Although the S&P 500 is nowhere near the lows reached in the dark days of 2009, many stocks have fallen to price levels reached at the trough of the previous bear market. While this makes them cheap, it doesn't automatically mean an investor should buy them, as value traps abound during all markets. However, it does give investors plenty of stock candidates to research rather than watch markets fall.
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The S&P 500 reached a high of 1370 in May 2011, and has tumbled approximately 17% to 1130, as many investors have bailed out rather than risk being long during a second recession. While this decline has hurt many equity investors, the S&P 500 would have to drop about another 460 points to reach the bear market low of 666.79 reached in March 2009. (For related reading, see What's The Difference Between The Dow Jones Industrial Average And The S&P 500?)

Round Trip
There are a number of stocks that have made a round trip and are at or below the same price levels hit in March 2009. The energy sector has been hit particularly hard as the market fears a global economic slowdown and the effect on demand for oil and natural gas.

Ultra Petroleum (NYSE:UPL) bottomed out in March 2009 at $30.02, and is now trading close to that level once again.

Ultra Petroleum is active in the Pinedale Field in Wyoming and the Marcellus Shale, and has most of its reserves and production composed of natural gas. The company is attempting to diversify and recently disclosed a position in the Niobrara oil play in Colorado.

Ultra Petroleum reported 4.4 Tcfe of proved reserves at the end of 2010, using SEC mandated prices of $4.05 per Mcf for natural gas. The company calculates the present value of the pre-tax estimated future net cash flows from these reserves at $5 billion using the SEC price and $8.6 billion at $6 per Mcf.

Penn Virginia (NYSE:PVA) is trading below its bear market low of $7.00 per share, and has fallen to $6.18. Penn Virginia has several characteristics that make it unattractive to some investors. The company is still primarily a natural gas company, with 78% of its production in the first half of 2011 composed of this commodity.

Penn Virginia is attempting to change this and it has allocated 86% of the company's 2011 capital drilling budget in to plays that produce oil and liquids. The company expects the oil and natural gas liquids percentage to reach 30 to 31% by the end of 2011. (For related reading, see A Guide To Investing In Oil Markets.)

Penn Virginia also reported some lower than expected well results in the Granite Wash, which is one of the liquid plays being targeted. The company also ended development at two Granite Wash prospects due to operational issues.

Other operators have also found the Granite Wash to be difficult to develop. In July 2011, QEP Resources (NYSE:QEP) reported several unprofitable wells on its acreage in Texas. The company plans to operate only one rig here for the rest of 2011 as it evaluates the play.

GMX Resources (Nasdaq:GMXR) has been abused the most by the market and is trading at $2.10 per share, far below its bear market level of $4.89. In August 2011, the company reduced production guidance after it suspended the development of its acreage in the Haynesville Shale. GMX Resources attributed the suspension to low natural gas prices and high service costs.

GMX Resources has also been plagued with speculation that the company will issue equity to help fund its 2011 capital program, which is not completely covered by its cash flow. (For more on cash flow, see The Essentials Of Corporate Cash Flow.)

The Bottom Line
The market has punished many stocks more severely than the overall indexes and investors should determine if any of these names are compelling values at current prices once the panic subsides. It's a better strategy than joining the herd.

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