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The market correction has brought down the price of many stocks, and some companies are now valued at levels that are poised to either rebound, or perhaps even be a candidate for a takeover. Since interest rates are at record low levels, and with many corporations holding many millions and even billions in cash on the balance sheet, this has created an ideal environment for merger and acquisition deals. Low interest rates allows corporations to finance buyouts, and it also means that cash-rich companies are earning very little on that money. This is why much larger returns can often be generated for shareholders if the company uses that cash to buy other companies. One undervalued company that could be a potential takeover target is Huntsman Corporation (HUN). This specialty chemical company has been the subject of deal talk recently, and whether or not a buyout occurs, the shares could be poised to rebound from below-market valuations. Here are some reasons to consider Huntsman shares now:

1. Huntsman shares are way too cheap, and now trade at about 6 times earnings, while the rest of the market trades at an average price to earnings ratio of around 13. It also trades below the valuation of other companies in the industry. For example, Dow Chemical (DOW) trades for about 13 times earnings which is around twice the ratio for Huntsman. Huntsman shares also trade below Eastman Chemical's (EMN) price to earnings ratio, which is around 10.

2. The sector Huntsman operates in is seeing deal activity. Eastman Chemical Company recently closed a $4.8 billion buyout for Solutia, Inc. This deal could be another sign that the sector is ripe for consolidation and that more deals might be coming.

3. Bank of America (BAC) was recently reported to be in discussions with a number of private equity firms in an effort to determine the level of interest for a deal for Huntsman. CEO, Jon Huntsman Jr. has said the company is open to all options that could create shareholder value. This could be another preliminary sign that the company could be headed for a buyout deal from private equity or another source.

As the saying goes, "where there's smoke, there's fire" and based on the fact that the shares appear highly undervalued by the market, and due to signs of deal interest by both the CEO of Huntsman and outside parties, it would not be surprising to see the shares rise, whether a deal happens or not. However, if a deal occurs the gains could be very rewarding for investors who get in now.

Key Data Points For Huntsman From Yahoo Finance:
Current Share Price: $12.64
52-Week Range: $8.13 to $20.26
Dividend: 40 cents per share which yields 3%
2012 Earnings Estimate: $2.14 per share
2013 Earnings Estimate: $2.11 per share
P/E Ratio: about 6 times earnings

Key Data Points For The Dow Chemical Company From Yahoo Finance:
Current Share Price: $31.19
52-Week Range: $20.61 to $36.90
Dividend: $1.28 which yields 4.1%
2012 Earnings Estimate: $2.47 per share
2013 Earnings Estimate: $3.19 per share
P/E Ratio: about 13 times earnings

Key Data Points For Eastman Chemical From Yahoo Finance:
Current Share Price: $49.38
52-Week Range: $32.45 to $55.53
Dividend: $1.04 per share which yields 2.1%
2012 Earnings Estimate: $4.98 per share
2013 Earnings Estimate: $5.78 per share
P/E Ratio: about 10 times earnings

Data is sourced from Yahoo Finance. No guarantees or representations are made. Please consult a financial advisor before making investments.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.