Do you like to search for stocks that could be oversold? If so, here are some ideas on how to start your search.

We began by screening for technically oversold stocks, with Relative Strength Index (14) below 40. We then screened for those that also appear undervalued relative to their Graham Numbers, a measure of maximum fair value created by the "godfather of value investing," Benjamin Graham.

The number is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

*Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.*

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

**1. Apollo Group Inc. (NASDAQ:APOL):** Provides educational programs and services at the undergraduate, master's, and doctoral levels. Market cap at $2.16B, most recent closing price at $19.21. Diluted TTM earnings per share at 3.47, and a MRQ book value per share value at 9.09, implies a Graham Number fair value = sqrt(22.5*3.47*9.09) = $26.64. Based on the stock's price at $19.21, this implies a potential upside of 38.68% from current levels. Relative Strength Index(14) at 39

**2. Peabody Energy Corp. (NYSE:BTU):** Engages in the exploration, mining, and production of coal. Market cap at $6.76B, most recent closing price at $25.17. Diluted TTM earnings per share at 2.37, and a MRQ book value per share value at 22.16, implies a Graham Number fair value = sqrt(22.5*2.37*22.16) = $34.38. Based on the stock's price at $25.17, this implies a potential upside of 36.57% from current levels. Relative Strength Index (14) at 38.

**3. Dole Food Company Inc. (NYSE:DOLE):** Engages in sourcing, growing, processing, marketing, and distributing fresh fruits and vegetables, and food products to wholesale, retail, and institutional customers worldwide. Market cap at $904.19M, most recent closing price at $10.18. Diluted TTM earnings per share at 0.79, and a MRQ book value per share value at 10.27, implies a Graham Number fair value = sqrt(22.5*0.79*10.27) = $13.51. Based on the stock's price at $10.18, this implies a potential upside of 32.72% from current levels. Relative Strength Index (14) at 33.79.

**4. Flagstar Bancorp Inc. (NYSE:FBC):** Operates as the holding company for Flagstar Bank, FSB that offers consumer and commercial financial products and services to individuals, and small and middle market businesses in Michigan, Indiana, and Georgia. Market cap at $996.57M, most recent closing price at $17.85. Diluted TTM earnings per share at 1.21, and a MRQ book value per share value at 17.76, implies a Graham Number fair value = sqrt(22.5*1.21*17.76) = $21.99. Based on the stock's price at $17.85, this implies a potential upside of 23.19% from current levels. Relative Strength Index (14) at 35.30

**5. Fred's, Inc. (NASDAQ:FRED):** Sells general merchandise through retail discount stores and pharmacies in the southeastern United States. Market cap at $456.42M, most recent closing price at $12.44. Diluted TTM earnings per share at 0.89, and a MRQ book value per share value at 11.81, implies a Graham Number fair value = sqrt(22.5*0.89*11.81) = $15.38. Based on the stock's price at $12.44, this implies a potential upside of 23.62% from current levels. Relative Strength Index (14) at 35.50

**6. Kohl's Corp. (NYSE:KSS):** Operates department stores in the United States. Market cap at $9.67B, most recent closing price at $42.02. Diluted TTM earnings per share at 4.38, and a MRQ book value per share value at 26.43, implies a Graham Number fair value = sqrt(22.5*4.38*26.43) = $51.04. Based on the stock's price at $42.02, this implies a potential upside of 21.46% from current levels. Relative Strength Index (14) at 32.36

**7. Pepco Holdings, Inc. (NYSE:POM):** Engages in the transmission, distribution, and supply of electricity. Market cap at $4.38B, most recent closing price at $19.08. Diluted TTM earnings per share at 1.15, and a MRQ book value per share value at 19.41, implies a Graham Number fair value = sqrt(22.5*1.15*19.41) = $22.41. Based on the stock's price at $19.08, this implies a potential upside of 17.46% from current levels. Relative Strength Index (14) at 38.18

*EPS and BVPS data sourced from Yahoo! Finance, all other data sourced from Finviz.*

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

**Business relationship disclosure:** Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.