One of the things that is both frustrating and appealing about individual stocks is that there are times when their individual merits are totally ignored. Sometimes a stock may be wildly valued, and other times their great value is totally ignored.
Stocks are constantly shifting from one valuation extreme to the other, and, most of the time, they are moving in tandem. While there are always rotations, they are seldom as extreme as what we have seen recently.
One of the main reasons that traders focus on price action rather than valuations is that there is no way to know how disconnected a stock may be from its 'fair value'. Fair value itself is a very vague concept and depends on quite a few subjective considerations.
There are many high-beta growth stocks and speculative small-caps that are being pounded right now without any regard to their longer-term prospects. It is very easy to buy them because they look like good values, but the irrationality of the market can not be underestimated. Good valuations are no guarantee that the market is going to react. "Value traps" can tie up capital for very long periods of time. Even if you are right about a stock, you also need the market to agree.
I bring up this issue because I see many good valuations developing in some areas of the market that have been hit hard, but it typically is a mistake to rush in and buy big positions right away.
The better approach is to take smaller positions initially and only add to them when there is positive action that indicates that a support level has been hit. That does not relieve us of the responsibility of setting stops and managing the trade, but it reduces the risk.
What wipes out more traders than anything else is building too large of positions too quickly when a stock is downtrending. Position size is the most important issue when trying to bottom fish. If you own too much, then it will mess with you mentally and push you to make emotional decisions.
This is a miserable market right now for many stocks, but the good news is that this bear market action will be followed by bull market action. Just don't be in a rush to buy those great values before they start exhibiting some better price action.