October has been a wake-up call for investors that the stock market won't go up in a straight line, even if we'd like it to. Earlier this month, the Dow Jones Industrial Average trudged through its third-largest point loss in its 122-year history. In the process, it deflated what had been some very frothy tech-stock valuations.

But lost in the mix is the fact that value stocks -- an arbitrary term used to describe publicly traded companies that are valued at a price-to-earnings or PEG ratio well below the broader market and/or their peers -- continue to get cheaper. That's because Wall Street and investors have favored growth over value since the end of the Great Recession. However, with the stock market looking toppy and interest rates clearly on the rise, value stocks are beginning to come into focus once more.

Spanning the market, five deeply discounted value stocks stand out. What's a "deeply discounted value stock," you ask? I'd arbitrarily define it as a company with a forward price-to-earnings ratio of less than 10 that also happens to be cheaper on a forward P/E basis than it's been in at least a decade.

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1. Bank of America

Sure, Bank of America (NYSE:BAC) has seen its stock catapult higher from its Great Recession lows, but its forward P/E of 9.8 would represent a more-than-decade low for the stock.

Bank of America has two factors working in its favor. First, it's finally put all of the litigation and bad loans tied to the Great Recession in the rearview mirror. Now, this isn't to say that reading the income statement and balance sheet of a money center bank the size of B of A isn't difficult, because it is. But it does mean that investors are seeing a much cleaner per-share profit figure without litigation charges eating away at profits. This has led to easier-to-understand quarterly results, and also more in the way of share buybacks and higher dividends for the company.

Secondly, higher interest rates could be a boon to Bank of America's interest income. The company noted in its recently reported third-quarter operating results that a 100-basis-point upward shift in short- and long-term interest rates over the next 12 months would lead to an estimated $2.9 billion in added net interest income. Long story short, B of A is in prime position (pun intended) to succeed. 

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2. Celgene

Biotech stocks are rarely ever value stocks, but Celgene (NASDAQ:CELG) is changing that perception. Currently sporting a forward P/E of less than 8, I'm not certain Celgene has ever been this cheap on a fundamental basis.

The big worry for Celgene has been the company's overreliance on multiple myeloma drug Revlimid, which makes up more than 60% of total sales. The thing is, Celgene has worked out settlements to keep a flood of generics from hitting the marketplace until the end of January 2026. In other words, organic label expansion and strong pricing power for Revlimid should allow it to remain a cash cow for Celgene for years to come.

There's also been backlash over Celgene's flubbing of its new drug application for multiple sclerosis hopeful ozanimod, which was being counted on to help diversify the company's sales away from Revlimid. But even with the delay, ozanimod will likely be a multi-billion-dollar drug when it does come to market. Meanwhile, the company's other key cancer and inflammation assets look to be on track to grow organically on a volume, price, and label-expansion basis. There looks to be little for investors to worry about.

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3. Whirlpool

Although shares of appliance giant Whirlpool (NYSE:WHR) have been circling the drain in recent months, its forward P/E of 6.7 is now lower than it's been at any point over the past decade. That might intrigue deep-discount value investors.

Whirlpool's biggest issue of late has been the burgeoning trade war between the U.S. and China. Higher aluminum and steel prices have forced Whirlpool to pass along price hikes to consumers which, in turn, has hurt near-term sales and caused it to modestly lower its full-year profit forecast. Then again, Whirlpool has been through this many times before, and consumers have shown minimal resilience to price hikes beyond a couple of quarters. It's a brand-name company that consumers turn to, so this is likely to be a temporary hiccup rather than a long-term downtrend in sales.

Whirlpool is also doing an excellent job of pushing into higher-growth markets. The company has been buying its way into Asia, which has helped buoy its operating results in recent months, which have been hit by North American weakness. As an added bonus, Whirlpool's dividend yield is more than double that of the S&P 500 at 4.3%.

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Image source: IBM.

4. IBM

Perhaps IBM (NYSE:IBM) should ask Watson to perform a miracle, because its revenue has declined on a year-over-year basis in 23 of the past 26 quarters. Then again, IBM's forward P/E of 9.2 is the lowest it's been in at least the past decade. Combined with its nearly 5% dividend yield, Big Blue could start turning heads.

Possibly the biggest factor working in IBM's favor is the growth of the company's cloud computing segment. IBM's struggles can primarily be traced to its reliance on legacy software. However, its push into the cloud, though tardy, is beginning to pay off. On a trailing-12-month basis, cloud revenue worked out to $19 billion as of the company's third-quarter report, which represents 20% year-on-year growth. More importantly, cloud revenue now comprises about a quarter of all sales at IBM, and this figure should continue to march higher. 

Unlike cloud computing, IBM looks to be on the leading edge of the blockchain revolution. Blockchain represents a new way of moving money more efficiently than existing bank networks, as well as tracking data in a more secure fashion. IBM is already testing its proprietary blockchain with a dozen banks in Southeastern Asia, and formed a joint venture with A.P. Moller Maersk in January to develop shipping-based blockchain solutions. It's not a company to write off just yet.

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5. AT&T

Finally, there's telecom giant AT&T (NYSE:T) with a forward P/E ratio of 9. That's just a hair below its low over the past decade. And when combined with its delectable 6% yield, it could make the company a hot commodity if the stock market heads lower or simply stops going up in a straight line.

Sure, AT&T isn't much of a growth story at the moment, but that could actually change pretty soon. It's in the middle of rolling out its new 5G network in a handful of cities, with the expectation of greater adoption as we move toward the end of the decade. Though costly, these networks should drive an entirely new round of data consumption that, in turn, will help pump up AT&T's top- and bottom-line results.

AT&T also recently completed the transformative acquisition of Time Warner. This highly criticized deal brings the TBS, TNT, and CNN networks under its ownership. These popular networks are expected to be used by AT&T to lure wireless video subscribers away from competitors, as well as increase AT&T's pricing power when dealing with advertisers. Though this isn't your parents' AT&T, it can still be a growth and value story for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.