While I like to put most of my investing efforts toward finding high-quality companies that are selling at bargain prices, I also maintain a small portfolio that I stack with stocks that are simply trading at rock-bottom prices. In particular, I look for companies that are trading with a discount of 40% or more from their book value.

This is a pretty extreme valuation and often means that we're looking at companies that have something really nasty going on that's putting pressure on the stock. But ugly
circumstances are often a hiding spot for opportunity. So let's take a look at a few of the companies that currently carry such a discount.

Company

Market Cap

Price-to-Book-Value Multiple

Bank of America (NYSE: BAC) $106 billion 0.51
Hartford Financial Services (NYSE: HIG) $10.6 billion 0.55
Cemex (NYSE: CX) $8 billion 0.51
Genworth Financial (NYSE: GNW) $4.9 billion 0.36
DryShips (Nasdaq: DRYS) $1.5 billion 0.45

Source: Capital IQ, a Standard & Poor's company.

It's unusual to find companies of this size trading at these kinds of multiples, but we're living in fairly unusual times. Uncertainty still hangs heavy in the financial sector and a high-single-digits percentage drop in the S&P 500 since late April has only made prices more attractive. But are any of these actually worth buying?

Bank of America
The problems facing Bank of America are all too familiar at this point -- dour housing market, uncertain economic outlook, "robosigning" debacle -- and it's hard to say what any of the big banks' loan books are really worth. But as my fellow Fool Morgan Housel recently pointed out, that is a hefty discount. It was hefty enough to make Anand Chokkavelu double down on the stock for his Rising Star portfolio, and it's hefty enough to seriously pique my interest.

Genworth Financial
Genworth is in a very similar situation to B of A because it's a major underwriter of mortgage insurance. During the worst of times, Genworth had a very nasty string of losses, and it managed to report a $161 million loss in the fourth quarter of last year. However, over the past 12 months, the company has been profitable. It's going to continue to be a rocky road, but it's a steep enough discount that I became a buyer.

Hartford Financial
Hartford's wealth management division took a beating during the downturn thanks to some pretty nasty investment losses. But are investors too pessimistic about the future? The company has earned more than $1 billion in profit over the past year, and considering that the stock has historically traded well above book value, it would seem that investors are anticipating losses nearing $10 billion. That seems a bit excessive to me.

Cemex
If only the housing boom had gone on forever, then Cemex and its growing debt load probably would have been just fine. But alas, that wasn't the case, and Cemex's stock has been clobbered as investors have fretted about its balance sheet. And investors aren't wrong -- Cemex is in a very precarious financial position. But despite the company's recent losses, it is still reporting a good amount of free cash flow. And if we assume that the world construction markets don't stay in the dumps forever, a business recovery could help Cemex better cope with its debt.

DryShips
If you want to venture into the dry bulk shipping sector, you can take your pick of cheap stocks -- Navios Maritime (NYSE: NM) and Genco Shipping (NYSE: GNK) are just two more of a long list of dry bulk shippers trading at half or less of their book value. DryShips though, could be one of the more interesting plays in the sector. Questionable management and an impressive amount of debt don't make a compelling long-term investment case, but the company's ownership stake in deepwater driller Ocean Rig along with the bargain valuation could make it a gamble worth checking out.

As I said at the outset, these types of cheap, but riskier, bets make up a smaller portfolio of mine that is diversified among a variety of similar low-book-value investments. For the bulk of my portfolio, though, I scour the market for companies that look a lot like the stocks that my fellow Fools have uncovered in "13 High-Yielding Stocks to Buy Today." To get your hands on a free copy of that special report, click here.

The Fool owns shares of and has opened a short position on Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer owns shares of Genworth Financial, but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.