The following is a list of stocks that have recently been upgraded by analysts. In addition, all of these stocks are deeply undervalued, when comparing the current price to the average analyst target price.

To compile the list, we started with a universe of stocks that have been upgraded since August. We then collected price and target price data on all these stocks, and only focused on companies that are trading at the deepest discounts relative to the average analyst target price (used as a proxy for fair value).

We will be the first to admit that this is a very naive way to find undervalued stocks. But the goal here is to give you a starting point for your own analysis. Wall Street analysts seem to think these stocks are undervalued, what do you think?

Analyst rating changes sourced from RTT News, target price data sourced from Finviz. Note that the data was collected on Friday afternoon, so the price values may not reflect closing values.

*click for expanded image*

The list has been sorted by discount to average analyst target price.

* 1. TFS Financial Corp (NASDAQ:TFSL):* Regional Bank. Market cap of $2.62B. Current price at $8.72 vs. analyst target price of $13.00 (which implies a discount of -32.92%). FBR Capital Markets upgraded the stock from Market Perform to Outperform on 8/6. Short float at 3.88%, which implies a short ratio of 3.61 days. The stock has lost -25.53% over the last year.

* 2. Oshkosh Corporation (NYSE:OSK): *Trucks & Vehicles Industry. Market cap of $2.68B. Current price at $29.65 vs. analyst target price of $43.43 (which implies a discount of -31.73%). KeyBanc Capital Markets upgraded the stock from Hold to Buy on 8/3. Short float at 4.24%, which implies a short ratio of 2.86 days. The stock has lost -2.7% over the last year.

* 3. PHH Corporation (NYSE:PHH): *Credit Services Industry. Market cap of $1.05B. Current price at $19.26 vs. analyst target price of $28.00 (which implies a discount of -31.21%). FBR Capital Markets upgraded the stock from Market Perform to Outperform on 8/3. Short float at 18.14%, which implies a short ratio of 11.68 days. The stock has gained 16.68% over the last year.

* 4. Ryland Group Inc. (NYSE:RYL): *Residential Construction Industry. Market cap of $666.94M. Current price at $15.10 vs. analyst target price of $20.55 (which implies a discount of -26.52%). Deutsche Bank upgraded the stock from Hold to Buy on 8/9. Short float at 14.47%, which implies a short ratio of 6.6 days. The stock has lost -18.45% over the last year.

* 5. NN Inc. (NASDAQ:NNBR):* Machine Tools & Accessories Industry. Market cap of $137.78M. Current price at $8.29 vs. analyst target price of $11.00 (which implies a discount of -24.64%). KeyBanc Capital Markets upgraded the stock from Hold to Buy on 8/12. Short float at 0.25%, which implies a short ratio of 0.24 days. The stock has gained 89.55% over the last year.

* 6. SeaBright Holdings, Inc. (NYSE:SBX):* Property & Casualty Insurance Industry. Market cap of $184.09M. Current price at $8.33 vs. analyst target price of $11.00 (which implies a discount of -24.27%). FBR Capital Markets upgraded the stock from Market Perform to Outperform on 8/2. Short float at 3.83%, which implies a short ratio of 6.48 days. The stock has lost -25.16% over the last year.

* 7. First Horizon National Corp. (NYSE:FHN):* Regional Bank. Market cap of $2.32B. Current price at $10.06 vs. analyst target price of $12.85 (which implies a discount of -21.71%). Deutsche Bank upgraded the stock from Hold to Buy on 10/6. Short float at 11.49%, which implies a short ratio of 7.01 days. The stock has lost -16.9% over the last year.

* 8. Isle of Capri Casinos Inc. (NASDAQ:ISLE):* Resorts & Casinos Industry. Market cap of $262.M. Current price at $8.03 vs. analyst target price of $9.93 (which implies a discount of -19.13%). KeyBanc Capital Markets upgraded the stock from Hold to Buy on 8/24. Short float at 9.63%, which implies a short ratio of 7.16 days. The stock has gained 1.91% over the last year.

* 9. Chico's FAS Inc. (NYSE:CHS):* Apparel Stores Industry. Market cap of $1.79B. Current price at $9.72 vs. analyst target price of $12.00 (which implies a discount of -19.00%). KeyBanc Capital Markets upgraded the stock from Hold to Buy on 10/18. Short float at 9.83%, which implies a short ratio of 3.78 days. The stock has lost -17.03% over the last year.

* 10. United Stationers Inc. (USTR): *Wholesale Industry. Market cap of $1.31B. Current price at $56.34 vs. analyst target price of $69.50 (which implies a discount of -18.94%). FBR Capital Markets upgraded the stock from Market Perform to Outperform on 8/23. Short float at 6.2%, which implies a short ratio of 8.58 days. The stock has gained 24.69% over the last year.

**Disclosure: **No positions