NEW YORK (FORTUNE) - We based this screen on what Benjamin Graham recommends for the "defensive investor" in his 1949 classic, The Intelligent Investor. Among other things, we insisted that each stock's price be no more than 15 times its average earnings per share over the past three years, and that the overall portfolio have a P/E of no higher than 13.

Led by Burlington Resources, our deep-value picks returned 22% last year. The Houston energy giant was purchased by ConocoPhillips (Research) for $35 billion, delivering a 68% gain since last year's story.Pulte Homes (Research) fared less well, falling 23%. Although the homebuilder passed our screen again this year, we're uncomfortable recommending it again. The housing slowdown has been much worse than we anticipated, and we're concerned Pulte isn't adapting quickly enough.

One value stock we like now is UST (Research), the largest U.S. maker and distributor of smokeless tobacco, with 75% of the $3 billion market. Longtime shareholder David Dreman of Dreman Value Management points out that the company dominates the premium segment with its Copenhagen and Skoal brands, each of which generates more than $1 billion in sales. The smokeless category is the only growing segment of the tobacco industry, with sales increasing by 5% a year. The stock trades for 14 times earnings and yields 5.1%.

• Ben Graham, the father of value investing, believed in seeking a "margin of safety" to limit losses when he made a mistake.
• When bottom-fishing, protect yourself by sticking with companies with long histories of consistent profit growth and steady dividend payouts.
• Not every cheap stock will turn out to be a bargain. Sometimes there are very good reasons a stock is trading at a low price.