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Do you like to follow earnings season? Although this earnings season is well underway, there are still many names that haven't yet reported their results. For a closer look at companies reporting next week, we ran a screen.

We screened for those stocks reporting earnings next week.

We screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

We then screened that universe for those that appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham.

It is based on 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.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks will outperform like hedge funds expect? Use this list as a starting point for your own analysis.

1. Peabody Energy Corp. (NYSE:BTU): Engages in the exploration, mining, and production of coal. Market cap at $6.97B, most recent closing price at $25.97. Net institutional purchases in the current quarter at 20.2M shares, which represents about 7.56% of the company's float of 267.05M shares. The 2 top holders of the stock are JP Morgan & Chase, and The Vanguard Group.

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 $25.97, this implies a potential upside of 32.37% from current levels.

The company is expected to report earnings on January, 29th, 2013.

2. Heartland Financial USA Inc. (NASDAQ:HTLF): Provides commercial and retail banking services to businesses and individuals. Market cap at $437.18M, most recent closing price at $26.48. Net institutional purchases in the current quarter at 668.3K shares, which represents about 5.54% of the company's float of 12.06M shares. The 2 top holders of the stock are Dubuque Bank & Trust Co., and Northern Trust.

Diluted TTM earnings per share at 2.55, and a MRQ book value per share value at 18.81, implies a Graham Number fair value = sqrt(22.5*2.55*18.81) = $32.85. Based on the stock's price at $26.48, this implies a potential upside of 24.06% from current levels.

The company is expected to report earnings on January, 28th , 2013.

3. JetBlue Airways Corporation (NASDAQ:JBLU): Provides passenger air transportation services in the United States. Market cap at $1.74B, most recent closing price at $6.12. Net institutional purchases in the current quarter at 14.0M shares, which represents about 5.97% of the company's float of 234.33M shares. The 2 top holders of the stock are Donald, Smith & Co., and Wellington Management.

Diluted TTM earnings per share at 0.47, and a MRQ book value per share value at 6.69, implies a Graham Number fair value = sqrt(22.5*0.47*6.69) = $8.41. Based on the stock's price at $6.12, this implies a potential upside of 37.44% from current levels.

The company is expected to report earnings on January, 29th, 2013.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: Hedge Funds Are Buying These 3 Undervalued Stocks Reporting Earnings Next Week