While many companies are rising past their fair values, others are trading at potential bargain prices. While many investors would rather have nothing to do with stocks wallowing at 52-week lows, it makes sense to see 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.

Can Big Blue equal big green?
Few companies can claim as steady a rise throughout history than IT infrastructure and software developer IBM (NYSE:IBM). But since the beginning of October, Big Blue's shareholders can't bury their heads under the covers quick enough.

Facing a rapidly changing technology environment that has moved static software from PCs and laptops to the cloud, IBM has been left scrambling to find ways to quickly develop competitive cloud platforms. The higher costs associated with this development, coupled with falling sales in its traditional software business, caused the company to broadly miss Wall Street's profit estimates in the third quarter. Overall, revenue slipped 4%, and forward guidance came down significantly. CEO Virginia Rometty stood by the company's strategy but pinpointed the weakness as a lack of quick execution.

Final Wire Photo Apl
Source: IBM.

Long story short, IBM isn't perfect. But IBM has also been in this situation before in the mid-1990s, and it came out stronger following a complete restructuring of its strategies. Who's to say that won't happen again?

IBM has shed its semiconductor business, and it kissed its lower-margin hardware business goodbye years ago. This is a company geared toward the cloud, and its management team realizes that making the move into the cloud through acquisitions -- like its purchase of SoftLayer in 2013 -- is necessary, regardless of how long the transition takes.

Also consider that IBM began transitioning out of hardware a full decade ago. It saw the potential for an architectural shift then and has been laying the groundwork for today's cloud software for a number of years. While IBM's massive size may be a big disadvantage in the near term (implementation takes a long time), that size, and the cash flow that comes with it, should help IBM generate above-average returns on its cloud investments by the end of the decade.

And let's not forget that IBM is one of Warren Buffett's largest holdings. Buffett has a keen eye for value stocks, and IBM's forward P/E of nine and yield of 2.8% have to be looking mighty attractive to income-seeking value investors.

This turnaround won't happen overnight, but IBM has proven time and again that it has the tools and talent to succeed over the long term.

A crude reality
Following crude oil's tumble to a five-year low, you must have known that an oil driller would work its way into the value stock column. This week I'm turning to small-cap Sanchez Energy (NYSE:SN), which has been absolutely devastated, losing more than 80% of its value since the summer on the heels of weak oil prices.

Sanchez Rig

Source: Sanchez Energy.

What's ailing Sanchez? Sanchez has been fueling its expansion by relying on debt, which, when oil was a $100 per barrel, didn't worry an investor in the world. As oil prices fall, the concern is that Sanchez could struggle to meet its debt obligations if it can't generate enough cash from operations or if it suffers any expansionary setback. These are fair points, and I'd be remiss if I didn't give short-sellers credit for being incredibly right over the past couple of months.

However, I believe Sanchez could be ripe for the picking at just 37% of its book value, even taking into consideration its nearly $1.2 billion in net debt as of last quarter.

To begin with, Sanchez has been buying production-ready acreage for what seems like pennies on the dollar. In May it acquired oil and gas properties in the Eagle Ford shale in Texas from Royal Dutch Shell for $639 million. That might sound like a lot, but the region has 60 million barrels of proven reserves that contributed 24,000 barrels per day during Q1 2014. Even at $60 per barrel, that's $3.6 billion in market value of proven oil reserves for $639 million.

Sanchez Pumpjack

Source: Sanchez Energy.

Secondly, Sanchez has diverse assets and isn't wholly reliant on oil. Based on its third-quarter earnings report, 26% of its production was natural gas, 27% was natural-gas liquids, and 47% was oil. Furthermore, the Eagle Ford's location, which is close to Louisiana's terminals, makes exportation of oil and NGLs cheap and effective since overseas markets often boast higher oil and NGL pricing. In sum, Sanchez can pocket this difference minus its cost to ship by rail to export terminals.

Lastly, the company is just downright inexpensive. As I noted above, it's trading at just 37% of its book value and has a PEG ratio of about one and a forward P/E of just eight. I'm definitely not saying this isn't a risky play, because Sanchez is levered higher than many of its peers, but the risk-versus-reward profile here would seem to favor "reward" at these levels.

Returns you can bank on
Lastly, I'd suggest financial-savvy value stock investors expand their horizons beyond the borders of the United States and look north to Toronto-Dominion Bank (NYSE:TD) as a potentially attractive investment.

Earlier this month TD Bank was throttled after it reported its fourth-quarter earnings results and pointed to higher non-interest expenses in both its Canadian and U.S. operations -- TD Bank is a 40% stakeholder in TD Ameritrade. The concern among investors is that a tight lending environment, coupled with rising expenses, has the potential to squash near-term growth for TD Bank. Further evidence of this happening could be the rise in its efficiency ratio to 56.2 from 55.4 in the year-ago period. A higher number is actually less favorable and signifies that margins are tightening.

However, TD Bank has a number of factors working in its favor that value investors should love.

G
Source: Toronto-Dominion Bank.

For one, it has diverse operations in Canada and the U.S., allowing the company to benefit from arguably two of the most stable markets in the world. Banking regulations may have been beefed up in these two countries, but TD Bank's balance sheet yields few if any credit quality concerns.

Secondly, TD Bank's 3.6% dividend yield handily crushes those of many of its south-of-the-border peers. Though its dividend is prone to fluctuations and is entirely dependent on the state of the banking business, maintaining a 3%-plus yield looks possible for TD Bank over the long run.

Finally, the possibility that lending rates will rise in the U.S. as soon as next year has to excite TD Bank's management team. Higher rates should lead to an expansion of its net interest margin and interest income.

Valued at a mere nine times forward earnings, this is a megabank that value seekers should be watching closely.

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.

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