Overall, the third quarter was pretty solid.

The broad market is finally up a bit on the year because of a recent rally, but stocks have been anything but steady. Because small-cap stocks are generally more volatile, they've experienced a bit of a greater drop than most. That's almost to be expected. However, what's interesting is that large-cap stocks have actually fallen a slight bit more than the broad index -- and these are the billion-dollar companies that usually hold up well in a recession or a double dip.

The good news is that now the market is ripe for cherry-picking. Hundreds of small and large successful companies have gotten hammered as of late, and that means there are some great value plays to be had.

To get you started, I've screened for stocks that have dropped significantly over the past month and that are trading for very low price-to-earnings ratios. In addition, we've utilized our 170,000-strong Motley Fool CAPS investing community to select only the best of the best, those companies with either a four- or five-star ranking. Here are three of the top companies from the list:


4-Week Price Change

Price-to-Earnings Value

CAPS Rating (out of 5)

Frontline (NYSE: FRO)




Taseko Mines (NYSE: TGB)




Sandridge Energy (NYSE: SD)




Source: Motley Fool CAPS as of Dec. 3.

These losses may not seem that huge, but in the last month, the S&P 500 has gained close to 2%, so these companies are definitely getting hit hard.

International shipping company Frontline might still be reeling from its third-quarter earnings report, where it failed to meet analyst expectations of $0.18 a share and only brought in $0.07. Other numbers weren't so great either; after removing allowances for voyager expenses and commissions, revenues were down 4% and its average time-charter equivalents (TCE) were down 7% from last year. Other shippers seemed to have fared a bit better; for instance, Dryships (Nasdaq: DRYS) has actually shot up by 39% in the past month. Not only did earnings exceed expecatations, but Dryships was happy to report that more than 80% of its shipdays are already fixed for 2011.

Taseko Mines has lost some ground as the Canadian securities regulator announced an investigation into whether leaked information about a government review of a proposed gold mine led to a huge sell-off in the company's stock price. On Oct. 14, shares of Taseko fell by about 37% -- and about two weeks later the federal environmental minister announced that the department would not approve a gold mine in British Columbia for Taseko. Obviously, the company is still hurting from this decision. And it's quite understandable -- the rush for gold is as fierce as it's ever been, reflected in company actions such as Eldorado (NYSE: EGO) acquiring Sino Gold and Goldcorp (NYSE: GG) outbidding Eldorado for Andean Resources.

Sandridge certainly had a bad earnings report, announcing 300% less EPS than analysts had expected. Sandridge, however, has jumped deeply recently into the oil game with its purchase of Arena Resources, which it hopes can help generate future earnings as oil sits at a nice price and remains the energy-du-jour. Potentially, Sandridge looks cheap on the surface in terms of its assets and potential, but it's got some massive debt and huge capital needs. Make sure to drill down on this one before moving further.

The Foolish bottom line
Don't let fear get the best of you -- a falling or stagnant market can be a great thing in the long term, if you take advantage of the opportunities in front of you. Fortunately for investors, there's no shortage of options, and both small- and large-cap stocks just happen to be some of the best around.

Don't see any stocks here that interest you? Try doubling down on these home run hopefuls.