For stocks, popularity carries a price. Among S&P 500 companies, those with average analyst recommendations of buy carry stock market values that are a median of 1.6 times their trailing 12-month sales. Companies rated hold or sell trade at a median of 1.1 times sales.

The trade-off for investors seems lopsided, however. Long-term studies convincingly show that stocks with low price/sales ratios tend to produce better performance than those with high ones. The correlation between analyst advice and stock performance isn't as clear. In most studies, buy-recommended stocks do no better than hold-recommended ones after adjusting for other variables like valuation. That suggests investors should ignore analysts shopping lists and search for their own bargains.

As I noted Friday, the broad stock market seems worrisomely expensive at the moment. That makes now a fine time to prefer companies with modest expectations built into their share prices.

The three companies below are rated hold or worse (1 = Strong Buy, 5 = Sell) by analysts, but have strong balance sheets, below-average price/earnings ratios and larger-than-average dividend yields. Sales for each are holding up nicely through this year s spending downturn.

Weis Markets

Average Recommendation: 4
Number of Analysts: 1

Tiny grocer Weis Markets (WMK) has just 154 stores in five mid-Atlantic states. Kroger (KR), for comparison, has more than 2,800. The conservative growth strategy has left Weis debt-free and prosperous. During the company s second quarter, sales at its longstanding stores increased 2.4% vs. a year earlier while companywide earnings rose 19%. For the year, earnings are projected to jump 34%. Shares sell for 14 times forecast 2009 earnings and yield 3.6%.

Hasbro

Average Recommendation: 2.5
Number of Analysts: 13

Wall Street is down on toymakers in general, which isn t surprising; demand for action figures, toy trucks, outdoor sports staples and more has stalled in recent years while sales of videogames have soared. Suddenly, though, videogames are having a lousy summer, and Hasbro (HAS) has two hits on the shelves. Transformers and G.I. Joe figures are hot, thanks to film tie-ins for both this summer. Earnings for the company are projected to grow by just 5% this year, but second-quarter earnings beat expectations. Shares are 13 times earnings and yield 3%.

ConAgra Foods

Average Recommendation: 2.7
Number of Analysts: 9

Founded 90 years ago as a Nebraska grain mill, ConAgra in recent decades has bought its way into packaged foods: Banquet frozen meals, Hunts sauces, Pam cooking spray and Hebrew National franks to name a few brands. Its shares are cheaper than those of most of its pantry peers. At 12 times earnings, ConAgra trades at about a 20% discount to both Kraft (KFT) and Kellogg (K) . Shares yield 3.9% and while the company isn t a fast grower, in its fiscal year ending May 2010 it s expected to turn a tiny sales increase into a 9% profit gain.