Just as we examine companies each week that may be rising past their fair value, we can also find companies potentially trading at bargain prices. While many investors would rather have nothing to do with companies tipping the scales at 52-week lows, I think it makes a lot of sense to determine whether the market has overreacted to the downside, just as we often do when the market reacts to the upside.

Here's a look at three fallen angels trading near their 52-week lows that could be worth buying.

You can't kill a zombie
You can't fall in love with a stock, but you also can't allow yourself to hate a company forever, either. I've been a staunch pessimist on Advanced Micro Devices (AMD 0.69%) forever. I honestly can't recall one time in my 14 years of investing that I thought even halfway nicely about AMD -- but that all changes today.

As my Foolish colleague Anders Bylund opined last week, he feels AMD is a zombie stock that's headed to zero. I can 100% understand his point of view, but I'm going to humbly disagree and mark this as the beginning of the long-term AMD turnaround story.

For one, AMD is finally going to address its costs through layoffs and other operating efficiency improvements, which should hopefully help to normalize its highly cyclical expense structure. While I do worry about whether or not AMD will be able to bring new products to market, I feel the cost savings are a necessary evil to turning AMD's business around. There's also a good chance that at a market value of just $1.56 billion, either a public or private firm would undoubtedly take interest in the company.

As Anders stated, the microprocessor war has definitely been won by Intel (INTC -1.79%), but I think this was a forgone conclusion from the start. If AMD focuses on emerging market growth and tablets, while removing some of its reliance on notebooks, it could easily be back on its feet in no time.

Lasers, photonics, and optics, oh my!
It definitely hasn't been a year to remember for photonic technology and optical components supplier Newport (NASDAQ: NEWP), which has been crushed by a weakening global economy, worries about government funding, and increased competition from IPG Photonics (IPGP 0.26%), whose laser products have taken the sector by storm. Still, plenty of positives exist that could make Newport a company to watch moving forward.

Newport has done a very good job reining in costs in anticipation of a government funding cutback and has utilized its efficiencies to boost its cash flow and begin paying down its debt. Between 2004 and 2009, Newport generated between $2 million and $26 million in positive cash flow, according to Morningstar. That changed over the past two years, with Newport recording $62 million and $55 million in positive free cash flow in 2010 and 2011.

With improved margins and considerably better cash flow, there's reason to believe that when the next cyclical downturn strikes, Newport may be able to remain profitable. Specifically, I would look for strength in the health and life sciences division to drive growth over the coming years as research and development technologies become cheaper for biotechnology companies. At just nine times forward earnings I consider Newport a steal at these levels.

Casting a spell
This is the week of letting bygones be bygones, and it's only befitting that I end it by reversing an underperform call to an outperform call on Activision Blizzard (NASDAQ: ATVI).

About a year ago I correctly predicted that the maker of World of Warcraft was trading at a pricey valuation relative to its peers and looked vulnerable given a rapid dropoff in video game sales. One year later, much of the sector is still struggling to find its footing, with research and development costs soaring and console sales stagnant at best. Activision, however, has been vigorously moving its efforts online, which is being reflected in noticeable margin expansion and a healthy cash balance.

Activision has improved its gross margins in each year since 2008, from 39.2% to 63.1% in 2011 through prudent fiscal management, and a focus on digitizing content (which has considerably higher margins and fewer associated costs). It hasn't been all fun and games, with Activision announcing 600 layoffs earlier this year, but its focus on online content should help diversify the company solely away from console sales, assuming it can keep churning out premium titles. At just 10 times next year's earnings, and with the prospect of higher dividends potentially on the horizon, it's worth a shot here.

Foolish roundup
This week we once again rounded up more values in the tech sector. All three companies share a penchant for cost-cutting and aren't willing to sit on their laurels while their peers pass them by. This week is a true case of buying when everyone is fearful.

I'm so confident that these three names will bounce off their lows that I'm going to make a CAPScall of outperform on each one.

With AMD effectively out of the way, can anything stand in Intel's way? Find out by getting your copy of our latest premium research report on Intel. Packed with in-depth and unbiased analysis on the opportunities and threats facing AMD -- and complete with a year of regular updates -- this report will give you the tools needed to make smart long-term decisions. Click here to get your copy.