Investing Pixabay
Image source: Pixabay.

While many companies' shares are rising past their fair values now, others are trading at potentially bargain prices. The difficulty with bargain shopping, though, is that you may be understandably hesitant to buy stocks wallowing at 52-week lows. In an effort to separate the rebound candidates from the laggards, it makes sense to start by determining whether the market has overreacted to a company's bad news.

Here's a look at three fallen angels trading near their 52-week lows that could be worth buying.

A rare value stock
Ireland-based rare disease drug giant Shire (NASDAQ:SHPG) has had quite the topsy-turvy past two years. Last year, Illinois-based AbbVie (NYSE:ABBV) agreed to purchase it for a whopping $55 billion, but wound up walking away from the deal following changes to U.S. laws governing tax inversions. The breakup fee from AbbVie netted Shire a handsome $1.6 billion windfall profit. 

More recently, Shire has taken heat for some of its high-priced drugs, which in some instances  cost upwards of $300,000 per year. Some members of Congress have been attempting to move that body to act on what they view as overpricing of drugs, and it's always possible that prescription drug reforms and monthly consumer spending caps could crush drug developers' profits.

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Image source: Centers for Disease Control and Prevention. 

However, I see things differently and would suggest value investors dig into the Shire story a bit deeper. They'll find a company with solid pricing power that could potentially bring a dozen or so new rare disease therapies to market by 2020. Keep in mind, this is all dependent on the success of its pipeline products in clinical trials. On an EPS basis alone, Shire is forecast to grow from the $10.60 reported in 2014 to north of $17 by 2018, with revenue growth of roughly 45% over that same time span.

There's also the potential that Shire could be acquired, or could go back on the offensive itself. In August, Shire bid $30 billion for Baxalta (NYSE:BXLT), a rare disease drugmaker focused on hematology and immunology indications. Baxalta rejected the initial offer, suggesting that it undervalued the company, but Shire is expected to make another run at Baxalta with a higher offer that's inclusive of a cash component this time around. Bloomberg estimates that the combined company could put as many as 30 new drugs on pharmacy shelves over a five-year period. 

Exciting things are happening at Shire, and I believe this a value stock you'll want to consider owning.

Gas up your portfolio
The energy sector has been a major source of frustration for investors over the past year, but being selective may have its perks. Specifically, I'd point to midstream provider ONEOK (NYSE:OKE) which is responsible for natural gas pipelines, storage, processing and transportation, as well as natural gas liquids storage and distribution.

As you might have guessed by now, weaker natural gas prices are crushing the shares of any company that has even the faintest ties to the sector, including ONEOK. Exposure to weakening NGL pricing isn't helping either. ONEOK's NGL segment is where it generates the majority of its operating income, so investors are concerned about the distributor.

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Image source: ONEOK.

But a lot of these concerns might be overblown. Despite NGL pricing weakness, volume growth of NGLs gathered and fractionated increased during the third quarter compared to the previous year, with NGLs transported on gathering lines rising by roughly 49%.

Furthermore, ONEOK's natural gas pipeline and storage business isn't really worrisome, even with natural gas prices falling. Pipelines are more dependent on demand for natural gas than on natural gas prices, and natural gas producers haven't done much of anything to reduce production. With the expectation that, as a cleaner burning fuel, natural gas will see its demand grow over time, it's a fairly safe bet that pipeline and storage infrastructure plays like ONEOK will benefit. Considering that many of ONEOK's contracts are locked in for multiple years, there's not much concern for the overall health of its natural gas segment.

By as early as 2017, Wall Street projects that ONEOK could generate earnings per share of more than $2, which, based on its current price, would work out to a very forward P/E of 10. The company is also expected to generate between $4 per share and $6 per share in annual cash flow, which should be more than enough to cover its quarterly $0.615 per share dividend. While dividend growth in the near-term may not be a priority, its 11% yield looks like an ample reward for investors in the interim.

Drive to be successful
Lastly, if you want a value stock near a 52-week low that you should consider pressing the pedal to the metal on, look no further than Dana Holding (NYSE:DAN), a manufacturing of driveline, sealing and thermal-management technologies for the passenger, commercial, and off-highway equipment markets.

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Dana's Spicer LMS Aluminum Wheel Hub System. Image source: Dana Holding. 

What's wrong recently? Dana whiffed on Wall Street's EPS projections in two straight quarters, and its results are being hammered by negative foreign currency translation and the divestiture of its operations in Venezuela, which prevents an true apples-to-apples comparison of its performance to previous years. Additionally, supply restraint issues in North America and weaker South American truck production hurt its business in the third quarter.

Now for the good news. First, currency issues and divestments can be removed from the equation. These aren't items that are reflective of Dana's ongoing operations. If we do so, we see a company that grew year-over-year sales by 6%, or $69 million, in the third quarter. Also, the company says it has dealt with its supply constraints from the third quarter already, which should lead to it growing its North American market share in subsequent quarters. The passenger vehicle market in the U.S. has been pacing in excess of 18 million units for the past three months, implying there's still room for growth for auto component suppliers like Dana.

The company has also done a good job of returning money to shareholders. Its dividend of 1.7% may not be much to look at, but the company has also repurchased roughly 63 million shares of stock for a total of $1.33 billion.

Looking ahead, Wall Street isn't expecting a lot of growth from Dana in the near-term. However, it's trading at less than eight times its forward profit projections, and could easily generate in excess of $3 per share in cash flow next year. This reward-versus-risk profile would appear to suggest more upside than downside potential, and those are odds that value investors typically appreciate.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of and recommends Oneok. 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. The Motley Fool has a disclosure policy.