Among the loser stocks plumbing 52-week lows, Martha Stewart Living Omnimedia stands out as a bargain that could double and then some, writes Michael Brush of MSN Money.

Domestic diva, CEO, TV host, magazine icon, prisoner number 55170-054—Martha Stewart sports a résumé that's more variegated than the colors that pop up in the flower beds of her Bedford, N.Y., estate.

Now approaching 70, Stewart—once nicknamed "M. Diddy" by fellow inmates, and known to millions of fans simply as Martha—is still reinventing herself. Yet her latest career moves have confounded many fans, while critics and investors see signs in the latest round of makeovers that Stewart and her company, Martha Stewart Living Omnimedia (MSO) should be put out to compost.

Given all that Stewart has survived, though, these skeptics shouldn't count her out just yet. Stewart and her company have really just been working through important transitions—ones that should bring you a double or more in the stock if you buy shares now.

Before I bring you the good news, let's first take a look at what critics say is wrong with Stewart and her company.

First, she moved her "Martha Stewart Show" last year from a major network, NBC, to the less popular and much stodgier Hallmark Channel. This is a sign she's old-fashioned and unable to connect with a younger generation, according to naysayers.

Stewart also ended her pact with Kmart last year after pairing with Home Depot (HD), which seems an unlikely partnership, say skeptics. After all, do home repair buffs think "Martha Stewart" when they're shopping for two-by-fours?

If you glance at the surface trends in sales and earnings, things do appear grim. MSO sales and earnings declined again in the fourth quarter. Sales were down last year and are well off 2007 highs. In reaction, her company's shares, at around $3.75, are near their 52-week low.

But because the 52-week low list can be a great shopping list for contrarian investors like myself, I recently decided to grab a trowel and do some digging.

Here is the key takeaway: Trading for the modest $177 million enterprise value the market puts on Stewart's media empire once net cash is subtracted, her company and brand are going for much less than they would be worth in a buyout. That tells me there's limited downside for anyone who buys the stock now.

On the other hand, the upside potential is huge, and recent moves are likely to pay off big time.

Noble Financial Capital Markets media and entertainment analyst Michael Kupinski thinks the assets inside Martha Stewart's company—the magazines, the brand, the Web sites, and the earnings potential in putting her name on retail goods—together are worth $12 a share. He has a $10 price target on her stock.

As for the move from NBC to Hallmark, it’s a sweet deal likely to make Stewart's broadcasting division profitable—not bad for what some might describe as a marketing effort for her merchandising.

Which matters, because Martha Stewart Living Omnimedia is turning into a merchandising machine.

NEXT: So Long, Kmart

Tickers Mentioned: Tickers: MSO, HD, M, SHLD, AAPL