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Markets typically overreact to good and bad tidings, resulting in arbitrary stock price movements that do not always match up with a company's fundamentals.

Just as there are a number of companies that are breezing past their fair value, there are potentially underpriced ones that are trading way below their intrinsic value.

The old-school investors often wary and would rather have nothing to do with stocks wobbling at 52-week lows.

However, this contrarian strategy might actually help investors lower downside risk while achieving market outperformance. The aim is to hunt for stocks that have sufficient long-term growth prospects to transcend near-term pressure.

Are These Stocks Still Worth Betting On?

Investors usually avoid beaten-down stocks in order to follow the trend. In fact, they don’t reason that the stocks might have lost more value due to temporary company-specific or macroeconomic issues, which might even change in the near future.

Whether a stock is cheap or expensive should be ascertained by the company’s ability to deliver superior performance in the long run. Thus, rather than assessing a stock based on price patterns, one should evaluate it as a business.

Thus, low valuations do not always mean that the stock has lost all potential. Sometimes, it is an opportunity for investors to make positions in stocks which are trading at a bargain and have immense potential.

4 Fallen Angels to Grab Now

We hereby zero in on five stocks based on the following credentials: a Zacks Rank #1 (Strong Buy) or 2 (Buy), current price as a percentage of the 52-week high-low range under 5 (a value of 0 indicates that the stock is trading at its 52-week low), and a Growth Score of A or B on our Zacks Style Score.

Please note that our Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Back-tested results show that stocks with Growth Scores of A or B when combined with a Zacks Rank #1 or 2 offer the best investment opportunities in the growth investing space. You can see the complete list of today’s Zacks #1 Rank stocks here.

Furthermore, the following picks have been witnessing impressive earnings estimate revision activity, of late, which implies that analysts are increasingly bullish on these stocks.

Turtle Beach Corporation (HEAR - Free Report)

Based in New York, Turtle Beach is an audio technology company. The stock is currently meandering around its one-year low of 56 cents.

The company is focused on developing its eSports presence and laying the groundwork for future growth opportunities in PC headsets, China and new categories like Virtual Reality. Moreover, its long-term objective is to leverage these additional growth opportunities to drive double-digit revenue growth as they continue to expect mid-single digits growth in the console gaming headset market, over the coming years.

In fact, given the company’s solid lineup of new games and product launches as well as emphasis on sound cost-saving measures, Turtle Beach also raised its 2017 outlook at its last quarterly conference call.

Meanwhile, analysts have revised their current-year earnings estimates upward by 22.2% over the past month. The Zacks Consensus Estimate for the current year projects earnings growth of 80.3% from the prior year.

Currently, Turtle Beach holds a Zacks Rank #2 and a solid Growth Score of A. Also, the company has surpassed estimates in each of the trailing four quarters, recording an average beat of 33.06%.

All these factors make us reasonably confident of outperformance in the near term.

TearLab Corporation (TEAR - Free Report)

California-based TearLab operates an in-vitro diagnostic company in the United States.

We remain positive on the company’s launch of TearLab Discovery platform. The launch is expected to create an inflection point for the company’s business through both increased utilization within its current customer base as well as expansion of its footprint into new accounts that have not yet adopted point-of-care testing.

Though the stock is currently looming slightly above its 52-week low of $1.20, its Zacks Rank #2 and a firm Growth Score of A further adds optimism in the stock.

Adding to the positives, TearLab has been enjoying solid earnings estimate revisions. Over the past month, its current-year estimates have narrowed from a loss of $2.82 to a loss of $2.68 per share. Also, the company is expected to grow its 2017 earnings by 37.5% year over year.

Notably, the company has a mostly positive track record of earnings surprises in the past four quarters, with an average beat of 5.63%.

Celsion Corporation (CLSN - Free Report)

Based in Lawrenceville, NJ, Celsion is an oncology company committed to developing a portfolio of innovative cancer treatments including directed chemotherapies, immunotherapies and RNA- or DNA-based therapies.

Currently, the company is trading near its 52-week low of $1.24.

Nevertheless, we are positive on the company’s lead product programs including ThermoDox in liver cancer and GEN-1 in ovarian cancer.

Celsion also holds a favorable Zacks Rank #2 and an equally impressive Growth Score of B. Moreover, the stock has been witnessing positive estimate revisions over the past month as the current-year estimate of loss has narrowed 12.5% over the same time frame.

Further, the company’s 2017 EPS is expected to grow a whopping 77.7% year over year.

Energy Focus, Inc. (EFOI - Free Report)

Energy Focus is a leading provider and innovator of energy efficient LED lighting products. As a longstanding partner with the U.S. Government, the company provides energy efficient LED lighting products to the U.S. Navy and the Military Sealift Command fleets, among other commercial customers.

Currently, the company is trading near its 52-week low of $1.51.

The company’s nationwide network of sales agents and channel partners, expanding geographical coverage and a solid product pipeline all come together to provide a long-term revenue growth engine. Meanwhile, Energy Focus continues to focus on maximizing operating cost savings, which should translate to better margins.

Furthermore, carrying a Zacks Rank #2 and a Growth Score of A, this firm has seen positive estimate revisions over the past month. Consequently, the Zacks Consensus Estimate for 2017 narrowed from a loss of $1.14 per share to a loss of $1.02 per share. Notably, the company’s 2017 EPS is expected to rise 2.9% year over year.

To Conclude

Indeed, the aforementioned stocks reeling around their 52-week lows can actually turn out to be an opportunity for investors, taking portfolio returns to new highs – if only, they remain patient and trust the study of fundamentals.

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