It's official. As of midday May 20, 2022, the benchmark S&P 500 (^GSPC -0.60%) had declined more than 20% from its all-time closing high in early January, which places the widely followed index in a bear market.

There's no denying that bear markets can tug at investors' emotions and create jaw-dropping single-session price movements. The uncertainty of not knowing how low the market could go, or precisely how long a bear market could last, tends to feed on these investor fears.

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However, history is two-sided coin. Even though market corrections are an inevitable part of the investing cycle, data shows they typically resolve quickly. More importantly, every notable downturn in the broader market throughout history has eventually been erased by a bull market rally. Put in another context, every bear market has represented an opportunity for patient investors to scoop up great companies on the cheap.

With the S&P 500 mired in a bear market, a number of stunning deals have emerged for patient investors.

Bank of America

The first plain-as-day bargain for patient investors is money-center giant Bank of America (BAC -0.38%), which has lost about a third of its value in a little over three months.

The big worry for bank stocks of all sizes is that a recession could be on the horizon, or perhaps already here, as evidenced by the 1.4% gross domestic product retracement for the U.S. in the first quarter. Banks are inherently cyclical, which means economic downturns usually lead to an increase in loan delinquencies and charge-offs.

But the funny thing about cyclical businesses is that they enjoy far more time in the sun than under a cloud of uncertainty. Whereas recessions are inevitable, they typically only last a couple of quarters. By comparison, economic expansions can go on for many years. Buying bank stocks like BofA allow investors to take advantage of the long-term growth of the U.S. economy.

What really differentiates Bank of America and makes it, in my view, the top big bank to own right now is its interest rate sensitivity. No money-center bank will see their net interest income vacillate more as a result of interest rate yield curve movements than BofA. This is noteworthy given the Federal Reserve's monetary policy shift that's emphasizing aggressive interest rate hikes to combat historically high inflation.

In other words, the company is set to generate higher profits from variable-rate outstanding loans without doing any extra work. Per BofA, a 100-basis-point parallel shift in the interest rate yield curve should bring in an estimated $5.4 billion in added net interest income over the next 12 months. 

Current and prospective investors should also appreciate Bank of America's investments in digitization. The company ended the first quarter with 42 million active digital users, and has seen the percentage of sales completed online or via app climb to 53% from 30% in just a three-year stretch.  Because digital transactions are so much cheaper for BofA than in-person or phone-based interactions, it's allowed the company to consolidate some of its branches and improve its operating efficiency over multiple years.

Even with short-term headwinds, Bank of America looks like an amazing deal for long-term investors at roughly 8.5 times Wall Street's forward-year earnings forecast.

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Image source: Getty Images.

Walgreens Boots Alliance

Another stunning deal that sticks out from the crowd with the S&P 500 pushing into a bear market is pharmacy chain Walgreens Boots Alliance (WBA 1.50%).

For the past two years, Walgreens has been hit with a double whammy. First, COVID-19 lockdowns dramatically reduced foot traffic into its stores, which hurting front-end retail sales and clinic revenue. Now the company is being hampered by historically high inflation, which tends to largely impact low-income consumers. This could have a negative impact on the company's retail sales in the coming quarter(s).

However, neither of these issues is a long-term deterrent to Walgreens Boots Alliance's growth strategy -- and that's what's important.

Management is currently in the midst of executing a multiyear turnaround strategy that's designed to boost the company's operating margins, increase its organic growth rate, and position it to improve engagement at the grassroots level.

To start with, Walgreens has successfully reduced its annual operating expenses by more than $2 billion. What's more, it did so a full year ahead of schedule.

Yet while the company was busy trimming costs in certain areas, it was willingly spending on various digitization initiatives. In particular, the pandemic served as a wake-up call that investing in online retail sales is a must. Even though Walgreens' physical stores will continue to generate the bulk of sales and engagement, having direct-to-consumer channels available, and/or providing convenient pickup via drive-through, is an easy way to generate sustainable organic growth.

But as a Walgreens shareholder, what I'm most excited about is the company's full-service clinic initiative. Walgreens has partnered with, and become a majority investor in, VillageMD, with the goal of rolling out 1,000 full-service, co-located, clinics in over 30 U.S. markets by the end of 2027.  Just over 100 of these clinics are already open.  Being physician-staffed, the expectation is for these clinics to encourage repeat/regular visits, as well as reignite growth at its higher-margin pharmacy.

While I'm not denying that headwinds exist, they look fully baked in. With Walgreens valued at just 8 times forecast earnings for fiscal 2022, as well as sporting a 4.7% dividend yield, it looks ripe for the picking.

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Jazz Pharmaceuticals

A third stunning deal with the S&P 500 plunging into a bear market is specialty biotech stock Jazz Pharmaceuticals (JAZZ -0.33%).

While there are tangible reasons that explain the declines in Bank of America and Walgreens Boots Alliance, trying to make sense of the 23% drop in Jazz Pharmaceuticals from its 52-week high is difficult. The best guess I can muster is that rapidly rising interest rates reduce access to cheap capital, and Jazz has been known to lean on the debt market to make acquisitions.

One of the best things about healthcare stocks is that they're generally defensive. No matter how much the S&P 500 rises or falls in a day, week, or month, people will still get sick and require medical care. This means drug developers like Jazz, medical device-makers, and healthcare service providers, can expect a base level of demand in any environment.

Jazz's claim to fame is its oxybate franchise, which is composed of brand-name drugs Xywav and Xyrem. These are therapies that treat sleep disorders, such as narcolepsy. For years, Jazz thrived due to the incredible pricing power it possessed with Xyrem. However, the company's future is all about Xywav.

What makes Xywav special is its composition. It contains 92% less sodium per nightly dose than previous generation therapy Xyrem. High sodium levels can lead to a number of complications for Xyrem patients with heart issues. With this new-generation drug working just as well as Xyrem, the company should have no trouble shifting patients to Xywav over time. To add, this is also a smart way for Jazz to secure exclusivity and its core cash flow stream for a long time to come.

The other exciting portfolio component for Jazz is Epidiolex, a cannabidiol-based drug approved to treat two rare forms of childhood-onset epilepsy. Epidiolex came into the fold when Jazz acquired GW Pharmaceuticals for $7.2 billion in May 2021.  Epidiolex has label expansion opportunities on the horizon, and could eventually blossom into a treatment that generates more than $1 billion in annual sales.

To keep with the theme of this list, Jazz Pharmaceuticals can be purchased by patient investors for just a little over 8 times forecast earnings in 2022 and 2023. That's an amazing deal for a company whose revenue arrow keeps pointing higher.