Image source: Getty Images.

The stock market got off to a bumpy start in 2016, but through Oct. 10 the broad-based S&P 500 sits higher by nearly 6%. This performance is validation to investors that the buy-and-hold mentality does work.

However, some investors are having their patience tested in a big way. A quick screen of all publicly traded companies with market valuations north of $300 million that are down more than 50% year-to-date and expected to be profitable in 2017 yielded 18 stocks.

Some, as you might imagine, deserve the pessimism they've endured. For instance, shares of Valeant Pharmaceuticals are down 77% year-to-date on account of its crippling debt issues and ongoing pricing pressure concerns. Even though Valeant is expected to be profitable next year, it's far from out of the woods.

On the other hand, a couple companies that are down in excess of 50% and expected to be healthfully profitable next year could be steals. Here are a few that you may want to consider taking a closer look into.

Image source: Getty Images.

SunPower Corporation

It's been a miserable year for solar panel producer SunPower (SPWR -55.01%), with shares dimming 71% year-to-date.

SunPower's woes can be traced to two factors. First, crude oil prices have fallen significantly from their highs, which has reduced the demand and urgency for alternative energy projects. Secondly, financing issues have plagued the solar industry. With SunPower lugging around more than $2.2 billion in debt (a 155% debt-to-equity), there's clear concern that future financing and/or financial flexibility could be a concern.

However, as my Foolish colleague and solar industry expert Travis Hoium pointed out last month, about a third of SunPower's debt is directly tied to a little more than a half-dozen ongoing projects that it's looking to offload. Selling these projects could not only reduce its debt load to less than $1.5 billion, but may also bolster the $590 million in cash the company ended the prior quarter with. Over the coming 12-to-18 months we could witness a major transformation that halves SunPower's debt-to-equity and greatly improves its financial flexibility.

Over the long-term, SunPower should witness steady growth in solar demand as fossil fuel prices increase and developed countries push for lower carbon emissions. We could also see solar demand benefit as a result of alternative energy project incentives. Earlier this year, the International Renewable Energy Agency released a report called Letting in the Light that projected that photovoltaic capacity could grow from 227 GW in early 2016 to between 1,760 and 2,500 GW by 2030 to meet an estimated 50% increase in electricity demand. If these numbers hold true, SunPower should have no trouble growing its top- and bottom-line.

Valued at just 15 times next year's projected profits and only 91% of its book value, SunPower could be a shining star in an otherwise dismal industry.

Image source: Getty Images.

Pacira Pharmaceuticals, Inc.

Next, we have one of the fastest-growing profitable companies in the biotech industry, Pacira Pharmaceuticals (PCRX -4.20%). Shares of Pacira have tumbled a whopping 53% year-to-date.

What's the issue, you wonder? Part of the blame goes to the risk-off trade in January and February, which sent biotech stocks to the woodshed. However, the bigger concern has been slowing sales of the company's lead drug, Exparel, an injectable analgesic used in the postsurgical acute care setting. Sales of Pacira's lead product rose 15% during the second quarter to $65.8 million after rising by 27% from the prior-year period in Q2 2015. This slowing growth has worried investors, who had placed a hefty premium on Pacira's stock.

Now here's the good news: Exparel sales look to be on the cusp of a big sales boost. In September, Pacira Pharmaceuticals launched Exparel in the oral surgery setting, which complements its existing uses for soft tissue surgeries and orthopedic patients. Combined, soft tissue surgeries and orthopedic patients are a 42 million-person opportunity for Exparel, but oral surgery adds another 35 million, nearly doubling the company's possible patient pool. Furthermore, Pacira has multiple label expansion opportunities lined up for Exparel that could include total knee arthroplasty, select spinal surgeries, and nerve block.

Shareholders can also put potential Food and Drug Administration concerns safely in the rearview mirror. In December 2015, Pacira received word that the FDA was removing its 2014 Warning Letter, which could have potentially limited the use of Exparel. In other words, Exparel's outlook has really blossomed over the past 10 months despite what its share price suggests.

Peak annual sales estimates for Exparel vary wildly, but $500 million seems like an achievable figure if the product is successfully launched in oral surgery. That would nearly double the current sales trajectory, making its forward P/E of 24 and PEG of 1.1 seem quite reasonable.

Fitbit Blaze family of devices. Image source: Fitbit.

Fitbit Inc.

Finally, if you're looking to snatch up a deeply discounted company that's been pulverized in 2016, consider looking into health and fitness tracking device developer Fitbit (FIT). Shares of Fitbit have matched Pacira's 53% year-to-date plunge.

What's wrong with Fitbit? A lot of the pessimism can be traced to skepticism about long-term sales expectations. Apple, the other big player in the wearables space, has had only lukewarm success with its Watch, leading some pundits on Wall Street to forecast that Fitbit's sales could slow or stall in the coming years. Fitbit's stock also took a hit mid-year after announcing huge increases in its operating expenses as it ramped up the marketing of its products and boosted research and development spending.

However, long-term forecasts suggest that wearables will continue to be a fast-growing space. IDC is forecasting that wearable device shipments could grow 29% in 2016 to 101.9 million units, and by 2020 IDC is anticipating that device shipments will more than double to 213.6 million units. By comparison, Fitbit moved 5.7 million devices during the second quarter, or nearly 23 million on an extrapolated basis. If IDC's forecasts are correct, wearables could be far from a saturated market, and Fitbit could be capable of 50 million units shipped, if not more, by 2020.

Product innovation is also something Wall Street may be overlooking. The Fitbit Blaze and Fitbit Alta, which are both relatively new products, accounted for 54% of the company's second-quarter revenue compared to 50% in the sequential first quarter. The company may be spending more now on R&D and marketing, but it's managed to boost year-over-year device sales through the first-half of 2016 by 2.2 million over the prior-year period.

As icing on the cake, Fitbit ended Q2 with $760 million in cash, which is essentially a quarter of its current valuation. At 10 times forward earnings, Fitbit appears worth a deeper dive.