3 Stocks Near 52-Week Lows Worth Buying

Just as we examine companies each week that may be rising past their fair value, we can also find companies potentially trading at a bargain price. While many investors would rather have nothing to do with companies tipping the scales at 52-week lows, I think it makes a lot of sense to determine whether the market has overreacted to the downside, just as we often do to the upside.

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

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This weekly melting pot of ideas is usually thick on value with less emphasis on double-digit growth. This first pick, however, will be a complete deviation from that mode of thinking.

Since reporting its first quarterly profit in its young history, Zipcar (NAS: ZIP) has had its stock fall regularly. Why, you might wonder? Probably because of global economic concerns and the fear that Americans will spend less on non-necessity items like Zipcar's services. You can go ahead and continue to believe this, but I'm on board the Zipcar story.

This won't be Zipcar's only quarterly profit. In fact, I don't think the company is going to look back. The service, renting cars at an hourly rate, makes an insane amount of sense for those of us who live in heavily populated areas and don't have either the budget to rent out a parking space or the patience to find a parking spot. It's no wonder Zipcar's revenue spiked by 24% while membership grew 25%. The most important metric, usage revenue per vehicle per day also rose 8%. As far as I'm concerned, this growth is only going to accelerate in the coming years.

Congressional stamp of disapproval
If you're a company in the defense sector, you've probably bitten your nails down to stubs as Congress continues to sit on its hands in figuring out where to cut the federal budget. With hefty cuts likely in the defense sector, companies that rely on government contracts like GeoEye (NAS: GEOY) have been hammered. There's no way to put it mildly: GeoEye's last quarter was a stinker. But, that stinker of a quarter may have provided investors with a cushy buying opportunity.

Although GeoEye gets some revenue from tech heavyweights Google (NAS: GOOG) and Oracle (NAS: ORCL) , the company is still heavily reliant on government contracts. According to its latest report, things look to be stabilizing as we head into the fourth quarter. If that proves true, then, at just 87% of book value and the lowest P/E ratios in years, this could be a deal too good to pass up.

Now it's a party
Who says three's a crowd? I've made it pretty apparent that I'm intrigued by the value I'm seeing in the communications equipment sector, having made my case for Cisco Systems (NAS: CSCO) and Harmonic (NAS: HLIT) already. This week, I'm going to add a third company to the list: Arris Group (NAS: ARRS) .

With Arris Group, I'm going back to the basics of what makes this series so successful -- cash-rich companies with broad-based applications that have hit a rough patch in their growth. Arris's balance sheet features a healthy $368 million in net cash (more than $3 per share) and it's trading at just 1.2 times book value. When I see cash-rich companies like Arris down where they're at now, my mind starts thinking "potential buyout candidate. " As long as Arris can remain healthfully profitable, it's just a matter of time before it begins to reward shareholders by moving higher.

Foolish roundup
Just so I don't seem as predictable, I threw in some high-growth prospects this week along with the usually smattering of deep-discount value plays. All three represent intriguing plays for the future and I'm willing to back that up by betting my CAPS points on them.

Would you make the same call? Share your thoughts on these stocks in the comments section below and consider adding Zipcar, GeoEye, and Arris Group to your free and personalized watchlist to keep up on the latest news with each company.

At the time thisarticle was published Fool contributorSean Williamshas no material interest in any companies mentioned in this article. He thinks Zipcar should buy a fleet of Ford Shelby GT 500s because they'd have made a customer for life. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool owns shares of Zipcar, Google, Cisco Systems, and Oracle, and has created a bull call spread position on Cisco Systems.Motley Fool newsletter serviceshave recommended buying shares of Zipcar, Google, Cisco Systems, and GeoEye. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policythat's always on the lookout for a good deal.

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