved this year. Anglo has already announced $1.5bn of asset sales in 2016.

Anglo’s plan to reduce focus on a handful of its largest and most profitable businesses makes sense to me. This should improve free cash flow generation, which in turn should fund dividends. The challenge for the firm will be to sell its unwanted assets quickly in a difficult market. Progress so far is encouraging, but the firm’s debt levels and lack of dividend are still a risk.

I believe Anglo shares could climb by as much as 50% from here, so I am holding onto my shares.

Did I miss the best buying opportunity?

Shares in Restaurant Group fell as low as 265p in May, before rebounding strongly to their current level of 367p. I’ve been taking a closer look to decide whether it’s still worth buying ahead of a possible takeover bid or turnaround.

My view is that Restaurant’s core franchise, Frankie & Benny’s, has become dated and needs refreshing. However, this shouldn’t be too difficult for a competent management team. Consumers are eating out in greater numbers than ever and Restaurant’s balance sheet is strong, with very little debt.

Earnings forecasts have fallen recently, but on a forecast P/E of 12.5, the shares still don’t look expensive. There’s also a 4.4% dividend yield, which I expect will be maintained. I suspect that any takeover bid would be priced at between 400p and 500p, so buying today could still deliver a worthwhile profit.

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Roland Head owns shares of Anglo American. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.