Warren Buffett famously said, "Price is what you pay; value is what you get." Sometimes a stock is beaten down for a reason, but other times, the market is irrationally giving you a chance to get a great value on a stock.

Teva Pharmaceuticals (NYSE:TEVA), Brookfield Infrastructure Partners (NYSE:BIP), and Boyd Gaming (NYSE:BYD) have all been beaten back from their highs, giving investors a chance to pick up these stocks at some absurdly cheap prices. Read on to find out why our Motley Fool contributors believe they remain good values.

Rising stock market chart

Image source: Getty Images.

Don't count out this generic giant

George Budwell (Teva Pharmaceutical Industries Limited): Teva Pharmaceutical Industries is the world's largest generic-drug company in terms of sales. Despite its top-dog status, however, its shares have been trading at dirt-cheap prices for the better part of two years now. At current levels, for instance, Teva's stock is garnering a staggeringly low price-to-sales ratio of 0.99.

What's behind this fire-sale valuation? Teva's stock has struggled for three reasons:

  • Intense competition in the U.S. generic-drug market, leading to price erosion across the board. 
  • The company's heavy debt burden, stemming from its generic-drug deal with Allergan
  • The loss of exclusivity for its flagship multiple sclerosis medicine, Copaxone. 

These three key headwinds have forced Teva to institute a dramatic cost-savings initiative and restructure its business on a global scale. The good news is that this reorganization effort has started to pay dividends in recent quarters.

Turning to the specifics, Teva has been steadily paying down its debt this year, and the drugmaker got a much-needed green light from the Food and Drug Administration for its injected migraine medicine, Ajovy, last month. Teva thus has a decent shot at dramatically reducing its debt load and returning to profitability -- on a GAAP basis -- within perhaps the next two years. 

Of course, Teva could run into some unexpected turbulence along the way, and there have already been some challenges with Ajovy's reimbursement status with third-party payers. But this top pharma stock is arguably too cheap to ignore, with its turnaround story coming into focus right now. 

The market is overlooking this stock's potential

Neha Chamaria (Brookfield Infrastructure Partners): Shares of this infrastructure operator, a subsidiary of Brookfield Asset Management, are trading at just under 12 times trailing-12-month funds from operations (FFO). I'll give you five reasons I believe that makes the stock really cheap right now:

  1. FFO is sitting at record highs.
  2. Management is targeting return on equity of 12%-15% in the long run.
  3. Dividends are expected to grow 5%-9% annually in the long term.
  4. Massive growth catalysts lie ahead for the company.
  5. The stock currently yields a hefty 5%.

Let's examine two key points about the company's business to give you an idea about where growth could from. First, Brookfield primarily owns and operates infrastructure assets in sectors including utilities, transportation, energy, and telecommunications, most of which offer services that are resilient to the ups and downs of economic cycles. That ensures predictable and stable cash flows for the company.

Second, and more importantly, Brookfield is now looking aggressively at new-age growth areas as well as at data centers and regions such as India, to build a stronger portfolio. Meanwhile, management also aims to proactively manage its portfolio so as to dispose of mature assets at regular intervals to reinvest funds opportunistically. The company aims to raise nearly $5 billion in asset sale proceeds over the next three to five years.

I believe for a company with such strong fundamentals, Brookfield Infrastructure stock deserves more love. It's also a great dividend growth stock, which alone justifies a higher valuation. Put another way, value investors have a good chance here.

Betting big on growth

Rich Duprey (Boyd Gaming): Gaming stocks have taken a hit over worries that Las Vegas is weakening, but Boyd Gaming's Vegas operations are popular off-Strip casinos that are more popular with the locals. It has also used acquisitions to bolster its position as one of the leading regional players, with 29 gaming properties in 10 states. That gives Boyd broad geographic diversity while enhancing both its size and scale to drive incremental revenue.

Perhaps the biggest opportunity is sports betting, which is seeing tremendous growth in the handful of states where it's currently legal. With scores more states set to legalize such gaming, Boyd, with its sprawling operations and extensive experience in operating one of the biggest sportsbooks in Nevada, ought to be able to tap into more markets than anyone else. Moreover, it has signed deals with MGM Resorts and FanDuel to develop an even bigger presence in the rapidly growing industry.

Boyd Gaming trades at 14 times this year's estimated earnings, yet analysts expect it to grow earnings at a 23% annual clip for the next five years. Its stock is priced at only 9 times its free cash flow and offers a modest dividend that yields around 1% annually. This beaten-down gambling specialist offers investors a chance to bet on a big recovery based on a diversified footprint in many markets that are poised to let it capitalize on its strengths.

George Budwell has no position in any of the stocks mentioned. Neha Chamaria has no position in any of the stocks mentioned. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.