Bargain-Hunting During the Correction

Based on the title, you might assume that I'm not among the camp convinced that the current market downturn means we're headed for another crash. You'd be right.

In fact, I think a lot of it has to do with a much sillier reason -- market technicians getting thrown off by the wacky May 6 "flash crash." It's not that I believe in any of that hocus-pocus myself, but at some point, you have to factor in many others' belief in it. Gather a big enough group that believes something like that, and you've got a recipe for self-fulfilling prophecy.

But the wild volatility that charting craziness creates may be creating opportunities for longer-term investors. Here are three stocks that I think are worth putting on your radar right now.

Freeport McMoRan (NYSE: FCX  )
It can be a little tricky to figure out whether a commodity producer like Freeport is actually a bargain. After all, the company's results are highly dependent on the prices it gets for its trio of metals -- copper, gold, and molybdenum.

So what do we do? Well, we can cheat a little by taking the company's historical performance into account. This can give us a general picture of how efficiently the company conducts business through a variety of economic and pricing environments.

With the exception of 2008 -- which showed big losses from non-cash asset and goodwill impairment -- Freeport's history comes up aces. The company has a solid history of producing very attractive returns on its assets.

So why Freeport, instead of other metals and mining companies? Well, that goes back to the "bargain" part of our search. Fellow copper giant Southern Copper (NYSE: SCCO  ) could also be a good pick, but its forward P/E of 11.3 looks pricey next to Freeport's 8.1.

Atwood Oceanics (NYSE: ATW  )
There are a few things at play when it comes to Atwood's bargain price. The most glaring is the negative sentiment around the offshore drillers in general, thanks to the disaster in the Gulf of Mexico. An exploding Transocean (NYSE: RIG  ) rig kicked off that incident, but while Transocean's stock has taken quite a beating, it has also dragged many of the other drillers -- including Atwood -- with it.

Much of the fallout from the Gulf spill will likely take place in the U.S. But where is Atwood? Well, its Atwood Eagle rig is in Australia, doing work for Chevron (NYSE: CVX  ) . The Atwood Hunter is in Ghana, drilling for Kosmos Energy. And the Atwood Falcon is in the Philippines, under a contract with Shell. The rest of Atwood's rigs continue that global focus. Atwood's Richmond drill is the only one currently working the U.S., and that's not even a deepwater drill.

Additionally, with oil prices well off their highs for the year, and the ongoing situation in Europe feeding economic pessimism, investors are also worried about whether Atwood will be able to find new takers for the drills going off-contract in the coming months.

The results that Atwood has delivered since 2006 have markedly surpassed the company's historical results. That said, Atwood has historically proved a good operator delivering attractive results. The stock's trailing and forward earnings multiples -- at 7 and 6.4, respectively -- should give investors plenty of cushion.

Goldman Sachs (NYSE: GS  )
Let me be clear: I hate both of the things I'm about to say. First, as the always-frenetic Jim Cramer says, "I'm not about making friends, I'm about making you money." Second, it looks like there's money to be made on Goldman Sachs.

Goldman has been beaten down on a number of fronts: fear over financials in general, fear over the lawsuits that have rained down on the company, and fear of the financial reform package. In the end, I just don't think that the outcome of any of those will justify the level of concern now priced into Goldman's stock. The SEC's case against Goldman seems pretty weak, the financial reform package has only a few blunt teeth (and that's before the final Congressional dental work to come), and it appears that for the most part, the financial industry will continue doing what it does best -- make money for itself.

That last part -- making money for itself -- is very important,  and it makes me still reluctant to be a long-term Goldman shareholder. However, with Goldman's stock now trading at just above its book value -- versus a pre-crisis historical range of 1.6 to 5.9 -- I can't help but think there's money to be made.

Morgan Stanley (NYSE: MS  ) is actually a bit cheaper and may be worth a look, but Goldman is simply a better company.

Think these stocks are a good way to go? Are there other stocks on your radar right now? Head down to the comments section and share your thoughts.

My fellow Fool Anand Chokkavelu thinks that there may be a company that's an even better investment than Goldman Sachs. Find out what it is.