I have not much experience with these situations, but I think experiences may differ here, as different arguments can be made.
If market is giving a low multiple, there must have been some reasons for that, so going for a low hanging fruit, so to speak, we are essentially taking a chance. This chance may very well turn out to be a success, if rerating happens. There have been such success stories like these here in VP.
Also, if it does not work, then we are stuck with a non-performing stock, which can still go down some more. We may lose patience, we may even revisit our thesis, may be even think we made a mistake and exit.
Perhaps, sometimes, when companies with stable sales, strong cash flows, dividends too, go down with the broader markets, so maybe then we can act then.
I have a position in Coal India, bought more than 2 years ago. I did not buy it for growth at the time, I bought it for the dividends, the price appreciation was unexpected. I bought after reading an article which explained about the business, and concluded why the market price at that time is a good price to buy. I bought and added to my position as it went up.
I was interested in buying Mirza a few years ago, purely from valuation perspective, compared with Bata or even Relaxo. I don’t remember all the details, I must have bought and sold quickly.
Even investors with deep understanding of the business may be proven as wrong sometimes, but then again, bargains also can be profitable.
So I think, each such case is different, and maybe a bit of luck is also involved.