Joel Greenblatt of Gotham Asset Management literally wrote the book on value investing.

He founded Gotham Capital in 1985 with $7 million and now manages more than $1 billion using a proprietary strategy to find value.

He’s also the best-selling author of The Little Book That Beats The Market -and co-founder of Formula Investing Funds - a family of mutual funds that allows retail investors to access his value investing strategies.

In an interview on CNBC’s Fast Money Halftime Report, Greenblatt says the secret to his success is simple. He ‘figures out what something is worth and then pays a lot less.’

To do that, Greenblatt identifies companies that have high free cash flows as well as high returns on capital but aren't commanding fair value. “If you’re good at figuring out what a company is worth the market will agree with you,” he says, it’s just a matter of when.

And on Halftime Greenblatt reveals 5 stocks that he thinks are undervalued right now.

Technology
- Apple 
- Hewlett-Packard
- Microsoft 
Source: Joel Greenblatt, Gotham Asset Management

Retail
- Kohl’s 
- Best Buy
Source: Joel Greenblatt, Gotham Asset Management

Greenblatt concedes that some of the companies mentioned above are facing headwinds but in these cases, he likes that. He believes that companies that fit his criteria and that also have low expectations are attractive because most of the negative are priced in and a small positive can generate gains.

“If you put together a diversified portfolio of companies that are out of favor and they’re high free cash flow generating, and in good businesses – that’s very powerful over time.”