Image source: Flickr user Jim Makos. 

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.

This value stock could drive big gains
We'll begin this week by turning to Canadian-based auto parts giant Magna International (NYSE:MGA), which manufactures a host of interior automobile components (seating systems, for example), as well as vision systems such as interior and exterior mirrors.

The global auto market has undergone quite the rebound since the Great Recession, and for the most part Magna International has been a strong participant -- that is, until last year. Despite generating a majority of its income from the steadily growing North American market, sales for Magna dipped 7% in the third quarter, and have dropped 8% through the first nine months of fiscal 2015. The company also completely whiffed on its Q3 EPS, producing $0.97 when $1.09 was expected by Wall Street. Although its performance could easily be described as disappointing, if you look between the numbers you'll see justification for the recent weakness.

Image source: Magna International.

For starters, foreign currency translation negatively affected Magna International's top line by $870 million in Q3. Since $8.9 billion to $9.4 billion of its forecasted $26.3 billion to $27.2 billion in full-year revenue comes from overseas markets and the U.S. dollar has been rising at a breakneck pace, Magna has been exposed to lost revenue and profits when translating its overseas currency from sales back into U.S. dollars. Investors really shouldn't fault Magna for currency moves that it can't control. Best of all, sans these currency fluctuations, Magna actually grew its top line on an operational basis in Q3.

Additionally, Magna sold its interiors unit to Grupo Antolin for $525 million earlier in the year. This franchise accounted for roughly $2.4 billion in sales in 2014, and it shouldn't be included for operational comparisons moving forward.

What investors get when buy Magna International is a well-diversified global auto parts supplier that has ties in with Detroit's biggest automakers. Magna is projected by Wall Street to boost its full-year profits from $4.40 per share in fiscal 2015 to as much as $7 by 2018. It also has estimates from IHS Automotive in its back pocket that are calling for a record 18.2 million vehicles to be sold in the U.S. by 2017. All signs appear to point to a rebound for Magna and its sub-eight forward P/E.

Bed Bath & Beyond a good deal
Now, if you think Magna International has been disappointing with the auto industry as strong as it is, then you've got another thing coming if you check out a one-year chart on home furnishings and domestics retailer Bed Bath & Beyond (NASDAQ:BBBY). Before you look, you may want to hide the kids. Despite the broader market hovering around the flatline in 2015, Bed Bath & Beyond tanked almost 37%. Yuck.

"What went wrong for the company," you wonder (aside from the fact that it's only topped Wall Street's EPS forecast twice in the past 12 quarters)? Mainly, it's a confluence of concerns that include a possible slowdown in U.S. economic growth, the rise of lending rates (which could limit the number of new homes that are sold and need to be furnished), margin contraction caused by an increase on customer coupon usage, and the proliferation of online sales. Consumers shopped online more than ever during the holiday season, and bricks-and-mortar stalwarts like Bed Bath & Beyond have paid the price.

Image source: Bed Bath & Beyond.

The above doesn't paint the best picture for Bed Bath & Beyond, but I still see reasons to be excited about its long-term potential. To begin with, the company's online sales soared more than 25% in the second quarter of fiscal 2016. Admittedly, Bed Bath & Beyond's digital sales represent just a fraction of its physical store sales, but it's a clear indication that its management team understands where to boost its investments.

I also believe that rising lending rates could still work in the company's favor. Even if new home sales decline in step with higher mortgage rates, current homeowners seem unlikely to abandon the idea of renovating or redecorating their homes. The way I see it is Bed Bath & Beyond has long-tail growth opportunities in an expanding or contracting interest rate environment.

Bed Bath & Beyond has also expanded its product lines to reach new customers. It's tinkering with the introduction of more private-label brands to stand out from other domestic product retailers, and it's opened beauty and food departments in a handful of its bricks-and-mortar locations to bring in a new set of customers that may not have previously visited a Bed Bath & Beyond store. 

As it stands now, Bed Bath & Beyond is valued at just nine times forward earnings. Yet, the company has the capacity to throttle down on some of its spending, boost its efficiency, and reinvest in its online franchise to deliver annual growth of around 5%. With $6+ in EPS projected by 2019, value stock investors would be wise to give this company a closer look.

Reddy, set, go!
Lastly, we'll hop over to the healthcare industry where generic drug developer Dr. Reddy's Laboratories (NYSE:RDY) could be serving up a delectable valuation for value stock investors.

Image source: Food and Drug Administration.

Like most drug developers, Dr. Reddy's Laboratories had a rough 2015. Congress has been clamping down on what it believes to be excessive drug prices, and regardless of whether a company manufactures branded or generic drugs and whether its price point is three digits or six annually, drug developers were creamed all the same.

Dr. Reddy's faced its biggest throttling in early November when the U.S. District Court of Delaware temporarily barred the company from selling a generic version of AstraZeneca's (NASDAQ:AZN) blockbuster heartburn pill Nexium. The reasoning? Dr. Reddy's pill had a purple color and was deemed to be too much of a copycat for AstraZeneca's branded pill. The potentially extended loss of generic Nexium could wind up shaving $0.15 to $0.20 off its full-year 2016 EPS based on the profit expectations of the generic drug per analysts at Bank of America, although it'll likely do little to save AstraZeneca's Nexium from substantial sales erosion in the near term. 

Now here's the good news: Dr. Reddy's has a vast portfolio comprised of more than 200 generic compounds across more than 20 countries. The uncertainties surrounding generic Nexium are disappointing for sure, but it seems like a classic overreaction with such a deep portfolio and what I prefer to deem a limitless pipeline. Remember that patent time frames are finite, meaning generic drug developers have a seemingly endless pipeline of therapies with which they can formulate a competing therapy. Generic drug developers may not have the best margins, but they often make up for margin weakness in sheer sales volume.

Within the U.S., generics are expected to take on increased importance in the coming years as brand-name drug prices soar. Healthcare costs remain in the spotlight, and one of the few effective ways to reduce a patient's costs is through the use of generics, which should benefit Dr. Reddy's over the long run. Sporting a reasonably low PEG ratio of 1.3, I'd suggest this value stock could help cure some investment ills.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.