Four Stocks On Sale Right Now : AA, ACI, GSH, WHR

This past year has been unkind to the vast majority of global equities. As we turn the page to 2012, it is worth looking at some of the names that have been pushed lower by investors. Some of these stocks may be potential value plays while others could be setting up to be value traps. For better or for worse, here are four stocks on sale right now.

Stocking Full of Coal
It has been anything but an easy year for shareholders of Arch Coal (NYSE:ACI). Investors in this name have been handed about a 60% loss since the beginning of 2011. The beating that this stock has sustained could very well be overdone.

The stock now trades at a price-to-book ratio (P/B Ratio) of around 0.9 and a forward P/E ratio of about 5.6. Over the long term, Arch Coal is positioned well to benefit from coal supply constraints in the U.S. as well as the completed integration of previously acquired International Coal Group. Other aspects of this stock that I find attractive right now are its 3% dividend yield and the fact that officers of the company have been buying shares of Arch Coal in recent weeks.

Moving to the aluminum space, Alcoa (NYSE:AA) has had a similarly rocky year as its stock price has fallen approximately 42% year-to-date. The stock now trades at a price-to-book ratio of about 0.6 and a forward P/E of around 9.3. Alcoa's earnings miss in Q3, however, would leave me inclined to remain on the sidelines on this stock, at least until after the company reports its Q4 results on January 9.

Other Candidates
The appliance maker Whirlpool (NYSE:WHR) has not been able to get out of its own way in 2011. Whirlpool shares have been in a state of freefall for much of year and are now about 47% lower than where they began the year. This stock now trades at a price-to-book ratio of around 0.84 and a forward P/E of approximately 7.7.

The company blind-sided investors in October when it cited higher material costs as a reason for slashing its full-year profit outlook to a range of $4.75 to $5.25 per share versus a previous range of $7.25 to $8.25. Although Whirlpool will face some tough sledding in the coming quarters, I like the stock for some of the same reasons that I like Arch Coal. Whirlpool's 4.4% dividend yield and an insider buying spree that resulted in four different insiders combining to purchase more than $600,000 worth of WHR shares after the lowered guidance are motivating factors for giving this stock a second look.

One other stock that can be debated as a potential value play is Guangshen Railway (NYSE:GSH). GSH trades at a price-to-book ratio of about 0.7 and a trailing P/E of around 8.7. This stock could be trading higher if it were not for the cloud of skepticism that has been cast over the accounting practices of a number of Chinese companies that are listed on U.S. stock exchanges. Unfortunately, I think it could be some time before investors are able to feel confident in relying upon the financial statements that have been put forth by these companies. This sentiment will continue to be a drag on the stock prices of companies that are being punished for the actions of their peers.

The Bottom Line
Each of these four stocks presently trade at valuations that make them likely to be picked up by most value screens. The challenge now is for investors to determine whether these stocks have been unjustly punished or if they have been priced correctly and are headed lower. The answer often lies beyond the numbers and in factors that are not easily quantifiable. The message here is for potential investors to take a deeper look into the operating prospects of these four stocks rather than purchasing any of them strictly on valuation grounds.