If you're aiming to "buy low and sell high," then it makes infinite sense to start your search with bargain-priced stocks. Regularly reviewing a list of stocks trading near their 52-week lows can be a great first step.

Here, I'll try to do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I'll conduct my search by industry. This will allow us to make some initial comparisons among semi-related companies.

There are 24 industry groups as defined by the Global Industry Classification Standard (GICS). Capital goods is one of them. Within capital goods are four defense stocks I'd like to highlight.

Company

Market Capitalization (in millions)

% Change from 52-week Low

P/E Ratio (trailing)

Lockheed Martin Corporation (NYSE: LMT)

$25,389

                         3.9%

                         9.2

General Dynamics (NYSE: GD)

$24,485

                         16.1%

                         10.2

Raytheon (NYSE: RTN)

$17,707

                         11%

                         10.9

ITT Corporation (NYSE: ITT)

$8,816

                         14.3%

                         13.9

Source: Capital IQ, a division of Standard & Poor's. Data as of Oct. 18; it does not include the effects of Lockheed's earnings announcement.

Of the four, only Lockheed's reported Q3 earnings so far. The other three report next week. Lockheed's profits dropped 28 percent from the year before, it cut its earnings forecast for 2010, and it muted expectations for 2011 by predicting sales growth in the "low single-digit range."

Why? It's at least in part due to the U.S. government's latest efforts on cost controls -- with the goal of slashing $100 billion, leading to programs being canceled or delayed.

Similar fears are driving down stocks across the industry. Seeing these similar multiples across defense players, there may be opportunity here. Some defense contractors are going to be less hurt than others by cuts depending on the prioritization of defense projects. When a whole industry is lagging, it's time to pick out the best players. I'll be paying more attention to the big boys Lockheed, General Dynamics, and Raytheon, especially.

Interested in reading more about these stocks? Add them to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

Anand Chokkavelu doesn't own shares of any companies mentioned. General Dynamics and ITT are Motley Fool Inside Value picks. He posts his favorite articles on his Twitter feed.

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