All three major stock indices are now in bear market territory, but there are plenty of individual stocks that are faring far worse than the headline averages. And it isn't just high-momentum tech stocks that are getting crushed. There are many rock-solid businesses that are trading for 40%, 50%, or far more below their highs.

Three in particular that look attractive right now are Digital Realty Trust (DLR -0.77%), Howard Hughes Corporation (HHH -0.13%), and Ally Financial (ALLY -0.64%). All three are down by more than 45% from their 52-week highs but could be incredible opportunities for patient investors.

A rare bargain in this rock-solid REIT

There's quite a bit of pessimism in the data center real estate space right now, especially since notable short-seller Jim Chanos revealed that data center REITs are his newest "big short" idea. But to put it mildly, I'm not buying it.

Digital Realty Trust is one of the largest players in data centers, with operations all over the world. And the recent numbers look excellent. In the second quarter, core FFO (funds from operations, the real estate version of "earnings") grew 12% year over year, and leasing activity was very strong. Management said that demand remains elevated, and with the long-term trends toward more and more connected devices and 5G technology, there's no reason to think the thesis here has changed.

In the meantime, Digital Realty has a 5.2% dividend yield, has increased its payout every year since its 2004 IPO, and trades for its lowest price in more than five years.

A unique real estate business with tremendous upside potential

Howard Hughes Corporation is admittedly difficult to value, as it's the only major real estate company of its kind. Think of Howard Hughes as a real-life version of the popular video game Sim City. The company acquires large tracts of land, such as the 37,000 empty acres it recently purchased in the Phoenix area. Howard Hughes then sells a small portion to homebuilders, who develop residential neighborhoods, which in turn create demand for commercial properties, which Howard Hughes builds and collects rent from. These create more housing demand, and the cycle repeats over and over again.

Howard Hughes is behind some of the largest and most successful master- planned communities in the United States, including The Woodlands in the Houston area and Summerlin near Las Vegas. And thanks to pessimism in the real estate market, the stock is trading for nearly 50% below its 52-week high despite generally strong momentum in its business. At its 2022 investor day, management used conservative sum-of-the-parts valuation to show the business' intrinsic value is about $175 per share, more than three times the current price. If this is even close to being accurate, Howard Hughes could be a massive bargain.

A highly profitable bank on sale

Last but not least, Ally Financial (ALLY -0.64%) is down by 48% from its 52-week high. The company's primary business is auto lending -- it was formerly General Motors' financial arm -- and it originated $13.3 billion in auto loans in the second quarter and has a net charge-off rate of less than 0.5%.

Ally Financial is an incredibly profitable business. Ally's newly originated auto loans have an average interest rate of 7.8%, and it pays just 0.76% on its average consumer deposit. Although the uncertainty in the economy, as well as the supply chain issues continuing to affect the auto industry, are a concern, this is a highly profitable business that should weather the storm just fine. And at the current price, Ally pays a 4% dividend yield, trades for a 23% discount to its book value, and trades for a rock-bottom valuation of 4.5 times forward earnings.

Buy with the long term in mind

These are three excellent businesses that I own in my portfolio and that I think will deliver fantastic returns over the long run. However, it's wise to expect a bumpy ride for the time being, especially with recession fears escalating and inflation yet to subside.