According to the old stock market adage, "sell in May and go away". Sound advice this year: Gulf stocks were down 10 per cent from May Day to the end of Ramadan. Taqa, Air Arabia and Mobily look especially cheap after the sell-off.
Taqa
Abu Dhabi National Energy Company, to give it its full name, has had a tough time. After spending three years and billions of dollars building a global energy empire, Peter Barker-Homek, the chief executive, left in 2009 and promptly sued the company.
Today, under a new general manager and finance chief, consolidation and stability are the watchwords.
In simple terms, Taqa has two very different faces: the stuffy power and water business, mainly in the UAE and Middle East, and the more racy oil and gas operations in Europe and North America. Both are doing nicely, with second-quarter profit more than doubling to Dh435 million (US$118.4m). The days of frenzied acquisition may be gone, but it's still investing heavily in organic growth to the tune of some Dh7 billion a year. As a result, Bloomberg News data predicts a steady increase in profit as this investment bears fruit.
Today, investors can buy all this at a steep discount. The price-to-earnings ratio is about 7, with a nice dividend yield of 8 per cent to sweeten the deal. Shuaa Capital has a buy recommendation on the stock, while Standard & Poor's gives it an "A" credit rating.
Why so cheap? Investors are worried about debt, which is massive at more than Dh70bn; Taqa's oil and gas business is to some extent at the mercy of the crude market; and Dutch conservationists are trying to derail a new gas project. All valid concerns. But at the knock-down price of Dh1.20, the bad news is more than priced in.
Air Arabia
Investors have punished the low-cost airline this year, with the stock falling 22 per cent so far.
Why so downbeat? Two reasons: oil and the Arab Spring. With crude averaging US$100 a barrel, profit is falling, while uprisings in North Africa made the company's regional diversification seem more like a weakness than a strength. Air Arabia has its main hub in its native Sharjah, with sub-hubs in Morocco and Egypt.
In June, Adel Ali, its chief executive, mothballed plans for a fourth hub in Jordan.
Crucially, though, Air Arabia's fundamentals remain strong. The industry is forever facing some crisis or another: economic, political or natural. The weak fail, the strong survive, and Air Arabia is the latter.
Most important, it's still making money. Not as much - net income has fallen each year since 2007 - but still in the black.
And it's growing. The number of passengers climbed in the second quarter of this year, when Air Arabia flew its 20 millionth traveller. The company has orders with Airbus that should more or less double the fleet.
It needs them because the planes are full, with a seat load factor of 83 per cent - high by industry standards. The board sensibly cut the dividend this year, but it is still yielding a remarkable 13 per cent.
We must not take these achievements for granted. Launching and maintaining a profitable airline is a tough nut to crack. Witness the failure in recent years of Sama in Saudi Arabia, Wataniya in Kuwait and the stop-start history of RAK Airways.
Air Arabia has a strong brand, strong managers, a strong balance sheet and a strong business model. Moreover, it has loyal customers. Many shareholders are not so loyal, hence a price-to-earnings ratio just below 10 at 63 fils a share. Drink it while it's fizzy.
Mobily
The UAE has two worthy phone companies in Etisalat and du, but Mobily in Saudi Arabia looks better value right now.
There's a bit of an irony here. Etisalat launched Mobily and owns almost a third of it. But in practice, Mobily has much more in common with du, in that they are both fast-growing upstart challengers to a former state monopoly.
So let's compare and contrast Mobily and du. According to analysts at NBK Capital, who crunched the numbers based on this year's forecast profit, Mobily has a price-to-earnings ratio of 6.5. For du, it is 18. That's not to say du is a bad company - far from it. But du shares have rallied over the past year, while Mobily has been flat.
Then there's the dividend. Du doesn't pay its shareholders yet. But the Mobily board raised its dividend this summer, committing to hand over close to half the firm's annual profit going forward.
Analysts at JPMorgan equate that to a dividend yield of about 6 per cent this year.
Don't take my word for it. Of 19 analysts covering Mobily, none have sell recommendations. None have a hold. Each and every one of them recommends buying Mobily.
Richard Dean hosts Tonight on Dubai Eye 103.8 FM and is the author of Sink or Swim? How to Stay Afloat in Tough Economic Times: Business Lessons from the UAE. He does not own any of the shares mentioned in this article.