It’s official: The stock markets are now in a correction. At least the Nasdaq is, having fallen more than 10% from its 52-week high (it’s more than -10% right now). The challenge with market corrections is that they can turn into bear markets (a bear market is defined as a 20% drop from the peak).

Indeed there are ample reasons for continued caution, as I noted a month ago.

Yet even as the market is getting weaker, clear values are starting to emerge. And for many, the time is at hand to start building new positions in stocks that appear to have been unfairly tarnished in this sell-off. Indeed, a surprising number of companies that are still being pushed lower in this tough market have reported estimate-beating third-quarter results and solid forward guidance. Here are four examples…

1. Leapfrog (NYSE: LF)
Q3 EPS outperformance: 43%
This maker of tablet computers that focus on child-oriented “edutainment” is seeing clear momentum heading into the holiday season. Management recently predicted that 2012 sales would rise about 20% to roughly $550 million. Analysts parlayed that guidance into a 20% boost in their 2012 earnings forecast to about 80 cents a share. They boosted 2013 sales and profit forecasts at a more modest clip.

Yet shares have fallen roughly 15% since Leapfrog results were reported last Monday, Nov. 5, perhaps because management also intends to hike marketing spending. Leapfrog may also be suffering from a perception that rivals (such as Toys ‘R Us, which is selling its own product) may eat into sales. But the raised forward guidance suggests that competitive fears are overblown.

The fact that shares have now fallen 30% from the 52-week high and now trade for around 10 times projected 2012 profits has created a fresh entry point for investors.

2. Cubist Pharmaceuticals (Nasdaq: CBST) 
Q3 outperformance EPS: 19%
This company currently sells a pair of drugs that target bacterial infections, and three more promising drugs are in the late stages of its clinical pipeline. Sales grew around 15% in 2010 and 2011, and are on track to rise roughly 20% this year to more than $900 million. Merrill Lynch’s analysts predict sales could approach $1.2 billion by 2014.

Shares of Cubist made a strong upward move — from $38 in late June, to around $50 — and the recent third-quarter results may have simply been a reason for investors to book profits. Shares are off nearly 15% since results were released on Oct. 18 to a recent $41. Merrill Lynch figures shares will move toward their $56 price target as we get closer to another round of Phase III clinical trials slated to get underway in early 2013.

3. Sandisk (Nasdaq: SNDK)
Q3 EPS outperformance: 45%
This maker of data memory products posted stellar third-quarter results, and analysts subsequently boosted their 2012 and 2013 sales forecasts. In fact, this is one of the few semiconductor companies that hasn’t delivered downbeat forward guidance. Still, the negative sentiment toward the sector as a whole has kept this stock from rallying after earnings. Shares have fallen roughly 7% since third-quarter results were announced.

The reason why analysts have boosted forecasts: The NAND market, which is SanDisk’s primary focus, is now characterized by a healthy balance between supply and demand, which should enable pricing to stay firm. The recent pullback has left shares trading at 12 times projected 2013 profits.

4. AthenaHealth (Nasdaq: ATHN)
Q3 EPS outperformance: 15%
In June, I cautioned that this stock looked ripe for a sharp pullback. Indeed shares are now off nearly 40% from their 52-week high.

#-ad_banner-#Why did shares tumble after this maker of digitized health records delivered estimate-beating third-quarter results? Because management noted that some of the business expected to land in the fourth-quarter came early, so they took down this quarter’s sales and profit guidance by a corresponding amount. The company also concedes that its target markets are growing more competitive. Still, analysts’ estimates for all of 2012 have remained largely intact. Analysts still expect sales and profits to grow more than 25% in 2013.

AthenaHealth is shaping up as a prime beneficiary of recently-passed Affordable Health Care Act, as hospitals and physicians will be pushed to put down the pen and paper, and pick up the computer (or tablet as the case may be).

This is a case of high-growth stock falling victim to unrealistic growth projections. Yet with those expectations now sharply reduced, investors are no longer shouldering that burden. Indeed it’s always wise to focus on high-growth businesses only when they have temporarily fallen out of favor.

Risks to Consider: These stocks may be hard-pressed to rebound while the market stays in a funk.

Action to Take –> Earnings season is a fertile time to seek out good companies that are saddled with bad stock prices. A falling market tends to punish stocks of all stripes, so if the market grins lower for here, you need to step up your research efforts to find good companies that are “on sale.”