The past 12 to 16 months in the stock market haven't been kind to many companies and investors, but in chaos can come opportunity. Lots of great companies have seen their stock prices drop tremendously, presenting a good opportunity for investors to grab shares at prices we haven't seen in quite some time.

Here are three stocks you could be glad you bought at current prices.

Two people sitting at a desk working on a drone.

Image source: Getty Images.

1. Alphabet

While the past year or so has been tough on most big tech stocks, Alphabet (GOOGL -1.05%) (GOOG -1.00%) had it worse than many of its peers. Some of the stock's struggles were a byproduct of macroeconomic conditions and a slowdown in digital ad spending, but I believe the stock has been unfairly punished as an overreaction to the recent artificial intelligence (AI) hype.

More specifically, the success of ChatGPT (which Microsoft owns a large portion of) and the botched presentation that occurred while introducing Google's AI chatbot, Bard. After Bard returned a wrong answer, Alphabet's stock plummeted, losing around $100 billion in market value in one day. A bit of an overreaction, if you ask me. 

GOOGL PE Ratio (Forward) Chart

Data by YCharts.

Looking at Alphabet's price-to-earnings (P/E) ratio, you could say that it's undervalued, especially compared to how expensive it's been in recent memory. Its P/E is 68% less than five years ago, and its forward P/E is much lower than other competitors. Even Meta a company that lost around 75% of its market value in just over a year's time, has a higher P/E than Alphabet now.

Alphabet has its faults, but it didn't get its reputation as one of the most innovative companies of our time by accident. Management deserves all the criticism it has been receiving lately, but the growth potential of the company remains strong.

If you haven't begun already, now might be the time to start or increase your stake in the company.

2. PayPal

PayPal (PYPL -1.84%) was a huge beneficiary of the mid-2020 bull market, with the stock increasing more than 240% from March 2020 to February 2021. But since then, it has lost over 75% of its market value and is the cheapest it's been since 2017.

PayPal's revenue grew 8.5% year over year to $27.5 billion, but maybe more impressive is the free cash flow (FCF) the company continues to generate. Its FCF increased from $4.9 billion in 2021 to $5.1 billion in 2022, and although it predicts a decline to $5 billion in 2023, it's still impressive.

PayPal's trailing-12-month FCF yield (FCF divided by market capitalization) is noticeably higher than most of its competitors, and its price-to-FCF is close to the lowest it's ever been. The company plans to use around 75% of its FCF to buy back shares, which is not only smart considering how cheap shares currently are, but it can also create additional value for shareholders.

PYPL Free Cash Flow Yield Chart

Data by YCharts.

Add in the fact that PayPal continues to grow in key metrics including active accounts (up 2% year over year), payment volume (up 9% year over year), and payment transactions (up 16% year over year), and it's looking like a good value for long-term investors. 

3. Walt Disney

Walt Disney (DIS -2.68%) has been a blue chip for quite some time now, but even blue chip companies have their faults. Disney has struggled in recent years with high operating losses in some divisions and lackluster creative output. But I believe the return of CEO Bob Iger will help get the company back on track.

Disney's bread and butter is its creativity and intellectual property (IP), and under Iger's first leadership stint, that drove the company's direction and culture. Under previous CEO Bob Chapek (who lasted only 2.5 years), a lot of that was seemingly lost, with many reports of employees complaining about creative restraints and bureaucracy. Iger understands Disney better than most, and should help spark a revival in the company.

Management suspended its dividend because of the pandemic, but plans to reinstate it, which should reassure investors about its future and financial health. Revenue grew 8% year over year in the first quarter of its 2023 fiscal year. And as it begins to prioritize cost-cutting, its bottom line should catch up.

Disney is an undisputed entertainment leader with an intellectual property moat that no other entertainment company can match. If you have time on your side, it's hard to look the other way when you see the stock trading at its current levels.